FRACKING – the hydraulic fracturing for shale gas trapped in underground rock, using vast quantities of highly pressurised water (millions of gallons per well) – may be in its infancy in this country, but activity behind the scenes is ramping up.
The UK’s oil and gas regulator, the Oil and Gas Authority (OGA), has, over the last decade, awarded a series of geographically defined Petroleum Exploration Development Licences (PEDLs) to prospect commercially for shale gas – subject to planning permission for actual drilling operations – across a huge area that now covers most of Cheshire, the North West and Yorkshire.
But before the UK shale play can move out of the realm of seismic testing and sporadic test drilling, and into the lucrative land of full production, there is a public relations battle that will need to be won.
The gas companies involved in the play are openly supported by a government whose former minister of state for business and energy, Michael Fallon, referred to shale gas as the country’s “big prize”. They – and other large companies that stand to benefit to the tune of billions of pounds a year – are already preparing the ground to win the battle for what the industry’s representative body, the UK Onshore Operators’ Group (UKOOG), highlights in its part-government funded report Getting ready for UK shale gas as the quest for “social acceptance”. To this end, a generous “Wealth Fund” has been promised, one through which local communities will be offered a £1.1 billion share in the proceeds of fracking, in return for living alongside wells.
Despite the dangling of such carrots, this is not a battle that will be easy to win – anti-fracking groups have sprung up everywhere that PEDL licences have been awarded, though it appears unlikely that big business will give up without a fight.
The money game
Because the potential value to the supply chain that will be needed to support a full-scale production phase of shale gas – specialist drilling and pumping equipment, enormous quantities of concrete, steel and aggregates, chemicals, water supply/wastewater treatment and disposal facilities, transportation, not to mention land, and lots of it – is estimated by UKOOG at £33bn between now and 2032. Not to mention the potential profits for the gas companies from extraction.
For the government the threat of dwindling oil and gas tax revenues serves only to enhance its need for a new (and taxable) source of energy. The UK’s oil and gas industry – which as recently as 2010–11 paid £9.6bn in tax – paid just £2.1bn in 2014–15, and was actually paid back £200 million by the taxman last year.
Given the tax deductible costs associated with decommissioning as the North Sea resource depletes, the Office for Budget Responsibility expects zero income from gas and oil to become the norm by 2025. It comes as little surprise, then, that the Government’s accounting body said in its 2015 report: “The potential exploitation of shale oil and gas represents a significant upside risk.”
Proving the case
There can be no doubt that the UK is facing a looming energy crisis. As recently as 2003 the UK was a net gas exporter – just 14 years later it is set to import 53% of its annual requirement of 3 trillion cubic metres (3tcm) from abroad. By 2035 this import dependency is predicted by the UK Oil & Gas Authority (OGA) to rise to 81%. For gas and oil combined import dependency will rise from 44% this year to 76% by 2035.
For the UK Government, unsurprisingly, energy security (or lack of it) is a key driver behind its urgency to support the fracking industry. In 2013 the British Geological Survey utilised its significant resources to compile a report that demonstrated a Gas-In-Place projection (the theoretical maximum size of the shale gas resource) of 1,376 trillion tonnes in the so-called Bowland Shale Formation that stretches from the Irish Sea, through North Wales, Cheshire and Lancashire, across the Pennines to Yorkshire, Humberside and the North Sea.
The gas companies, which have investors and financiers to satisfy, claim that up to 20% of the Gas-In-Place figure is potentially extractable (274tcm). The more widely accepted figure is nearer 10% (137tcm), although an American report suggests that the complicated and highly fractured geology of the Bowland Shale play as compared to the geologically simpler plays of the huge American reserves could mean that in the UK only as little as 4% is commercially extractable. That’s still a lot of gas though (55tcm), enough to power all the UK’s gas needs for 18 years, or, more realistically, a significant portion of it for the next 50–100 years once production is in full swing.
The problem is, nobody really knows how much shale gas is potentially extractable or what a “full production rate” might actually look like; nor, more presciently, how many individual wells can realistically be drilled from a single (highly visible) platform or “wellpad”.
This latter issue is a particularly sensitive one for the fracking industry and its advocates, and one I will investigate in a future article. Suffice it to say here that if a low-intensity American or Australian model of relatively few wells/wellpad is followed, thousands of wellpads, each sized larger than two football fields and served by potentially thousands of truck movements and the construction of supporting road infrastructure, will be needed.
The BGS public relations exercise in Frodsham
On Thursday evening the British Geological Survey (BGS) outreach team will be in Frodsham to present details of its “preferred” location – a 28km2 area of Ince Marshes – for the establishment of a £31 million “world class research site to explore low-carbon renewable energy”.
Looking at the BGS/National Environmental Research Council (NECC)-issued Community Engagement Leaflet that publicises the event, there is little (indeed nothing) that hints at any connection between the research site and any future plans for a shale gas extraction program, either here or indeed anywhere else.
The leaflet outlines an “exciting energy research proposal” (para 1) that will “research into natural, sustainable resources for heat and energy [that are] vital for the future of our world. New low-carbon energy technologies must be developed. To do so we need to understand more about the subsurface.” (para 2)
There is only a single mention of the word “gas”: “The observatory will enable [scientists] to study how gases and fluids [it doesn’t say which ones] flow within different rock types and between different layers of rock over the next 15 years. Their research will leap forward our understanding of the way that the earth beneath our feet could provide low-carbon energy solutions.”
Reading all this you could be forgiven for thinking that this is all about “sustainable” (one mention), “low-carbon” (three mentions) energy forms – not the controversial and potentially environmentally hazardous fracking for shale gas (no mention).
Indeed the word “shale” is remarkable only in that it does not appear even once in the entire leaflet, which simultaneously abounds with ‘sexy’ PR-speak phrases like “Eyes and Ears of the Underground”, “Underground Observatory”, “World-class research”, and “new energy technologies”.
The anti-fracking lobby claims that this ‘observatory’ – which amounts to the drilling of 80 boreholes across the marshes to collect geological data for closer scientific scrutiny – is little more than a “Trojan Horse”; the “independent” scientific validation that the unconventional (shale) gas industry, and the government, needs to form the basis of a justificatory campaign that it is both safe and opportune to move towards large-scale fracking for shale gas.
Coincidence or not, there is no denying that the preferred location for the observatory happens to be right on the doorstep of the very area where PEDL 184 licence holder IGas/INEOS is well advanced in its planning application to Chester and Cheshire West Council to begin flow testing of its 1,900m deep vertical exploratory drilling operation in Ellesmere Port; and PEDL licence 190 where it has drilled to a depth of 1,577m at its Ince Marshes-1 site and part way into a potentially very productive Bowland Shale seam that it believes to be 494m thick in this location.
Fracking has not taken place at either site, and at the Ince Marshes-1 site iGas currently only has licence permission to extract coal bed methane and not shale gas. Last month, however, it submitted a “scoping request” to CWaC council as part of a bid to drill a new well from the site, this time with the intention of fracking for shale gas.
As for nearby Frodsham and Helsby – they sit within the more recently-awarded (September 2016) PEDL licence area 294, owned by INEOS. The drilling and testing program here lags behind developments in Ince and Ellesmere Port, but, critically, the licence conditions set out from the start “firm commitments” for two vertical wells of up to 4,500m deep and from each of them a horizonal appraisal well “and [to] conduct hydraulic fracturing operations from them“. These will be among the first exploratory wells to allow for horizontal drilling as part of the licence term. This is a relatively new technology that expands significantly the amount of rock that can be fracked from a single wellpad, and without which the industry as a whole cannot hope to extract shale gas profitably over the long term.
The coincidence apart of all these operations taking place on or near Ince marshes where exploratory evidence suggests huge volumes of shale gas, there is another piece of evidence suggesting the real reason behind the drive to drill exploratory boreholes in this quite specific location.
In a media release dated 11 October the BGS says it is delivering a £31m investment in two subsurface research field sites – one of them being in Ince marshes – but goes on to state that “the Cheshire Energy Research Field Site is not dependent on fracking taking place to deliver vital new geological evidence. The observation boreholes [which will range in depth from 25–1,200m] will not go into the Bowland Shale.”
In media and PR speak this is what is known as a “DOSU” – a Denial Of Something Unsaid. It is denied that the research is “dependent” on fracking, or that the boreholes will even inform about the Bowland Shale layer that is of specific interest to the gas companies. What is not denied (nor directly admitted either) is that the results will help inform the upcoming environmental debate surrounding the extraction of shale gas, and the threat that it – and the mix of toxic chemicals used in the fracking process – pose to groundwater supplies.
And yet, buried on page 38 of the Government’s 2014 Autumn Budget Statement, in paragraph 1.122, we are told “the government will allocate £31 million of funding to create world class sub-surface research test centres through the Natural Environment Research Council”, with the aim of “establish[ing] world leading knowledge which will be applicable to a wide range of energy technologies including shale gas and carbon capture and storage”.
Could this be the same £31 million project that we are now being told has little, if anything, to do with shale gas or fracking?
I’m not suggesting for one moment that the BGS is not qualified to carry out geological research, it most certainly is; nor that its data will be made public. But it is surely worth considering that last year some 55% of the BGS’s £48.5 million of annual funding came either as a direct grant from the Natural Environmental Research Council (NERC), or from competitive contracts awarded by the same body. Not to mention the further 4% of its funding that came directly from government departments; and a further £9.6m of NERC-approved capital funding for the BGS’s recently opened Lyell Centre in Scotland.
NERC, it turns out, “is funded mainly by the Department for Business, Energy & Industrial Strategy [the very same government body that is aggressively spearheading the shale gas extraction strategy], but we also receive support from other government departments.”
Publicly at least the BGS seems reticent about using the words “shale” and “fracking” in relation to its proposed Cheshire Observatory (which, incidentally, still requires planning permission); and yet a significant proportion of the ‘England’ section of its 2015/16 Annual Review is dedicated to this very topic.
The time of words – spoken and unspoken – of smoke, of mirrors, of lines and what lies between them is upon us; a time of promises, and of “expert” opinion, as extremely powerful lobbies ramp up the battle to construct a “social contract” that will open the door to a likely idealised portrayal of how fracking will be “different” here. In such times it is incumbent upon us all to question everything…
If you have concerns or questions to raise about the purpose of the BGS borehole study on Ince marshes, Thursday’s (16 November) meeting at Frodsham Community Centre starts at 6pm.
The author is not a member of any anti-fracking organisation, or any political party.