Shale Gas

Memorandum submitted by Professor Richard Selley (SG 05)

  The submission addresses the issues requested by the inquiry in the order in which they were listed in the terms of reference:

1.       What are the prospects for shale gas in the UK, and what are the risks of rapid depletion of shale gas resources?

      1.1 Prospects:

Gas has been produced in the USA from naturally fractured shale since 1821. In the past the artificial fracturing now used in the shale gas renaissance was too expensive. Wells flowed gas from naturally fractured shale for several decades. A single well could produce enough gas to supply a school, hospital or shopping mall indefinitely. Production rates and profit margins were too low for major companies to be interested. For some 175 years shale US gas production was a local ‘cottage industry’ run by small operators.

In the early 1980’s Imperial College used the US paradigm to study the feasibility of UK shale gas production. The research concluded that the UK had considerable potential for shale gas exploitation. The Carboniferous rocks of the West Midlands in particular were identified as highly prospective. This is, of course, the area where IGas and Cuadrilla are now operating.

The Imperial College study also concluded that exploration was not economically viable under the then prevailing tax regime (Corporation Tax + Petroleum Revenue Tax).

These conclusions were conveyed to the Department of Energy at a meeting on 8 January 1985.

1.2 Risks of rapid depletion:

The shale gas renaissance of the last decade results from 4 factors:

1.2.1         Increasing energy prices.

1.2.2         The ability to drill wells horizontally.

1.2.3         The ability to image the shape & volume of shale gas reservoirs seismically, and

1.2.4         Artificial fracturing, which increases the permeability of rocks and hence fluid flow rate. This technique, as old as Moses, has been used in the petroleum industry for decades. There are question marks, however over long term flow rates over years or decades. Until recently artificial fracturing has been too costly to use in shale gas wells. There are plenty of data showing the cumulative shale gas production of wells, fields and basins. There are few data available for the long term production rates of recently drilled and fractured individual US shale gas wells. Most published data, and most simulations carried out by independent researchers (E.g. the United States Geological Survey), only model depletion curves for two or three years.

2. What are the implications of large discoveries of shale gas around the world for UK energy and climate change policy?

The shale gas renaissance began in the USA in the 1980’s with the application of artificial fracturing and horizontal drilling. There are currently over 900 rigs drilling for shale gas across the USA. The Colorado School of Mines has recently raised its assessment of US gas reserves by 35%. US gas prices have declined from a peak of 7$US per MBTU (Million British Thermal Unit) in 2005 to some 4$US per MBTU today, bringing the price down to pre-1980 levels. Many countries around the world (Including Argentina, Canada, China, the Ukraine, Poland, France, Sweden & India) are beginning to develop their shale gas resources. In Europe the ‘land grab’ for prospective shale gas acreage is now over. The geopolitical importance of the UK developing its own shale gas resources is axiomatic.

The combustion of shale gas contributes to global warming, obviously. Shale gas may however be a temporary stop gap, providing energy while the combustion of other fossil fuels declines, until replaced by nuclear or renewable energy sources.

3. What are the risks and hazards associated with drilling for shale gas?

The artificial fracturing of shale gas wells has been blamed for contaminating aquifers with petroleum (A common phenomenon in petroliferous areas), for what Americans call ‘temblors’ - micro-seisms in English, and for flocks of dead black birds falling from the sky. British TV audiences will have been amazed at film showing flammable gas emerging from a bathroom tap, and its attribution to adjacent shale gas extraction. The media has not been so fast to report that the preliminary results of an independent enquiry reveal that this phenomenon had been ongoing before drilling commenced. The committee could usefully enquire as to how many of the thousands of shale gas wells drilled in the USA in recent years have caused environmental damage. It is the squeaky wheel that gets the oil.

4. How does the carbon footprint of shale gas compare with other fossil fuels

Gas in general, and shale gas in particular, produces some 45% less carbon greenhouse gases and fewer particulates than oil or coal fired power stations.

BIBLIOGRAPHY

Selley, R.C. 1987.  British shale gas potential scrutinized . Oil & Gas Jl. June 15. 62-64.

Selley, R.C. 2005. UK shale-gas resources. In: Doré, A.G. & Vining, B. A. (eds.) Petroleum geology of NW Europe & Global perspectives. Proc. 6 th Petroleum Geology Conference. Geological Society. London. 707-714.

January 2011