Shale gas in the United Kingdom

Shale gas in the United Kingdom has attracted increasing attention since 2007, when onshore shale gas production was proposed. A number of wells have been drilled, but as of December 2014, there has been no commercial production of shale gas in the UK. See also Hydraulic Fracturing in the UK

In July 2013 UK Prime Minister David Cameron claimed that, "fracking has real potential to drive energy bills down". However, since then figures from industry and government have stated that fracking in the UK alone will not lower prices as the UK is part of a well connected European market. Such figures included former BP Chief Executive and government advisor Lord Browne, Energy Secretary Ed Davey and economist Lord Stern.[1][2][3]

Favourable tax treatment was being offered to shale gas producers.[4]

Shale gas areas

The Department of Energy and Climate Change (DECC) originally identified large areas of eastern and southern England as having the "best shale gas potential":

The main area identified runs from just south of Middlesbrough in a crescent through East Yorkshire, Lincolnshire, Northamptonshire, Buckinghamshire and the Cotswolds to Somerset and Wiltshire. It then turns along the South Coast and Downs, including most of Dorset, Hampshire, Sussex, Surrey and Kent. Shale gas sites are under investigation in the Sussex commuter belt, near Haywards Heath, the Mendip Hills, south of Bath, in Kent, Lincolnshire, south Wales, Staffordshire and Cheshire, as well as more sites near the existing find in Lancashire.[5]

However the British Geological Survey report released in October 2014 said that there was little potential for shale gas in the Weald Basin. (see 'Weald Basin' below)

Bowland Basin

As of June 2013, the Bowland Basin was the only area in the UK where wells have been drilled specifically for shale gas. Four wells have been drilled by Cuadrilla Resources, and one by IGAS Energy. None of the wells has produced gas.

Cuadrilla started drilling Britain's first shale gas exploration well, the Preece-Hall-1, in August 2010. The well penetrated 800m of organic-rich shale. The company hydraulically fractured the well in early 2011, but suspended the operation when it triggered two small earthquakes, one of which was large enough to be felt by people at the surface. Work on the well stopped in May 2011, and the government declared a moratorium on hydraulic fracturing that was lifted in December 2012, subject to additional controls to limit seismic risk.[6][7][8]

In September 2011, Cuadrilla announced a huge discovery of 200 trillion cubic feet (Tcf) of gas in place under the Fylde Coast in Lancashire.[9][10] Cuadrilla stated that it would be happy if it could recover 10–20% of the gas in place.[5] Lord Browne ignored this latter point in media interviews, claiming that the Lancashire discovery could satisfy the UK's gas consumption "for 56 years",[11] with similar, sensational media reports claiming that the find was "so rich it could meet Britain's needs for decades",[12] or that it had "the potential to do more for Lancashire than the cotton industry."[13] (For comparison, the cotton industry in Lancashire employed, at peak penetration in 1811, 37% of the county, or about 70,000 people; Cuadrilla believes fracking will create 1,700 jobs in Lancashire, current population 1.1m).[14][15][16] The British Geological Survey—responsible for producing inventories of the UK's mineral resources, and far more cautious in its estimates—felt prompted, however, to re-evaluate its projections in light of the find,[12] which Cuadrilla believes could provide 5,600 jobs in the UK at the peak of production.[11] Industry estimates suggest shale gas in Lancashire alone could deliver £6bn of gas a year for the next three decades.[17]

In July 2013, Cuadrilla applied for a permit to hydraulically fracture its previously drilled well at the Grange Hill site.[18] In April 2014, Cuadrilla published news of their continuing consultation with residents shale gas exploration sites in the Fylde.[19]

In 2011 and 2012, IGas Energy drilled a deep well to evaluate shale gas, and found gas shows in the Bowland Shale, with total organic content averaging 2.7%. The formation was reported to be thermally mature, in the wet gas window. IGAS bought large blocks of gas licences in 2011, much of which is reportedly prospective for shale gas.[20]

IGas announced that it would drill a well to evaluate shale gas at Barton, near Manchester. Drilling would begin in October 2013, and take two to three months. IGas has not applied for a permit to hydraulically fracture the well.[21]

Weald Basin

Main article: Weald Basin

A BGS/DECC report from May 2014 indicates that there is little potential for shale gas fracturing in the Weald Basin, south of London. It does suggest that there is the possibility for the extraction of light tight oil from shales (LTO) [22]

Northern Ireland

According to reports from PricewaterhouseCoopers, there could be £80 billion in reserves in Northern Ireland, although these claims were criticised as being sensationalist.[23]

Resource estimates

According to a 2011 report of the Energy and Climate Change Select Committee, "Shale gas resources in the UK could be considerable—particularly offshore—but are unlikely to be a "game changer" to the same extent as they have been in the US, where the shale gas revolution has led to a reduction in natural gas prices."[24] The Committee's chairperson, Tim Yeo, has since revised his personal opinion, however, and now argues shale gas is a "game changer" that could "transform the UK's energy independence".[25][26] Interest in fracking comes just as imports of gas to the UK have surpassed domestic production for the first time since the 1960s.[27]

Comparison of natural gas prices in Japan, United Kingdom, and United States, 2007-2011

The size of recoverable resource is made difficult by the uncertainty of the percentage, usually small, of shale gas in place that is recoverable. In addition, companies may embrace large estimations of reserves to boost share prices. In the United States, companies had been subpoenaed in 2011 on suspicion that the projections they provided to investors, including press-release figures, were inflated. In 2012, national agencies in the U.S and Poland revised dramatically downward their estimates of shale gas resources.[28][29] Although the exact size of the ultimate recoverable resource is difficult to know, shale gas development in the United States has caused a 44 percent rise in US marketed gas production from 2005 to 2014,[30] while the number of rigs drilling for natural gas in the US declined by two-thirds over the same period.[31] The results have included a drop in natural gas imports to the US, and a dramatic drop in natural gas prices in the US.[32] Inexpensive natural gas from shale cut US wholesale electricity prices in half.[33]

Part of the problem in evaluation is the uncertainty of decline curve analysis from early data: shale gas wells can fall off sharply during the first year or two, then level off to a slower decline rate; the shape of the curve, and therefore the ultimate recovery, is difficult to predict from early production rates.[34]

Before drilling, IGas estimated gas in place of 4.6 Tcf in the Ince Marshes site, though it was unlikely that more than 20% of it could be recoverable;[35] After drilling their first well, IGas announced that the estimated gas in place was at least double their previous estimate.[36] In early 2012, Celtique Energie estimated that there might be as much as 14 Tcf of recoverable reserves in countryside south of Horsham, West Sussex.[5] Preliminary estimates suggest that there may be £70bn worth of shale gas in South Wales,[37] and 1.5bn bbl oil equivalent in Northern Ireland according to a report by PwC.[38]

British Geological Survey

In June 2013, the British Geological Survey estimated the gas in place within the Bowland Shale of central Britain to be within the range of 822 TCF to 2281 TCF, with a central estimate of 1,329 trillion cubic feet (37,600 km3), but did not estimate how much of the gas was likely to be recoverable,[39][40] and cautioned:

"Estimates of the amount of recoverable gas and the gas resources are variable. It is possible that the shale gas resources in UK are very large. However, despite the size of the resource, the proportion that can be recovered is the critical factor."[41]

Industry estimates were that about 10% of gas in place could be extracted.[42] 130 TCF would supply Britain's gas needs for about 50 years.[43][44]

Comment from the British Geological Survey suggested even more substantial shale gas reserves offshore.[45]

US Energy Information Administration

In June 2013, the US Energy Information Administration issued a world-wide estimate of shale gas, which included an incomplete estimate of recoverable shale gas resources in the UK. The Carboniferous shale basins of North of England and Scotland, which include the Bowland Basin, were estimated to have 25 trillion cubic feet of recoverable shale gas. The Jurassic shales of the Wessex Basin and Weald Basin of southern England were estimated to have 600 billion cubic feet of recoverable shale gas and 700 million barrels of associated oil. The agency noted that the UK shale basins are more complex than those in the US, and therefore more costly to drill. On the other hand, as of June 2013, the price of natural gas in the United Kingdom was reported to be more than double the price in the US and Canada by one source[20] and three times higher by other sources.[46][47]

Climate change

UK Fuel Sources of Electricity Generation. 2013 (Data from DECC)

Shale gas is largely methane, a hydrocarbon fuel. As such the carbon dioxide it produces contributes to global warming, although less so than coal. Of more concern is leaking or fugitive emissions of unburned methane, which is a greenhouse gas.[48] It has been argued that, in opening a new source of hydrocarbons, it may reduce the incentive and financing of renewable sources of energy.[49]

The 2008 Climate Change Act committed the UK to reducing CO2 emissions by 50% in 2030, and by 80% by 2050.[50] Currently the UK is generating more than 30% of its electricity from coal, and replacing this with shale gas would be one possible solution that provides reliable on demand electricity as it has a greenhouse gas equivalent value of about half that of coal.[51] Current National Grid energy sources can be seen on a live link [52]

There is evidence that the intermittent nature of renewables means that some other form of energy is needed to fill the gap. The Texas Clean Energy Coalition reported in June 2013 that "there is a strong complimentary relationship between natural gas and renewables. Not only may increasing concerns about air pollution and associated health and environmental consequences create additional costs for coal fired generation, but gas fired generation also matches much better with intermittent renewable generation from solar and wind projects than do coal fired power plants. The path to low carbon generation in Texas will therefore likely require the co-development and integration of both gas and renewable resources."[53]

In April 2014, the Intergovernmental Panel on Climate Change (IPCC) issued its 5th Assessment report.[54] With regard to natural gas, and the shale gas debate, it states "GHG emissions from energy supply can be reduced significantly by replacing current world average coal‐fired power plants with modern, highly efficient natural gas combined‐cycle power plants or combined heat and power plants, provided that natural gas is available and the fugitive emissions associated with extraction and supply are low or mitigated (robust evidence, high agreement). In mitigation scenarios reaching about 450 ppm CO2eq concentrations by 2100, natural gas power generation without CCS acts as a bridge technology, with deployment increasing before peaking and falling to below current levels by 2050 and declining further in the second half of the century (robust evidence, high agreement)".

A 2013 government-sponsored study of the effect of large-scale natural gas development in Britain concluded that emissions from shale gas could be consistent with meeting climate change targets so long as the emissions were counteracted by similar size reductions elsewhere in the world, although the authors suggest that 'without global climate policies...new fossil fuel exploitation is likely to lead to an increase in cumulative carbon emissions and the risk of climate change'.[51]

In November 2014, the UK Energy Research Centre issued a report that stated "gas could play an important role as a ‘bridging fuel’ to a low-carbon economy, but warns that it won’t be long before gas becomes part of the problem rather than the solution". It noted that the UK imports more than half its gas, and that "gas use beginning to fall in the late 2020s and early 2030s, with any major role beyond 2035 requiring the widespread use of carbon capture and storage" [55] It also states "Instead of banking on shale, UKERC recommends rapidly expanding investment in alternative low-carbon energy sources and investing in more gas storage, which would help protect consumers against short-term supply disruption and price rises" [56][57][58]

See also

References

  1. ↑ "Lord Browne: fracking will not reduce UK gas prices", The Guardian 29 November 2013
  2. ↑ "Fracking won't lower energy bills, says Davey", The Telegraph 9 September 2013
  3. ↑ "'Baseless economics': Lord Stern on David Cameron’s claims that a UK fracking boom can bring down price of gas"
  4. ↑ Terry Macalister; Fiona Harvey (19 July 2013). "George Osborne unveils 'most generous tax breaks in world' for fracking: Environmental groups furious as chancellor sets 30% rate for shale gas producers in bid to enhance UK energy security". The Guardian. Retrieved 19 July 2013. Shale gas is a resource with huge potential to broaden the UK's energy mix," said the Chancellor of the Exchequer George Osborne. "We want to create the right conditions for industry to explore and unlock that potential in a way that allows communities to share in the benefits. "This new tax regime, which I want to make the most generous for shale in the world, will contribute to that. I want Britain to be a leader of the shale gas revolution – because it has the potential to create thousands of jobs and keep energy bills low for millions of people
  5. 1 2 3 "Field of dreams, or an environment nightmare?". Retrieved 27 February 2012.
  6. ↑ http://www.bbc.co.uk/news/uk-20707574
  7. ↑ http://royalsociety.org/uploadedFiles/Royal_Society_Content/policy/projects/shale-gas/2012-06-28-Shale-gas.pdf
  8. ↑ Ed Davey, New controls announced for shale gas exploration, 13 December 2011.
  9. ↑ Terry Macalister (21 September 2011). "Vast reserves of shale gas revealed in UK". guardian.co.uk. Retrieved 26 February 2012.
  10. ↑ "Lancashire’s Shale Gas Estimated at 136bn by Cuadrilla". BBC News. 1 February 2013. Retrieved 19 March 2013.
  11. 1 2 Karl West (25 September 2011). "Enough gas in Lancashire 'to last Britain for 56 years'". The Sunday Times. Retrieved 3 March 2012. Browne gets his s adline-grabbing figure of 56 years by simply dividing the size of the entire Lancashire find, about 5.6 Tcm, by annual UK gas consumption, currently around 0.1 Tcm. Such a calculation takes no account of the fact that only a minority of the Lancashire discovery is recoverable.
  12. 1 2 Jonathan Leake (12 February 2012). "Gas find is enough to last 70 years". The Sunday Times. Retrieved 3 March 2012.
  13. ↑ Charles Clover (25 November 2011). "Easing the energy crisis with a bit of Blackpool rock". The Sunday Times. Retrieved 3 March 2012.
  14. ↑ Walton, John K. (1987). Lancashire: a social history, 1558–1939. Manchester: Manchester University Press. p. 111.
  15. ↑ "Lancashire: Historical statistics—Population". Great Britain Historical GIS. Retrieved 3 March 2012.
  16. ↑ "Shale gas firm finds 'vast' gas resources in Lancashire". BBC News. 21 September 2011. Retrieved 26 February 2012.
  17. ↑ Robin McKie (25 February 2012). "Fracking: answer to our energy crisis, or could it be a disaster for the environment?". guardian.co.uk. Retrieved 1 March 2012.
  18. ↑ British company applies for shale gas fracking permit, New York Times, 5 July 2013.
  19. ↑ "Cuadrilla update on Bowland exploration programme". News. 23 April 2014. Retrieved 26 April 2014.
  20. 1 2 US Energy Information Administration, Technically recoverable shale oil and shale gas resources, June 2013, chapter XI.
  21. ↑ Emily Gosden, IGas Energy prepares to drill near Manchester, The Telegraph, 9 September 2013.
  22. ↑ Andrews, I. J. (2014). The Jurassic shales of the Weald Basin: geology and shale oil and shale gas resource estimation (pdf) (Report). London, UK: British Geological Survey for Department of Energy and Climate Change. Retrieved 16 October 2014. line feed character in |title= at position 77 (help)
  23. ↑ BBC, Shale gas in Northern Ireland, accessed 17 December 2013
  24. ↑ House of Commons Energy and Climate Change Committee (23 May 2011). Shale Gas: Fifth Report of Session 2010–12, Volume I (PDF). London: The Stationery Office. Retrieved 26 February 2012.
  25. ↑ Tom Whipple (17 February 2012). "Controversial gas mining technique given green light by US expert study". The Times. Retrieved 5 March 2012.
  26. ↑ Tim Webb (3 November 2011). "Blackpool earthquakes send shudder through hopes of onshore gas boom". The Times. Retrieved 5 March 2011.
  27. ↑ Emily Gosden (29 March 2012). "UK gas imports outstrip production for first time since 1967". The Daily Telegraph. Retrieved 31 March 2012.
  28. ↑ Ian Urbina (28 January 2012). "New Report by Agency Lowers Estimates of Natural Gas in U.S.". The New York Times. Retrieved 23 February 2012.
  29. ↑ Marek Strzelecki (2 March 2012). "Poland Says 22 Shale Gas Wells Under Way or Planned in 2012". Bloomberg. Retrieved 4 March 2012.
  30. ↑ US Energy Information Administration, Natural gas marketed production, accessed 18 October 2014.
  31. ↑ US Energy Information Administration, US natural gas rotary rigs in operation, accessed 18 October 2014.
  32. ↑ U.S. Bureau of Labor Statistics, The effects of shale gas production on natural gas prices, May 2013.
  33. ↑ Julie Johnsson and Mark Chediak, “Electricity declines 50% in US as shale spurs natural gas glut”, Bloomberg, 17 January 2012.
  34. ↑ Alexandra Frean (20 October 2011). "American Notebook: Squeezing another drop from the barrel". The Times. Retrieved 4 March 2012. A typical well in North Dakota's seemingly prolific Bakken shale oil and gasfield, for example, may produce more than 1,000 barrels of oil per day in year [one], but only 200 in year two, according to Lynn Helms, director of the North Dakota Department of Mineral Resources. Existing fracking methods are capable of extracting only 5 per cent of the oil content of the shale. This can be raised to 15 per cent by multiple extractions from each wellhead. Even then, 85 per cent of the oil remains below ground.
  35. ↑ "IGas finds vast shale gas reserves in newly acquired license". ICIS Heren. 26 January 2012. Retrieved 29 February 2012.
  36. ↑ "IGas Energy says Cheshire shale reserves more than double previous forecast". Retrieved 17 April 2013.
  37. ↑ Caroline Rigby (1 July 2011). "Shale gas fracking: call for Welsh Government policy". BBC News. Retrieved 29 February 2012.
  38. ↑ "NI shale gas deposits 'could be worth £80bn' says report". BBC Online. 14 February 2013. Retrieved 17 April 2013.
  39. ↑ http://www.bbc.co.uk/news/business-23069499
  40. ↑ http://www.thetimes.co.uk/tto/business/industries/naturalresources/article3683377.ece
  41. ↑ British Geological Survey, New shale gas resource figure for central Britain.
  42. ↑ (27 June 2013 UK shale gas resources 'greater than thought' BBC News business, Retrieved 11 June 2013
  43. ↑ Chazan, Guy (10 January 2014) Total joins UK’s pursuit of shale boom The Financial Times, Companies/Oil and gas section, (web page may require subscription), Retrieved 11 January 2014
  44. ↑ Urquhart, Conol (11 January 2014) French firm Total to join UK shale gas search The Guardian, Retrieved 11 January 2014
  45. ↑ "UK has vast shale gas reserves, geologists say". Reuters. 17 April 2012. Retrieved 17 April 2013.
  46. ↑ Natural gas prices BP web page, Retrieved 11 January 2014
  47. ↑ (25 March 2013) UPDATE 3-Britain's Centrica to buy U.S. natural gas in landmark deal Reuters, Retrieved 11 January 2014
  48. ↑ Fracking UK shale: climate change (PDF) (Report). Department of Energy & Climate Change. February 2014. Retrieved 21 October 2014.
  49. ↑ "Caroline Lucas: 'I didn't do this because I thought it was fun'". theguardian. 4 April 2014. Retrieved 21 October 2014.
  50. ↑ Rt Hon Edward Davey MP. "Reducing the UK’s greenhouse gas emissions by 80% by 2050". DECC. Retrieved October 2014.
  51. 1 2 MacKay, David; Stone, Timothy (9 September 2013). Potential Greenhouse Gas Emissions Associated with Shale Gas Extraction and Use (PDF) (Report). Department of Energy & Climate Change. Retrieved 22 October 2014.
  52. ↑ "National Grid power sources". BM Reports. Retrieved 24 October 2014.
  53. ↑ Weiss, Jurgen; Bishop, Heidi; Fox-Penner, Peter; Shavel, Ira (11 June 2013). Partnering natural gas and renewables in ERCOT (PDF) (Report). Prepared for the Texas Clean Energy Coalition. The Brattle Group. Retrieved 22 October 2014.
  54. ↑ Edenhofer, O., R. Pichs-Madruga, Y. Sokona, E. Farahani, S. Kadner, K. Seyboth, A. Adler, I. Baum, S. Brunner, P. Eickemeier, B. Kriemann, J. Savolainen, S. Schlömer, C. von Stechow, T. Zwickel and J.C. Minx (eds.). "IPCC, 2014: Summary for policymakers". Climate Change 2014, Mitigation of Climate Change (PDF). Cambridge University Press.
  55. ↑ "Gas can be a bridge to a low-carbon future". UK Energy Research Centre. Retrieved 12 November 2014.
  56. ↑ Emily, Gosden (12 November 2014). "Fracking won't cut bills and ministers 'oversold' shale gas benefits, experts say". Daily Telegraph. Retrieved 13 November 2014.
  57. ↑ "The UK’s Global Gas Challenge". http://www.ukerc.ac.uk/support/tiki-index.php. UKERC. Retrieved 13 November 2014. External link in |website= (help)
  58. ↑ "A Bridge to a Low-Carbon Future? Modelling the Long-Term Global Potential of Natural Gas". http://www.ukerc.ac.uk. UKERC. External link in |website= (help)

External links

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