House of Commons - Shale Gas - Energy and Climate Change Committee

Shale Gas - Energy and Climate Change Committee Contents

2 Background

What is unconventional gas?

5. "Unconventional" gas is still "natural" gas, composed, like North Sea gas and other "natural" gas" mostly of methane. Cuadrilla's CEO, Mark Miller, explained that the term "unconventional" refers "to the type of reservoir [not the technology used] […] the techniques are the same as you would use for a 'conventional' well", adding that the technology "is used in the entire [oil and gas] industry, not just in shale gas".[7] "Unconventional" is an "industry term coined years ago to describe the type of reservoir, it is not the process".[8] Jonathan Craig, Fellow of the Geological Society of London, described "unconventional gas" to us as an "additional […] not a new resource".[9] The Minister of State for Energy, Charles Hendry, told us that shale gas "is [extracted from] a new [type of] strata, but using an existing technology […] it is a new application for an old technology".[10]

6. There are three main types of unconventional gas: shale gas; tight gas; and coal-bed methane. Shale gas deposits are trapped within shale rocks. Usually the shale rock is both the source of the gas and the means of trapping it. Shale gas resources are referred to as "plays" rather than fields and they generally cover large geographical areas. Both shale and tight gas are dispersed over much wider areas than conventional gas, meaning many more wells need to be drilled to extract the same amount of gas as from conventional resources. "Thermogenic" shale gas is formed at depth under the influence of heat—the gas is often "wet", meaning the methane is mixed with other gases. In comparison, "biogenic" shale gas is formed by the action of bacteria at shallow depths, and is usually "dry" (which means that it is mostly methane)—these shallow resources can also overlie conventional oil and gas reservoirs. Professor Richard Selley of Imperial College London told us: "Shale gas has been produced since 1821 [...] the renaissance of shale gas has been [driven by] an increase in energy prices in the States obviously, but also technology".[11] He added that "The […] properties of shale vary from rock formation and from place to place",[12] which could be better understood if further geological research into shale gas was funded.[13]

7. "Tight gas" refers to gas deposits found in low permeability rock formations—this means the pores in the rock are connected poorly. In order to extract the gas the rock must be fractured to allow the gas to flow. The International Energy Agency (IEA) definition of tight gas is based upon a gas reservoir that cannot be developed by vertically drilling because of the lack of natural flow.[14]

8. Coal-bed methane, also known as "coal-seam gas", is natural gas contained in coal-beds. Professor Selley told us that there "is quite a long track record of coal-bed methane extraction abroad and in this country",[15] to which Nigel Smith, of the British Geological Society, added "there is a problem with CBM in the UK and Europe compared to America [...] we do not know why [...] probably the permeability of the coals are much lower in Europe and for the UK".[16]

The "quiet revolution" in Shale Gas

9. While geologists have been aware for many years that natural gas deposits existed in shale formations, it is only in the last 12 years in the US that the rate of shale gas production has increased dramatically. This "quiet revolution"—as BP's ex-CEO Tony Hayward described it—has been facilitated by the combination of "hydraulic fracturing" and horizontal drilling.[17] After drilling down vertically to above the shale formation, the drill is steered until the bore becomes horizontal and straight drilling resumes. Most fossil fuel reservoirs are much wider than they are tall, so horizontal drilling exposes significantly more reservoir to the well bore. Hydraulic fracturing, commonly referred to as "fracing" or "fracking" [both pronounced with a hard "k" sound], is the process of creating fissures, or fractures, in underground formations to allow natural gas to flow. The pressure to create these fractures is generated by the injection of a fluid—known as hydraulic fracturing fluid—down the well and into the shale gas formation. Water and sand comprise around 99% of the hydraulic fracturing fluid, the remainder being a mixture of chemicals. The newly created fractures are "propped" open by the sand, which allows the natural gas to flow into the wellbore and be collected at the surface.

10. The techniques used to harvest these gases have raised concerns about the potential environmental impacts. These concerns are both about the above ground infrastructure required and its visible impact, and also about the invisible and possibly unknown effects of fracking. But the Minister of State for Energy, Charles Hendry MP, told us that "horizontal drilling has been something that we have seen in this country and the North Sea for many years".[18] IGas Energy's CEO Andrew Austin told us that "these techniques [hydraulic fracturing and horizontal drilling] have been used elsewhere for many years, both onshore and offshore, with a strong safety and environmental record in the UK".[19] Professor Selley told us that in recent years the "technique […] has improved in leaps and bounds in terms of the drilling mud systems, the fracturing techniques [...] the drilling techniques [...] the number of wells that you can drill off a single pad, so you are minimising the environmental impact: you can get now up to 16 wells off a single pad".[20]

UK Onshore Drilling

11. Trying to put the issue of onshore drilling in perspective, Professor Selley told us that there "is a line of oil and gas fields around the Weald [...] There are fields there that have been producing [conventional] oil and gas for 100 years [...] there was an oil field at Formby [...] BP have done a brilliant job at Wytch Farm".[21] Wytch Farm in Dorset is the "the largest onshore oil field in Western Europe"; the Geological Society cite it as a demonstration that the industry can "successfully exploit resources […] while meeting the highest environmental and social standards".[22] Wytch Farm oil field was discovered by British Gas in the 1970s, and has been operated by BP since 1984. The Geological Society stated that "BP has set world standards in environmental protection and community engagement, using horizontal drilling at distances of more than 10km, keeping the size of well sites […] to a minimum".[23]

Moratoriums

12. The concern about the impact of more widespread use of hydraulic fracturing has produced political reactions. One of the principal concerns has been about the impact of the chemicals added to the hydraulic fracturing fluid, particularly on underground water aquifers. In May 2010, the Pennsylvania state legislature passed the Marcellus Shale Bill that enforced a three-year moratorium on further leasing of exploration acreage until a comprehensive environmental impact assessment has been carried out.[24] On 3 August 2010 New York State issued a temporary moratorium on new shale gas activity. This moratorium suspended the issuing of "new permits for horizontal drilling which utilizes the practice of hydraulic fracturing in the state" until after the US Environmental Protection Agency (EPA) has reported on its study of shale gas.[25] This EPA study is into the potential impacts of hydraulic fracturing on drinking water, and is due to publish preliminary findings in 2012.[26] It is interesting to note that Cuadrilla (exploring for shale gas near Blackpool) intend to undertake exploratory hydraulic fracturing in combination with vertical drilling, rather than horizontal drilling, so a New York-style moratorium would not apply to their activities.[27]

13. At the US federal level, on 9 and 10 June 2010 two identical bills named the Fracturing Responsibility and Awareness of Chemicals (FRAC ACT) were introduced in both the US House of Representatives (HR2766) and Senate (S1215). These bills were proposed in the previous session of Congress and never became law.[28]

14. In response to our call for evidence, WWF stated that it did not believe that shale gas production should be allowed to take place in the UK. At the very least it considered that "no permits should be granted for shale gas activity [...] until there is a robust scientific consensus demonstrating exactly what the risks are".[29] The Tyndall Centre thought that issues relating to local pollution "leaves little doubt that in the absence of a much improved understanding of the extraction process shale gas should not be exploited within the UK".[30] On 26 January 2011 the Labour Party called for a temporary halt to drilling for shale gas while its safety is checked.[31]

15. On 2 February 2011, French Minister for Ecology Nathalie Kosciusko-Morizet announced that France would be conducting an assessment of shale gas's environmental impact. The French Environment Minister added that no authorisation for work on shale gas would be given before the outcome of this mission.[32]

16. On the other hand, Jonathan Craig—a Fellow of the Geological Society of London—told us "the fracing of wells has been going on traditionally since the 1950s […] the first well that was fraced ever in the world was […] in the 1820s".[33] He added that "having bad cement jobs on your wells" can result in contamination of local water aquifers, "but that is exactly the same in conventional hydrocarbon exploration […] the fracs themselves are not the cause of contamination".[34] Tony Grayling of the Environment Agency told us the Agency would not advise the Government that a moratorium was "necessary on the grounds of environmental risks as we understand them at the moment".[35]

17. Mitigation of the risk to water aquifers from hydraulic fracturing relies on companies undertaking the proper measures to protect the environment from pollution. However, there is no evidence that the hydraulic fracturing process itself poses a direct risk to underground water aquifers. That hypothetical and unproven risk must be balanced against the energy security benefits that shale gas could provide to the UK. We conclude that, on balance, a moratorium in the UK is not justified or necessary at present. But evidence must continue to be collected and assessed. We recommend that the Department of Energy and Climate Change monitor current drilling activity in the Bowland Shale formation extremely closely during its early stages in order both to assess the likely environmental impact of large scale shale gas extraction in the UK and also to promote public confidence in the regulation of the activity.

7 Q 124 Back

8 Q 161 Back

9 Q 185 Back

10 Q 283 Back

11 Q 3 Back

12 Q 70 Back

13 Q 68 Back

14 International Energy Agency, World Energy Outlook 2009 , p 398 Back

15 Q 60 Back

16 Q 61 Back

17 Tony Hayward, The Role of Gas in the Future of Energy, 8 October 2009, www.bp.com Back

18 Q 281 Back