The controversial process of drilling for shale gas – known as fracking – is banned in some parts of Europe, yet the UK government has just given its approval for operations to restart in Britain. Is the shale gas boom back on?

Kelvin Ross, Deputy Editor

For some time shale gas has been hailed as a ‘game-changer’ for the global power market.

Advocates point to the US, where its extraction has transformed the country’s energy mix and dramatically cut its reliance on imported fuels. And yet in Europe it remains a subject treated with caution by most, and shunned by some. Poland is Europe’s most pro-shale country, and with good reason: the country has an estimated 5300 billion m3 of shale gas, which it is seeking to exploit to break its reliance on Russian gas.

Government studies show Spain’s Basque region alone holds about 185 billion m3 of shale gas reserves. If these could be recovered at a rate of just 15 per cent, it would expand Spain’s proven gas reserves 11-fold, from a current total of just 2.5 billion m3 to 28 billion m3.

Meanwhile, drilling for shale gas is banned in Bulgaria, Germany and France. However, in the UK, a recent government decision taken following a report by independent experts could serve as a springboard for the pro-shale lobby.

The UK is believed to have its greatest reserves of shale gas in Lancashire, in northwest England. As such, some companies have been carrying out exploratory work in the region for a couple of years, with the most high-profile being UK-based Cuadrilla Resources.

But Cuadrilla was forced to stop drilling after its work was believed to have caused earth tremors in April and May of 2011. However, in April 2012, the UK government gave the green light for shale gas exploration to recommence.

A report commissioned by the government said the hydraulic fracturing or ‘fracking’ process – where pressurised water and chemicals are pumped underground to open shale rocks and release the trapped gas – could resume with tighter rules on seismic monitoring and drilling surveys.

One of the report’s authors, the British Geological Society’s Brian Baptie, said: “The risk of seismic activity associated with hydraulic fracking operations is small, and the probability of damage is extremely small. We suggest fracking can continue under our recommendations.”

Following last year’s tremors, Cuadrilla carried out its own series of studies into its working practices and submitted a report, which was in turn examined by three independent experts appointed by the UK’s Department of Energy and Climate Change (DECC): Dr Baptie, Professor Peter Styles of Keele University and Dr Christopher Green, director of Gfrac Technologies.

The studies examined the possible relationship between hydraulic fracture operations at Cuadrilla’s Preese Hall well, near Blackpool, and the earthquakes which occurred, the largest of which had a magnitude of 2.3 ML (local magnitude).

The reports from these studies conclude the earthquake activity was caused by direct fluid injection into an adjacent fault zone during the treatments, but the probability of further earthquake activity was low.

The reports analyse the earthquake activity and use available geological and geophysical data, including background geology, well logs and core samples, along with fracture treatment data, to develop a conceptual geomechanical model.

A numerical model consisting of a single fault plane in a rock matrix was used to simulate the induced seismicity, compare with observations, and estimate maximum magnitudes for induced earthquakes. A critical magnitude at which damaging ground motions might occur was estimated using the German DIN4150 standard, and a simple relationship suggested for ground motions as a function of magnitude and distance.

Finally, a protocol for controlling operational activity is proposed. This builds on extensive Enhanced Geothermal System experience and uses a traffic light system, based on real-time monitoring of seismic activity.

The panel of experts agreed with the conclusion that the observed seismicity was induced by the hydraulic fracture treatments at Preese Hall. However, they were not convinced by the projected low probability of other earthquakes during future treatments, and believed it was not possible to state categorically that no further earthquakes will be experienced during a similar treatment in a nearby well.

They said that the Cuadrilla analyses failed to identify a causative fault. Detailed knowledge of faulting in the basin is poor. Therefore, it is entirely possible that there are critically stressed faults elsewhere in the basin.

They suggested that a 3D seismic reflection survey could help better characterise faulting within the basin.

The experts also considered that the use of the numerical simulations to estimate maximum likely magnitude of any further earthquake should be treated with some caution, mainly because “the model is necessarily simplistic due to lack of data to constrain parameters”.

The experts made the following recommendations to DECC to mitigate the risk of future earthquakes in the Bowland Basin:

1. Hydraulic fracturing procedure should invariably include a smaller pre-injection and monitoring stage before the main injection.

Initially, smaller volumes should be injected, with immediate flowback, and the results monitored for a reasonable length of time. Meanwhile, the fracture diagnostics should be analysed to identify any unusual behaviour post-treatment, prior to pumping the job proper.

2. Hydraulic fracture growth and direction should be monitored during future treatments.

This should be done with industry-standard micro-seismic monitoring, using either an array of surface or down-hole sensors. Tiltmeters should also be used, if possible. Monitoring of upward fracture growth and containment by complementary diagnostics such as temperature or tracer logs should also be carried out.

3. Future hydraulic fracturing operations in this area should be subject to an effective monitoring system that can provide automatic locations and magnitudes of any seismic events in near real-time.

The system should employ an appropriate number and type of sensors to ensure reliable detection, location and magnitude estimation of seismic events of a magnitude 1 ML and above. The number of sensors should also provide an adequate level of redundancy.

4. Operations should be halted and remedial action instituted, if events of magnitude 0.5 ML or above are detected.

This would be a prudent threshold value to reduce the likelihood of events perceptible to local residents and to offer a higher margin of safety against any possibility of damage to property. This threshold value can be adjusted over time, if appropriate in the light of developing experience.

“The experts concluded that… there was no reason why Cuadrilla should not be allowed to proceed with their shale gas exploration activities [in the UK]”

shale gas exploration
After a lengthy consultation process, the UK is set to recommence shale gas exploration Source: Chesapeake

The experts concluded that, based on their own induced seismic analysis and that carried out by Cuadrilla, together with the agreement to use more sensitive fracture monitoring equipment and a DECC-agreed induced seismic protocol for future operations, there was no reason why Cuadrilla should not be allowed to proceed with their shale gas exploration activities. They recommended cautious continuation of hydraulic fracture operations at the Preese Hall site.

In respect of future shale gas operations elsewhere in the UK, they recommend that seismic hazards should be assessed prior to proceeding with these operations. This should include appropriate baseline seismic monitoring to establish background seismicity in the area of interest; characterisation of any possible active faults in the region using all available geological and geophysical data; and application of suitable ground motion prediction models to assess the potential impact of any induced earthquakes. The report has been welcomed by British business trade associations.

Rhian Kelly, director for Business Environment Policy at the Confederation of British Industry, said: “The government has signalled that gas should play a big part in moving to a low-carbon economy, so it makes sense to explore new gas sources here, rather than increasingly depend on sources from elsewhere in the world. Provided safety standards are observed, shale gas could unlock significant new infrastructure investments, help meet our carbon reduction goals and create many new jobs around the UK.”

Tim Fox, head of energy at the Institution of Mechanical Engineers, said: “The recommendations that any shale gas operations should be more closely monitored are welcome. UK and European environmental regulations are already some of the most stringent in the world, and these proposed precautions are a good example of how to help mitigate the risk of any damage caused by seismic activity as a result of shale gas activity.”

Hydraulic fracking
Hydraulic fracking is the process used to release the natural gas trapped in the shale rock

And on the same day that DECC released its report, shale gas drilling also won backing from global insurance broker Willis, which released a special report into fracking.

“Shale gas is here to stay,” said Neil Smith, chief operating officer of global energy at Willis. “It’s a very cheap form of extraction.”

The Willis report analysed the fracking procedures and concluded that as long as shale gas companies adhere to industry best practice, the risks can be significantly reduced.

The casing of the well is crucial, the report said. A well drilled simply with surface and production casing could indeed allow drilling fluid and gas to seep into the water supply, it admitted. But best industry practice is to drill a well with intermediate casing 2100 metres (4000 feet) deep into the layer of rock beneath that lie the vast majority of gas deposits.

Smith said the issues around fracking “are of a political nature, and a lot are born out of ignorance of what the operations are”. He expects that with more information and “greater insistence on best practice being adopted” – possibly through legislation – the concerns around fracking will diminish over time.

Willis concludes in its report that “while hydraulic fracking operations will continue to pose a measured risk of pollution and contamination risk – just like the upstream oil and gas industry or any other industrial process in general – the extent of the problem has, in some quarters of the media at least, perhaps been blown somewhat out of proportion”.

It does, however, state that regulators in the US, Europe and other regions “will have their work cut out to keep abreast of developments in best practice in this rapidly expanding industry”.

Of course, the DECC report is most welcome at the headquarters of Cuadrilla. Chief executive Mark Miller says: “Going forward, we are going to set up a designated risk committee based on each site – this is going to consist of people doing the actual role who will drive forward the new risk assessments to make sure there is a consistent approach.

“We are also identifying the risks that are attached to each role as well. This will ultimately feed into a risk profile for the whole business.

“So we have identified where the risks are, what we need to control, where we need to put more practice in place, training and anything else, whatever it might be, to control that risk.”

Cuadrilla now expects to resume work this year, and has said that gas production could start in 2014. “By the first quarter of 2013, we will be far enough along in the exploration programme to say this makes sense to go ahead and apply for a full field development permit,” says Miller. “Production could be under way as early as 2014.”

He adds: “It’s very important that nobody gets it wrong in Europe. We have to do this job right and demonstrate that it’s safe, environmentally sound and commercially viable.”

Meanwhile, the Czech Republic announced last month that it was planning a two-year moratorium on granting licences for shale gas exploration to put required legislation in place. France and Bulgaria have already halted exploration due to environmental concerns related to fracking.

But in the wake of the Czech decision, Poland stressed that it has no plans for a moratorium. “The government is not planning any shale gas moratorium,” said Tomasz Arabski, the head of the prime minister’s office.

“The issues around fracking are of a political nature, and a lot are born out of ignorance of what the operations are. With more information, and greater insistence on best practice being adopted, the concerns around fracking will diminish over time”

Poland has granted more than 100 exploration licences to its state-controlled companies, as well as global majors such as Chevron and Exxon Mobil. It has estimated its shale gas reserves at between 346 billion m3 and 768 billion m3. The country has so far strongly pushed the companies it controls to join forces and explore its shale gas deposits. It expects the first shale gas production at the turn of 2014 and 2015.

Ukraine is poised to award tenders to develop two potentially large shale gas fields to Shell and Chevron.

Competition for the tenders was high – Ukraine is believed to have the fourth largest shale reserves in Europe, behind Poland, France and Norway, with around 1200 billion cubic metres, according to the US Energy Information Administration. Shell and Chevron beat tenders from Italy’s Eni, Exxon Mobil and Russia’s TNK-BP.

If Ukraine can successfully tap into its shale supplies, it will go a considerable way to ending the country’s energy reliance on Russia.

Shale gas is still very much waiting in the wings of the ‘European energy’ stage, but if the expansion targets for growth in both renewables and nuclear fall short, this could change.

In April, the International Energy Agency (IEA) said: “Most clean energy technologies are not being deployed quickly enough, and are not on track to make their required contribution.”

The IEA’s senior gas analyst, Anne-Sophie Corbeau, adds: “Forget about straight-line forecasts for natural gas demand and supply. Shale gas opens the way for patterns to suddenly diverge from the conventional view in the most unexpected way.”

What is fracking?

The technique of hydraulic fracturing is used to increase the rate at which natural gas can be produced from subterranean natural reservoirs. Hydraulic fracturing enables the production of natural gas and oil from rock formations deep below the Earth’s surface. At such depth, there may not be sufficient porosity, permeability or reservoir pressure to allow natural gas and oil to flow from the rock into the wellbore at economic rates. Fractures provide a conductive path connecting a larger area of the reservoir to the well, thereby increasing the area from which natural gas can be recovered from the targeted formation. The process can be summarised as follows:

  • After the well is drilled and casing is fitted, steel pipes are inserted and cemented into place.
  • Additional steel casing is fitted below the water level unlike local private and municipal water wells.
  • A perforating gun is lowered into the well.
  • Controlled electric charges pierce the pipe and cement, blasting into the shale where the gas is trapped.
  • The treating fluid (mainly gelled water) which is injected into the well at high pressure creates and widens the shale fractures, then these created fractures are held open by proppant (usually in the form of sand), which is blended with the treating fluid and introduced to the fractures that are created during the fracturing process.
  • Natural pressures then force the liquids back through the pipe to the surface.
  • As the fluid recedes, the sand grains hold open the fractures and natural gas flows up the well.

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