Get fracking!

With a new pro-fracking environment secretary installed and supply security at issue, what better time to press on - cautiously - with shale exploration? asks Peter Styles

Shale gas has been controversial in the UK since small earth tremors were felt near Blackpool in May 2011, caused by shale drilling. The Department of Energy and Climate Change (Decc) subsequently called a halt to all activities and initiated a full investigation.

In my role as head of the Applied Environmental Geophysics Research Group at Keele University, and with more than 30 years’ experience of induced seismicity caused by coal mining, I was invited by Decc to co-author a review of the dangers of hydraulic fracturing, popularly known as fracking. I worked alongside Brian Baptie from the British Geological Survey and Chris Green, an independent expert. Our review found that with sufficient precautions, shale gas exploration should be allowed to continue at the Lancashire site.

With shale gas occupying an estimated 30 per cent of the ground under our feet in the UK, the implications for the rest of the country could be far-reaching. So why, if fracking can cause earth tremors, do I believe that it should be allowed to continue?

We are potentially approaching a turbulent time for the UK energy market and big steps are being taken to move our reliance away from fossil fuels. However, presently we have a worryingly small supply – just 12 days’ worth – of gas storage. Compared with our French and German neighbours, who each have 120 days’ supply, our levels of available gas could leave us vulnerable to an energy crisis. This means we have to rely on gas imports through pipelines, which are themselves environmentally damaging due to the 1.5 per cent rate of methane leaked into the atmosphere during transit. Alternatively, we can ship in liquefied gas at great expense from the Middle East.

All the while, some experts predict we are potentially sitting on top of a supply that could meet the country’s needs for decades, without recourse to reliance on imports from other countries. As well as bringing some much-needed security to our energy needs for the foreseeable future, shale gas could also offer a relatively short-term solution to the supply gap as policymakers deliberate how to migrate the UK to a low-carbon economy.

Environmentalists and safety campaigners have quite rightly raised concerns over the potential dangers posed by trying to get our hands on it. The first worry is the disturbance that the fracturing process causes to seismic fault zones. The drilling process and subsequent injection of fluid into the shale rocks can lead to earth tremors, as experienced in Lancashire in 2011, the largest of which had a magnitude of

2.3, enough to be felt by some but not cause any structural damage.

As such, our report focused on whether steps could be taken to mitigate the risks of further seismic activity. We began by looking at decades’ worth of data on seismic activity in similar rocks caused by mining. The evidence suggests that human activities have caused minor earthquakes for generations, and even the strongest ones are not likely to cause structural damage.

Nevertheless, our report does outline steps that fracking companies should take to mitigate risk through a more cautious approach. Before any drilling takes place, initial tests and geophysical surveys of the area should be done to assess the risk. During the actual fracturing process, caution can be taken by testing the rock with small pre-injections of fluid before the actual full hydraulic treatment. The whole process is already monitored closely with diagnostic equipment, and we recommended that the sensitivity of this equipment is increased.

The level of seismic activity people are likely to notice near a hydraulic drilling site, if they notice it at all, is low. Yet in the interests of being prudent, we also recommended a conservative maximum threshold of magnitude 0.5 as the point at which drilling should be postponed while the risks are reassessed. This is very much erring on the side of caution, as most people are unlikely to feel earthquakes of up to magnitude 2.

Another concern surrounds what happens to all the fluids that get pumped into the rock. The run-off, which typically leaks through the rock formation, also needs to be carefully monitored, and the level of additives closely controlled, to protect our water supply and environment.

With the UK the home of unparalleled legislative and regulatory frameworks, we must ask ourselves if it is wise to look overseas for our energy supply and rely on other countries to help keep our lights on in the coming decades? While we need to move rapidly towards low-carbon energy generation, we can’t give up our addiction to carbon overnight. So it seems sensible that we should consider looking to the wealth of shale gas beneath us to bridge the gap, ensuring energy security for the foreseeable future.

Peter Styles is a professor and head of the Applied and Environmental Geophysics Research Group at Keele University

Shale drilling – legal requirements

Legally, an operator of a fracking facility needs to ensure it has the right to be on the land, a licence to extract the gas and planning permission to operate from the site.

· Land rights – landowner’s permission. As a general rule, a landowner owns everything up to the sky and down to the centre of the earth, so anyone intending to drill and extract will need the permission of the landowner. Failure to get it could amount to trespass. This could result in the landowner being able to stop the operation and potentially sue for damages.

This principle was tested and applied in the case of Bocardo SA vs Star Energy UK Onshore Limited [2010] UKSC 35, where the court found the defendant to be a trespasser because it had installed pipes in the Bocardo land without consent, even though Star was not disturbing any enjoyment of the property.

As with any utility that undertakes below-surface works, a shale operator should ensure it has obtained sufficient subterranean rights from the landowner to enable it to carry out its operation for the lifetime of that project. The type of agreement with the landowner can take different forms depending on the nature and extent of the rights required, and can be tailored for each project. The extent of any payment for the agreement will need to be discussed between the parties.

· Licensing – licence from Decc. All petroleum resources in the UK are owned by the Crown under The Petroleum Act 1998 and pursuant to that Act the government can grant the exclusive right to search and explore for petroleum. This right will take the form of a Petroleum Exploration and Development Licence, issued by Decc. A licence holder will need to meet Decc’s requirements and comply with certain terms and conditions within the licence. The legislation allows holders of such licences to apply to court for the granting of any “ancillary” rights (such as a right to enter and sink boreholes into another’s land) that may be required.

· Planning Permission – from local authority. Operators need to obtain planning permission for exploration from the local authority. If the licence holder wishes to go into production there are other possible consents that it might need to obtain, including permission from the Coal Authority (if operations penetrate coal seems) and planning permission from the Minerals Planning Authority.

According to a report from the Royal Society and the Royal Academy of Engineering, the fracking technique is safe if operators follow best practice and rules are enforced. It goes on to state that with good management of wastewater, chemical contamination should be avoided. Nevertheless, a thorough understanding of potential liabilities is a prerequisite for drillers. Some possible liabilities that might arise from the fracking process under statute and common law are listed below, however a detailed analysis of the technology and how this may have caused any loss or damage would be required in each case.

· Seismic activity resulting from the drilling process.

· Contamination to the water supply caused by substances used in the fracking process.

· Contamination of water caused by the gas itself.

· A claim sought by an adjoining landowner for causing underground or surface pollution following the migration of contaminated water or gases underground.

· Actual disturbance to the surrounding land.

The government faces a challenge in balancing the potential economic benefits of extracting new sources of fuel as against the environmental concerns this may cause. The recent review of the fracking process called for more robust UK legislation, officials hinting at introducing similar rules to those that legislate offshore drilling. What is certain is that, given the level of public scrutiny so far on the fracking process, energy companies investing in this technology need to tread carefully to avoid potential pitfalls.

Carlos Pierce, partner, and Maryam Collett, associate, in the energy group at Field Fisher Waterhouse LLP.

This article first appeared in Utility Week’s print edition of 14th September 2012.

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