Some serious-sized companies are starting to eye the shale gas sector, lining up to make the most of the British government’s keenness to see a reduction in dependence on imported energy supplies.
Only last month, petrochemicals giant Ineos announced a multi-million pound deal that saw it acquire a 50% interest in seven shale gas licences in the North West owned by independent exploration firm IGas, along with the option to buy a 20% interest in two further licences in the East Midlands. Ineos is also acquiring IGas’s interest in the shale gas licence around Grangemouth in Scotland which will give the company 100% ownership of this asset.
Shale gas excites Ineos, which will invest £750 million in the sector over the next few years, with plans to drill hundreds of exploration wells across the country.
But while businessmen and politicians can see the upsides of shale gas, the general public remains far from convinced. The industry has done a poor job of assuaging fears over the seismic impact of its drilling activities, and of dispelling concerns about pollution of groundwater supplies. Opposition to the controversial activity has become almost militant in some areas, with exploration sites targeted by vociferous campaigners.
The level of public opposition to shale gas activities is a source of frustration for Ken Cronin, chief executive of the trade body United Kingdom Onshore Oil and Gas, who says that onshore exploration and production has been successfully carried out in sensitive areas for decades. He thinks that the public has been taken in by the “misinformation and bad science” promulgated through the internet, clouding any fact-based discussion that might emerge. “Fracking has developed an anti-following, just like mobile telephone masts did back in the 1990s,” he says. “It’s a fear of the unknown.”
Cronin says that the industry must work harder to get across the message that fracking is a technique that is well understood, and one that could eventually deliver much cheaper energy supplies. “People have lost their connection to energy,” he says. “What we have now is a generation that just plug in their iPads and expect them to work. There is no idea as to how energy actually gets into a house. But public acceptance is vital for the shale gas sector to succeed. We must get social acceptance if the industry is to move forward.”
There’s no doubt that the potential for shale gas is enormous. According to the London School of Economics (LSE), estimates of the UK shale gas ‘in place’ suggest that the amount of resources underground, regardless of the feasibility of extraction, lay somewhere between 2.8 trillion and 39.9 trillion m3. These deposits are centred around three main formations: the Bowland Shale in Northern England, the Weald basin in Southern England, and the Midland Valley of Scotland, says the LSE.
These reserves have been known about for many years, although the recent emergence of sophisticated 3D geological modelling technology is believed to have given a much more accurate estimation of resources than was previously available.
Renewed interest in accessing these resources has, essentially, been driven by the combination of two technologies – the ability to drill horizontally over long distances and new techniques to enable hydraulic fracture along the length of that horizontal well bore to allow gas to flow out.
The technology is relatively well understood. First the well is drilled down to the shale gas interval, usually at a depth of between 1,500m and 2,000m, in a process that would take around 20 days. The well bore is lined with multiple steel pipes, inside one another, and cased with cement to provide protection and safety.
Horizontal drilling into the shale deposits is performed before fluid – 98% water with some dilute chemicals and sand – is pumped at high pressure to crack the deposits and release the gas.
“The permeability of shale is in the hundredths of nano-darcy,” explains geologist Andrew Quarles, technical director at Cuadrilla Resources, the exploration and production company that has applied for fracking planning permission at two Lancashire sites. “Shale is 100 to 1,000 times less permeable than pavement concrete. It’s a very tight rock. It can hold a lot of gas, but the gas doesn’t flow through it very easily.”
Hydraulic fracturing is required to increase the tight permeability of the shale. “The way we do that is by generating a swarm of fractures around the rock. Those fractures create surface area and that connects the matrix, through the fractures, to the well bore and then gas flows up through difference in pressure.
“To emphasise, no explosions are required to do this. That’s a common misconception. We need a fluid to overcome the stresses in the strength of the rock. That’s mostly mains water, as well as recycled flow-back water, but other fluids can be used. And then those fractures are held open with grains of sand, or sometimes even ceramic, measuring in the order of tenths of millimetres.”
Regulation of such activity is tight. The Health and Safety Executive, along with the Environment Agency, are charged with providing a safe operating environment throughout the lifecycle of wells. They must ensure that operators maintain the highest level of safety, particularly around well integrity to ensure that the risk of leaks and water contamination are minimised.
Onshore drilling has been performed for many years at sites across the UK, with more than 2,000 wells drilled, and according to John Blaymires, chief operating officer at IGas Energy, it is a procedure that is well understood. “There’s nothing unconventional about shale gas,” he says. “The only reason it is termed that is because the permeability was historically so low as to be deemed that you would never get anything to flow from it.
“Other than that, everything else the industry does is the same as with conventional oil and gas. It’s an industry that has been operating onshore, safely and responsibly, for a long time.”
Blaymires says that risk management is always at the forefront of people’s minds when onshore activities take place. “We’re engineers. We manage risk. It’s a big part of what we do, particularly onshore, where we are under scrutiny – not just from the regulators, but also from the communities in which we work. We have to do this in a safe and environmentally responsible manner.”
Well integrity is vital, and much thought has gone into well design to reduce risk of water leakage. The well can be thought of as an inverted telescope, with the larger end at the surface, and pipe diameter getting smaller as depths increase.
“We drill down through the shallow aquifers, a couple of hundred metres, and after that the water becomes brackish. It’s vital that we act to isolate these shallow aquifers with casing,” says Blaymires.
The industry still uses imperial units. The conductor pipe, drilled to a depth of around 30m, starts off with a diameter of 20in, and that is cemented in place. “We then drill that out with the 17.5in bit, and set a 13 and 3/8th inch steel pipe inside that, and cement it in place. That is drilled out, going ever deeper, with a 12¼in bit, and we set a 9 and 5/8th inch steel casing inside that. Finally, typically, we get to 8.5in, and we set a 7in liner. Inside that 7in casing we set a production tube, 4.5in, which brings the gas back to the surface.
“The point to recognise is that we have multiple layers of cement and steel, and it is that that provides the well integrity, and which provides isolation between the well bore fluids and the surrounding formation.”
Blaymires says this multi-layered approach to well bore management, along with good knowledge of how cracks will propagate, allays fears that fracking is going to pollute groundwater. The fracking process also takes place hundreds of metres below groundwater formations, being separated by different layers of rock.
“We carefully engineer these fracks,” he says. “I’m not claiming that we can absolutely guarantee how high they go, or what orientation they go in, but I can guarantee that we can pretty much guess which way it’s going to go through computer modelling, understanding the stress regime, the orientation of the well bore and how we frack it – so we can control within a margin the direction they go and the height and depth to which they extend.”
The other major concern about fracking is the unpredictable effect it can have on seismic activity. In 2011, two earth tremors were detected following Cuadrilla’s fracking operations at Preese Hall near Preston.
The first took place on 1 April 2011 and measured 2.3 on the Richter scale. To determine whether this was due to hydraulic fracturing, Cuadrilla worked with Keele University and the British Geological Survey to set seismometers to monitor ground movements around the active well sites as well as the surrounding area. It was during the fourth fracture treatment at Preese Hall on 27 May that year when a second tremor measuring 1.5 was recorded. Following this and after discussions with the Department of Energy and Climate Change, Cuadrilla paused hydraulic fracturing operations while a report was commissioned to discover if there was a link between seismicity and fracturing. The outcome of this study concluded that the earthquakes were caused by fluid injection into an adjacent fault zone during the treatments.
“There was a clear relation between our pumping stages and the seismic events,” says Andrew Quarles at Cuadrilla. “There was definitely a cause and effect. It was not proven to be a direct effect – it was not the actual pressures and the volumes applied immediately during the fracturing, as the main [earthquake] events occurred 8-12 hours after pumping ceased. It was a diffusive process as the pressure wave injected into the ground moved through the rock, interacting with critical stress faults.”
The Preese Hall well was subsequently found to have been drilled very close to a fault. Cuadrilla says it has now invested in sophisticated 3D geological monitoring equipment that should ensure that seismic problems are avoided. “We now know what to avoid,” says Quarles. “This has formed a key part of our mitigation strategy. The key is site selection – avoiding faults.”
The industry has since accepted mitigation measures suggested in an academic report published in the wake of the Preese Hall events that should minimise the risk of seismic activity. The report suggested that hydraulic fracturing procedures should invariably include a smaller pre-injection and monitoring stage before the main injection.
Initially, smaller volumes should be injected, with immediate flow-back, and the results monitored for a reasonable length of time. Meanwhile, the fracture diagnostics (microseismic and pre-fracture injection data) should be analysed to identify any unusual behaviour post-treatment, before pumping the job proper.
Hydraulic fracture growth and direction should be monitored during future treatments, said the report. This should be done with industry standard microseismic 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. And future hydraulic fracturing operations 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 magnitude -1 local magnitude (ML) and above. The number of sensors should also provide an adequate level of redundancy.
The report said that operations should be halted and remedial action instituted if events of magnitude 0.5 ML or above are detected. This was considered a prudent threshold, 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, it was noted.
In response, Cuadrilla says it has adopted early detection systems to prevent a level of seismic activity that could give cause for any concern. Based on a ‘traffic light’ system used in the Netherlands and Germany, Cuadrilla uses a seismometer network around every one of its wells. Using naturally occurring sound sources to map the natural gas reservoir, this system will monitor the seismic activity, feeding back information in real time during hydraulic fracturing jobs. This data will allow the company to adjust the injection volume and rate during the fracturing procedure, managing the process to prevent noticeable seismic activity.
Complementing these technologies will be a monitoring system that will allow the company to detect and plot fracture development more accurately. In doing so it will demonstrate that fractures are thousands of feet away from aquifers near the surface and do not extend to a point that might compromise them.
Cuadrilla says that this series of protocols should minimise the chance of seismic events occurring again, and that it hopes drilling will recommence later this year. “We are confident we can conduct shale gas operations in a manner which is effective and safe, and with the minimal environmental impact,” says Quarles.
Should the likes of Cuadrilla and IGas progress with attempts to commercialise shale gas, the onshore sector could, potentially, create an abundance of employment opportunities. United Kingdom Onshore Oil and Gas says that shale gas could provide 6,500 direct positions and create 40,000 jobs in the supply chain.
The sector is already mobilising to meet this demand through the establishment of the National College for Onshore Oil and Gas, to be located in Blackpool, which will have links to a network of other academic institutions across the country.
John Blaymires at IGas agrees that there is, potentially, an enormous prize in terms of employment opportunities, but that the structure of the supply chain will have to be considered. “One of the reasons that shale gas worked so well in the US is that they have an enormous supply chain backing it up,” he says. “What we have here is a supply chain that is oriented towards the North Sea. We need to have more concentration on onshore activities. Given the fact that a lot of the shale is located in the industrial heartlands in the UK, an opportunity does exist. What we can’t do, though, is operate on a North Sea cost basis – it has to be done differently.”
Charm offensive aims to win friends
Chemicals giant Ineos is to begin a community consultation process in a bid to gain support for fracking.
It will start in mid-April with a series of ‘town hall’ meetings, beginning in areas where the company already holds shale gas licences, then moving across the whole of the Scottish shale gas belt.
The first meetings will take place in 15 towns including Denny, Alloa, Falkirk, Kilsyth, Bishopbriggs and Cumbernauld.
The company says its information programme will give the public the facts about shale gas extraction while highlighting both the issues and benefits. The meetings are also intended to explain its plan to give 6% of shale gas revenues to the local community and provide a chance for people to ask questions.
Ineos Upstream chief executive Gary Haywood says: “The Scottish government wants the public to be fully informed about shale gas production and we are determined to help.
“We are launching Scotland’s biggest shale gas information programme to make sure that local communities get a chance to hear the facts rather than the myths.”
News of the consultations has not been welcomed by environmental groups. Friends of the Earth Scotland accuses the company of resorting to “spin-doctors and glossy videos” in an effort to win over communities.
Ineos has the budget for “a long and dirty fight”, says the charity, while campaign groups “can only fight their corner on a shoestring”.
Scottish Green MSP Patrick Harvie said: “Ineos and its slick marketeers can drink as much tea in as many village halls as they like but I’m quite sure they’ll be politely shown the door.
“Public pressure and Green campaigning forced the Scottish government and Labour to shift position on this issue.
“We need to keep up the fight to win a permanent ban to protect our communities and our climate.”
The development of unconventional gas extraction has been halted by a Scottish government moratorium while further research and a public consultation
are carried out.
Shale gas content online
Video highlights include Ken Cronin, chief executive of UKOOG, discussing its role in the shale gas market and why the UK needs to utilise shale gas to meet rising energy demands.
Steve Thompsett, executive director, UKOOG, talks through the entire lifecycle of integrated water management and storage, while Mathew Humphrey and Professor Sarah O’Hara from the University of Nottingham discuss public perceptions of shale gas referencing their extensive research tracking changing trends in public opinion and the impact that protests, such as those at Balcombe, have on wider public opinion.
Meanwhile, Tiffany Parsons, senior geologist at Centrica Upstream, talks through the technical realities of shale gas extraction and production.