Memorandum submitted by British Geological
1. Britain should consider more onshore and offshore
gas storage in depleted gas fields and salt caverns, and more
options for compressed air energy storage, but the geology for
these may be specialised and will need specialist survey.
2. Shale gas, of which Britain may have considerable
resources, might be an important guarantee of secure gas supply
into the future.
3. Britain should consider developing independent
strategic intelligence about oil and gas supplies in the Middle
East and Russia, as well as long term monitoring of global uranium
production and trade to support the proposed UK nuclear new build.
Question: How sensitive is the UK's energy security
to investment (or lack of investment) in energy infrastructure,
including transmission, distribution and storage?
1. Underground Gas Storage. Britain's
energy security is closely bound up with how much gas it stores.
Surface storage in the form of tanks exists, but underground gas
storage (UGS) provides significantly greater volumes and meets
differing strategic requirements and delivery rates. At present
our country does not have the UGS volumes of comparable countries,
despite having suitable geology or
both salt cavern and depleted field storage.
2. Introduction. Until recently, abundant
offshore gas reserves have meant that swings in UK demand could
readily be taken up by increasing, or decreasing, output from
North Sea and East Irish Sea gasfields. However, UK offshore fields
in particular are rapidly depleting and the UK became a net importer
of gas during 2004. Consequently, offshore gasfields will no longer
provide this flexibility and the UK is becoming increasingly dependent
on imports from the global gas market. Government predicts that
over 80% of UK gas supply will be imported by 2020. Figures from
National Grid suggest that current usage led to imports levels
of 40% in 2009, indicating that the predicted import levels of
2020 may be reached sooner rather than later. Security of supply
will become a matter of growing national importance.
3. Current UK annual gas consumption is around
103 billion m3, but storage capacity of approximately
4.6 billion m3 is only 4% of annual consumption; much
less than many European countries (Figure 1; Table 1). This storage
volume is equivalent to about 14 day's supply, which is again
much less than many European countries and the USA (Table 2).
A report by Cedigaz in 2009 found that 638 underground gas storage
(UGS) facilities operate worldwide, providing a total working
capacity of 328.9 billion cubic metres (bcm) (10.7% of global
gas consumption). Of these, 446 are located in America (395 in
the United States). Europe ranks second with 129 underground gas
storages, with more than half located in three countries: Germany
(47 sites), France (15 sites), and Italy (10 sites). The Cedigaz
report found 199 new storage facilities or expansions of existing
ones that are either under construction, under development, or
planned. Of these, Europe has the most with 123 projects, representing
more than 75 bcm of additional working capacity, compared to the
current 82 bcm available. Tables 3 & 4 illustrate the relatively
small number of proposed developments that exist in the UK compared
to planned European projects.
COMPARISON OF EUROPEAN GAS STORAGE CAPACITY
AS A PERCENTAGE OF NATIONAL DEMAND
Sources: Gas Infrastructure
Europe, CIA World Fact Book 2009, National Grid and International
NATIONAL DEMAND, STORAGE CAPACITY AND PLANNED
NEW STORAGE CAPACITY OF EUROPEAN COUNTRIES
ANNUAL GAS CONSUMPTION AND GAS STORAGE VOLUMES IN THE
UK AND OTHER COUNTRIES
|Sources: Gas Infrastructure Europe, CIA World Fact Book 2009, National Grid and International Energy Agency
4. The UK has an ageing stock of nuclear and coal-fired power
stations, of which about one third will need replacing by 2015.
If these plants are not replaced by new build, then it seems likely
that much of the new capacity will be provided by conversion of
plants to gas-firing, further increasing demand. In the event
of supply disruption the lack of storage and increased consumption
leaves the UK more vulnerable. Whilst a number of underground
storage facilities are in various stages of planning or construction
(Tables 3 & 4), these will not be available for a number of
years during which time imports will rise.
5. Britain's largest gas storage facility is the depleted
Rough Gasfield lying offshore in the southern North Sea. The construction
of salt caverns in offshore regions has also been proposed, with
one site in the East Irish Sea (the "Gateway" project)
having been granted the first offshore storage license in 2010.
Construction will not begin until late 2011 at the earliest. Other
sites might be available in the Zechstein (Permian) salt structures
of the Southern North Sea.
6. Onshore storage facilities would provide capacity closer
to market demand, but such facilities are strongly opposed by
local residents. If it is decided that more UGS is required onshore
in Britain then it must be recognized that it is only possible
to develop these facilities in certain geological strata or structures,
which occur in only a limited number of locations. Onshore, six
UGS facilities are in operation: two depleted fields and four
salt cavern sites, one of which comprises only one cavern. A number
of gas storage projects have gained planning consent and are currently
under development/construction, but the majority of proposed facilities
are held up by the current planning regime.
7. The following sections outline the areas onshore Britain
most likely to attract interest. The technology involves the injection
of gas from the National Transmission System (NTS) into the pore
spaces of the aquifers, depleting hydrocarbon reservoir rocks
or salt caverns during periods of low demand and its withdrawal
during periods of high demand. For pore storage injection is generally
during the late spring, summer and early autumn months with withdrawal
during the higher demand winter months. Salt caverns can be filled
and emptied more rapidly and so can accept or deliver gas more
readily. Pore storage facilities therefore offer more strategic
and longer-term seasonal storage, helping to balance long term
requirements and complement the medium to shorter term, higher
deliverability function offered by salt cavern storage.
OPERATIONAL UNDERGROUND LNG AND GAS STORAGE FACILITIES
IN MAN MADE CAVERNS
||Owner/operator||Storage capacity (Mcm)
||Number of caverns (Chalk & salt storage)
||Approx. depth of storage (top-bottom if known - m)
|Operational facilities - Chalk caverns
||ConocoPhillips and Calor Gas||0.1 (liquid =60,000 tonnes of LPG)
||2||180-?210||Two mined caverns in Chalk c. 180 m below ground level, operational since 1985.
|Operational facilities - salt caverns
|Cheshire Basin||Holford H-165
||IneosChlor (formerly operated by NG (Transco), now Ineos
||Planning approval granted 1983. Ten-year inspection completed 2006. One of number of abandoned brine cavities with ethylene & natural gas storage since 1984.
|Cheshire Basin||Hole House Farm (Warmingham Brinefield)
||Energy Merchant (EDF Trading)||75
||4||300-400||Planning permission granted 1995. Four caverns, operation commenced in February 2001.
|East Yorkshire||Hornsea/ Atwick
||Scottish & Southern Energy||325
||9||1,730-1,830||Planning permission granted 1973, operating since 1979
|Teesside||Saltholme||Sabic (formerly IneosChlor/Huntsman)
||Up to 0.12-0.2||18 (plus 9 redundant)
||350-390||Development in 1950s, storage started 1965-1982. 18 ex ICI caverns in operation. One "dry cavity storing nitrogen"; 17 "wet" storage cavities containing hydrocarbons ranging from Hydrogen to Crude Oil; nine redundant storage cavities; 75 redundant brine wells/cavities never used for storage; five in service brine wells.
|Teesside||Saltholme||IneosChlor/Northern Gas Networks
||Four ex ICI Natural Gas cavities. Development started 1959-1983, storage started 1959-1983. Now owned by IneosChlor & operated by NGN for Natural Gas.
|Teesside||Wilton||Sabic (formerly IneosChlor/Huntsman)
||Up to 0.04||5||650-680
||Storage started from 1959 to 1983. Eight caverns leached, five operational cavities in total leached for storage purposes: four cavities storing Ethylene, one cavity storing Mixed C4's. Three cavities redundant or never in service for storage.
||2||650-680||Two ex ICI cavities - operational & storing nitrogen (for BOC Nitrogen).
UNDERGROUND GAS STORAGE FACILITIES PLANNED OR UNDER CONSTRUCTION
IN SALT CAVERNS OR OF TYPE AS YET UNKNOWN
||Owner/operator||Storage capacity (Mcm)
||Number of caverns (Chalk & salt storage)
||Approx. depth of storage (top-bottom if known - m)
|Planned facilities - salt caverns
|Cheshire Basin||Byley/Holford (southern end of Holford Brinefield - Drakelow Lane area)
||Scheme initiated by Scottish Power, sold to E.ON UK plc 2005
||160-170 (working volume)||8
||630-730||May 2004 Deputy Prime Minister and Secretary of State reversed Public Inquiry decision. Decision upheld by High Court Dec 2004. Under construction. Salt caverns to be leased from Ineos who own the salt & will construct the caverns that will be approximately 100 m high by 100 m in diameter.
|Cheshire Basin||Hill Top Farm (Warmingham Brinefield)
||Energy Merchant (EDF Trading) - formerly British Salt
||10 existing brine caverns: c. 2994 new caverns: c. 115(11 new caverns: c. 317)
||10 existing brine caverns & between 4 (possibly 11?) newly constructed caverns
||240-300||Planning permission gained for conversion of 10 existing brine caverns and between four and 11 new caverns by British Salt in May 2008 - this figure could include the Parkfield Farm caverns (7). Storage volume expected to be: 0.69 Mcm (22,400 tonnes/29.9 Mcm) for each existing brine cavern and 0.6 Mcm (21,600 tonnes/28.8 Mcm) for each new cavern. Interests sold to Energy Merchant (EDF Trading) July 2009. EDF Energy now plans to develop the project alongside EDF Trading using a revised planning permission designed to take advantage of synergies with the adjacent Hole House Farm gas storage facility.
|Cheshire Basin||Parkfield Farm (Warmingham Brinefield)
||Energy Merchant (EDF Trading) - formerly British Salt
||Planning permission gained for seven new caverns by British Salt in May 2008. Storage volume expected to be 0.6 Mcm (21,600 tonnes/28.8 Mcm) for each new cavern. Interests sold to Energy Merchant (EDF Trading) July 2009. EDFT will not develop new caverns but use the Parkfield site to support operations at the adjacent Hole House (operational) and Hill Top (approved) storage facilities.
|Cheshire Basin||Stublach (Holford Brinefield between Drakelow Lane and Lach Dennis)
||Ineos Enterprises Ltd||540 (storage volume)430 (working volume)
||28||>500||> planning application December 2005, permission received late 2006. Under construction in two phases with initially 8-10 caverns constructed. Expected to be operational for about 40 years.
|Cheshire Basin||King Street (Holford Brinefield)
||King Street Energy (NPL Estates)||c. 263 (storage volume)160 (working volume)
||10||>400||Proposed construction of ten caverns. Planning application turned down Dec 2008, decision appealed by applicant and Public Inquiry held July-August 2009, with the Secretary of State granting permission on 9 December 2009.
|East Yorkshire||Aldbrough South - Phase I
||Scottish & Southern Energy and Statoil
||Planning permission granted 2000, two sites with three and six caverns initially - Scottish & Southern Energy and Statoil combine ownership and development. Under construction, with storage commencing in 1st two caverns in 2009, with capacity in another three caverns expected to become available by the end of 2010 and full commissioning of the Phase 1 operations expected in 2012.
|East Yorkshire||Aldbrough South - Phase II
||Scottish & Southern Energy and Statoil
||Consent sought for extension to phase 1 development. Permission to increase storage capacity granted by East Riding of Yorkshire Council in May 2007. Final size of Aldbrough facility will be 18 caverns
|NW England||Preesall||Canatxx Gas Storage Ltd
||c. 1700 (storage volume)1200 (working volume)
||up to 42||245-510||Significant public objection to proposals. Public Inquiry held (late 05-early 06), with planning permission refused by Secretary of State (DCLG), October 2007. Second planning application submitted Feb 2009 and refused by County Council January 2010.
|East Yorkshire||North of Aldbrough (Whitehill)
||E.ON UK plc||420||10
||c. 1,800||Geological feasibility studies carried out 2006 on land to the north of Aldbrough. Planning application submitted to East Riding of Yorkshire Council, January 11th 2007. Still in planning in late 2009, delaying anticipated completion date of 2013.
|Wessex-Weald Basin, Dorset||Isle of Portland
||Portland Gas Ltd. ||1000
||14||2,100-2,300||Planning permission granted by Dorset County Council 16th May 2008. Struggling to raise investments to commence project, which began with site construction at end July 2009. Drilling is expected to commence towards the end of 2010.
|East Irish Sea (offshore)||"Gateway Project"
||Gateway Gas Storage Limited/Stag Energy
||Planning application submitted October 2007. Barrow Council approve plans for onshore gas compression station June 2008, which was followed by UK Government approval in the same year. Granted first offshore storage permit by UK Government in February 2010. In FEED process 2010-2011.
|Islandmagee, Larne, N Ireland||Larne Lough
||Portland Gas Group/Islandmagee Storage Ltd)
||500 (working volume)||Not available
||1,500||Planning application submitted Mar 2010
|Planned facilities - salt mines||
||Not available||Not available
||> 250 m||Proposals put forward in November 2009 to convert and use former ICI salt mines in the north Cheshire Basin area.
|Offshore Bacton||Southern North Sea
||Stag Energy||1500||Not available
||Not available||Included in National Grid's 2009 review of underground gas storage developments and proposals. No details available.
8. Natural gas storage in depleting oil/gasfields.
Many UK onshore basins are now at a mature stage of exploration.
Nevertheless, they continue to attract interest and large areas
remain licensed for production and continued exploration (Figure
2). With improving technology modest onshore discoveries continue
to be made. However, depleting oil and gasfields also have the
potential to provide significant volumes for underground gas storage.
During gas storage operations, some remaining natural gas will
also be produced and consequently a production licence will be
PROSPECTIVE ONSHORE SEDIMENTARY BASINS AND SIGNIFICANT
OIL AND GASFIELDS. LICENCE AREAS ALSO SHOW AREAS OF COAL MINE
AND COAL BED METHANE PROSPECTIVITY
9. Salt caverns. Former brine caverns created
by solution mining of salt have been used to store hydrocarbon
products for many years. At Billingham (Saltholme) and Wilton
on Teesside storage of gases, which include methane, nitrogen
and hydrogen, commenced in the late 1950s. This included the Northern
Gas Board's use of a solution-mined cavity on Teesside to store
town gas in 1959. There are about 30 caverns currently in use.
Completed solution cavities in Cheshire are also used for ethylene
and natural gas storage.
10. However, these former brine caverns are not ideally shaped
or spaced for natural gas storage and today specially designed
caverns are engineered. Gas storage in salt caverns is covered
by British (and European) Standard (BS EN 1918-3:1998). Salt caverns
are advantageous because salt is impermeable and under most engineering
and relevant geological conditions (increased temperatures and
pressures at proposed storage depths), deforms in a ductile manner
(creeps or "flows") rather than by brittle fracturing
or faulting. Fractures due to faulting in the geological past
are, therefore, likely to have been "annealed" and sealed.
11. In the UK a number of proposed schemes are at varying
stages in the planning and construction process, including (Table
4): an extension to Hole House and at Byley, Stublach and King
Street near Holford in Cheshire; the Isle of Portland in Dorset
and at Islandmagee near Larne in Northern Island Preesall in Lancashire
was rejected by the Secretary of State (DCLG) in late 2007, following
a Public Inquiry that ran from October 2005 to May 2006 and a
further planning application in January 2010 was refused by Lancashire
County Council. The developer is now preparing to seek planning
permission through the Infrastructure Planning
12. Compressed Air Energy Storage (CAES).
Wind power generation is
set to increase in the UK. At lower levels of installed wind capacity,
studies have shown that the intermittency of wind is unlikely
to create a problem. The aggregated output from wind farms distributed
around the country is unlikely to ever fall to zero and the short
term variations of wind generation are small compared to the corresponding
variations in demand. However, as wind generating capacity rises
beyond about 20% the requirement for back-up generation or energy
storage increases. In addition at times of excessive wind generation
the power cannot be accepted onto the grid leading to "constraint
costs" that raise the cost of wind generation; energy storage
can therefore utilise all of the available wind energy. Wider
dispersion of wind farms, possibly including super grid connections
between countries, will help to smooth wind generation, but does
have security of supply issues. Increased wind generation is likely
to need some energy storage, although this may only need to be
a percentage of the installed generating capacity.
13. Compressed air energy storage
(CAES) and pumped hydro energy storage have been demonstrated
as the only technologies that could have the capacity for large
scale energy storage within an electrical power grid. However
pumped hydro can only operate onshore and is restricted by the
number of available hillsides where a scheme could be constructed.
CAES needs to be located above suitable geology for either aquifer
storage or cavern storage. There are competing demands for aquifer
storage, especially offshore, from CO2 sequestration,
conventional gas storage and direct use geothermal. Cavern storage
is ideally created within salt deposits, but onshore there are
competing demands from conventional gas storage.
14. Compressed air energy storage
is being considered in many countries, including the UK. The basic
concept of CAES is more than 30 years old and involves using off
peak electrical energy from renewable sources such as wind, or
excess output of power plants, to compress air, which is then
stored under pressure underground. The compressed air is then
released through a gas turbine to generate electricity during
periods of peak demand.
15. Storage can be in porous rocks
(aquifers or depleted oil/gasfields) or, more commonly, in large
voids such as salt caverns or former mine workings. The first
CAES facility using salt caverns was created in the Huntorf salt
dome near Hamburg in Germany in 1978. A second plant near Mobile
in Alabama, USA was constructed in 1991 and others are being planned
around the world. CAES facilities are being developed in large
(unlined) limestone caverns in Ohio, USA and in an aquifer to
be jointly used for gas storage (Iowa, USA). Similar CAES facilities
could be developed in the UK in impermeable rocks of suitable
quality (eg salt beds or "hard rocks") in conjunction
with, for example, near shore wind farms. CAES feasibility studies
were undertaken in the UK during the 1980s by, the Central Electricity
Generating Board (CEGB). However, no development has yet taken
16. Similar proposals, but using
rock caverns to store water at different levels for closed loop
pump storage, have been suggested for Scotland.
17. If renewable energy is to become
an important element of the energy mix, then options for energy
storage, including CAES, may have to be considered. This might
be facilitated by distributed generation and microgrids, in which
small CAES plants distributed around the UK could play an important
role in the storage of off peak renewable energy.
Question: What would be the implications for energy
security of a second dash-for-gas?
18. Further delays on decisions on new nuclear
power plant build and the requirements for carbon emissions reductions
and clean coal technologies are likely to lead to a second dash-for-gas
for electricity generation. Given the preceding commentary on
the already increasing reliance on imported gas/LNG and a shortfall
in UK UGS volumes, this would have an immediate and potentially
important impact on national security of supply and energy issues.
Immediate UK requirements are thus likely to be for increased
storage volumes of various types, including salt caverns and depleted
fields. However, an increased awareness of alternative, unconventional
gas sources like shale gas and environmentally acceptable methods
of exploitation would be advantageous.
19. Organic-rich shale contains significant amounts
of gas held within fractures and micro-pores and adsorbed onto
organic matter. Shale gas prospectivity is controlled by the amount
and type of organic matter held in the shale, thermal maturity,
burial history, micro-porosity and fracture spacing and orientation.
In the UK licences have already been taken up by forward-thinking
companies and the interest will be high for the next licensing
20. It is too early in exploration of UK shales
to be certain about the contribution which shale gas production
could make. In the US, shale gas extracted from regionally extensive
units such as the Barnett Shale currently accounts for ~6% of
gas production. Comparisons with the US suggest that there will
be some production in the UK and all organic-rich shales in the
UK are likely to be tested for their resource potential.
21. The lowest risk exploration is where source
rocks have accompanying conventional hydrocarbon fields, which
in the UK include the Upper Bowland Shale of the Pennine Basin,
the Kimmeridge Clay of the Weald Basin and possibly the Lias of
the Weald Basin. Deeper Dinantian shales should also be tested
in the Pennine Basin and possibly in the Oil-Shale Group of the
Midland Valley. Higher risk is attached to the Upper Cambrian
source rock on the Midland Microcraton, which although it has
not been severely tectonised, has not sourced conventional fields
that have been preserved. The highest level of risk is attached
to black shales within the Caledonian and Variscan fold belts,
which have high organic carbon but are tectonised (affected by
thrusts, intruded by igneous intrusions and converted to slates)
and also have no overlying fields.
22. British shale gas might be regarded as "stored
gas" if reasonable assessments of the potential can be made.
23. BGS reports on Worldwide Shale Gas and UK
prospectivity are on the DECC Promote website: (https://www.og.decc.gov.uk/upstream/licensing/shalegas.pdf
MAIN POTENTIAL SOURCE ROCKS AT OUTCROP, IN
RELATION TO THE CONVENTIONAL GASFIELDS AND GAS DISCOVERIES
Note: Larger subsurface
extents of the source rocks are excluded from this simplified
map. Lower Palaeozoic, higher risk prospects not all shown and
partly underlie Mesozoic formations.
Question: How exposed is the UK's energy security
of supply to international events?
24. Britain has long term interests in obtaining
oil and particularly LNG from the Middle East. The events of the
"Arab Spring" in the last few months have highlighted
the fragility of the system that delivers oil and gas. 80% of
the world's oil reserves are located in the Middle East, 62.5%
coming from the "Arab 5": Saudi Arabia, UAE, Iraq, Qatar
and Kuwait and most of this is controlled by national oil companies
(NOCs) like Saudi Aramco, Kuwait Oil Company and ADNOC. NOCs may
become even more dominant as oil production dwindles in areas
which are open to all comers, such as the North Sea and the Gulf
of Mexico. Much new oil is likely to be found in the NOCs' territory,
precisely because it is largely out of bounds to multinationals
such as Shell and BP, and so has not yet been thoroughly explored.
Therefore future oil and gas production may be even more concentrated
in the hands of the national firms of Russia and the Gulf, most
of which do not publish details about reserves or prospects. Currently
consultancies such as IHS and McKinsey collect data on basins
and regions in the Middle East and worldwide, but these are primarily
aimed at investors, not governments and policy makers (Eg IHS
"Basin Monitor": http://www.ihs.com/products/oil-gas-information/basins-data/monitors.aspx).
The only long term strategic survey of worldwide petroleum prospects,
including the Middle East, is that of the USGS' World Petroleum
which are essentially long term and strategic hydrocarbons "intelligence"
about the region. It may be worthwhile for Britain to begin collecting
information about Middle East reserves and prospects, so that
it has an independent view of this vital economic area.
25. In addition to oil and gas, many renewable/
low carbon energy technologies (including wind turbines and electric
vehicles) rely on small, but critical amounts of key metals for
their manufacture. Almost all of these metals are sourced from
outside the EU and the supply of some is subject to significant
geopolitical vulnerabilities (such as rare earth metals from China
or cobalt from Democratic Republic of Congo). The current Commons
Science and Technology Committee inquiry into "Strategic
Metals" and the European Commission "Raw Materials Initiative"
are addressing this issue, but it is important to understand that
security of supply applies to key metals as well as oil and gas.
26. The UK is wholly reliant on imported uranium
to fuel its nuclear generating plants. Determining the ultimate
country of origin of uranium imports to the UK from published
statistics is problematic. In 2010, Uranium metal enriched in
U-235 was imported into the UK from Germany, France, the Netherlands
and Russia. Of these countries, only Russia has mines producing
27. Global demand for uranium for electricity
generation is currently much higher than mine production. At present
the shortfall is met by reprocessing, from stockpiles and by conversion
of weapons-grade uranium into fuel. However, global mine output
is increasing, with production in 2009 at the highest level since
1981. The top four global producers are Kazakhstan, Canada, Australia
and Namibia. Uranium occurs in economic quantities in a range
of geological environments across the world. As such, the geological
and geopolitical constraints on supply are not as severe as those
relating to some other metals and fossil fuels. Increasing demand
is prompting the development of new mines in a number of countries
and production from these is likely to reduce the current shortfall
of supply considerably. However, concerns related to the Japanese
nuclear disaster notwithstanding, global demand for the low carbon
energy which nuclear power provides is burgeoning. The success
of the proposed UK nuclear new build will depend on securing supply
of uranium fuel in the face of increased competition from other
consumers around the world. Long-term monitoring of global uranium
production and trade are a vital part of this process. For more
information see the BGS Mineral Profile on uranium at: http://www.bgs.ac.uk/downloads/start.cfm?id=1409