Time to set the scene for shale

Opinion and political grandstanding are clouding the way for those trying to draw up a roadmap for fracking in the UK, says Mike Foster, and our future energy security is at stake.

As political activity steps up a gear in the run-up to the general election in May, it is of little surprise to me that shale gas extraction (hydraulic fracturing) has been high on the agenda in the House of Commons. After all it has all the hallmarks of a key election issue, covering the environment, the economy and energy security.

But, as hydraulic fracturing gathers pace in the UK, the true story about fracking becomes clouded. This makes it harder for the government and consumers to form a sensible, informed and pragmatic opinion on shale gas extraction. This poses a threat to our future energy supply and discourages innovation and investment. We must set the scene for shale and we must set it soon.

Hydraulic fracturing is nothing new, it was first undertaken in North America in the 1940s, and small-scale fracturing techniques have been used globally for several decades in the extraction of “conventional” oil and gas in sandstone or limestone reservoirs.

In the UK, small-scale fracking close to the wellbore has been used in North Sea gas and oil fields since the 1970s, and in onshore conventional hydrocarbon wells since the 1980s. A 2010 report from Montgomery & Smith estimated that 60 per cent of all new oil and gas wells worldwide were being hydraulically fractured. The current debate relates to shale or “unconventional” gas and its extraction which, put simply, is an expansion of current practice.

Fracking for shale gas is still very much in its infancy in the UK, although there have been some notable developments since a ban on the process was lifted in late 2012 and since technological advances have increased the financial viability of fracking.

Opposition to fracking has become something of a political football of late, with various celebrities joining the anti-fracking campaign and more recently the recommendation by the Environmental Audit Committee for a “moratorium on the extraction of unconventional gas through fracking”. A moratorium on what? We haven’t had any fracking for shale gas since 2011.

Sensibly the bid was rejected. But the government agreed to Labour proposals for 13 new conditions to be met before shale gas extraction can take place – many of which industry leaders say are being met already. Nevertheless, if their presence in the Infrastructure Bill paves the way for greater buy-in then this can only be a good thing.

So what is the potential for shale? In its 2012/13 annual review, the British Geological Survey said: “The estimated resource is large, with the median value being 1,300 trillion cubic feet.”

This is double the previous estimates. To put it into context, in 2013 the UK’s total demand for natural gas was approximately 3 trillion cubic feet. Of course, further research must be carried out to establish how much shale could be extracted, as extraction rates depend on the economic, social and geological factors at each site. However, if the estimates are correct, can we afford not to at least give shale gas extraction the investigation it deserves?

Currently, only a few exploration wells have been drilled. Ministers and the industry say that 30-40 wells will have to be drilled to assess the real potential of shale gas to UK gas supplies, which are increasingly reliant on imports from Norway and Qatar as North Sea production declines.

National Grid is forecasting up to 90 per cent dependence on imported gas by 2030. The UK is definitely going to be burning some gas for many years to come and it makes sense to have a domestic supply, where economic, rather than import potentially expensive gas from overseas.

That is not to say that environmental concerns don’t need addressing thoroughly. Appropriate legislation and regulation needs to be created to safeguard individuals, their properties and the wider environment.

Some critics argue that shale gas extraction goes against the UK’s carbon reduction targets. But this is a red herring in the debate about shale because any UK-produced gas from shale would displace imported gas. The overall impact being that carbon emissions would not increase.

The need to reduce our emissions implies  a reduction over time in the quantity of fossil fuels being burned, and because shale gas is a fossil fuel, some see it as detrimental to the longer-term plan to reduce carbon dioxide emissions and move towards a larger percentage of energy from renewable sources.

Carbon capture and storage could be a way to “have it all”, but we don’t have a large-scale carbon capture and storage industry up and running. Indeed, we don’t even have even the vague pretence that we are likely to have a large-scale carbon capture and storage industry up and running at any point in the near future. After almost ten years of two steps forward, one and three-quarter steps back, the UK and Europe are now lagging badly behind other nations in their pursuit of carbon capture and storage.

A shale gas strategy developed in tandem with a successful carbon capture and storage programme, together with the right legislation and regulations, could play a credible role in the UK’s low-carbon economy.

Shale is no quick fix, and we are still in the early stages of its exploration. Nobody can say for sure how much usable shale gas exists in the UK, but it could be a key and valuable resource in a more diverse energy mix – especially as the production of North Sea gas declines in the future.

 The only way we will find out just how valuable is to conduct properly regulated exploration. Let’s hope that if industry meets all the new legislative requirements then it is allowed to get on with it and reveal the true potential of fracking before we either celebrate or condemn.

Mike Foster, chief executive, Energy & Utilities Alliance