Outreach & Policy

The European Commission Directorate-General of the Environment has released a consultation on Unconventional Fossil Fuels (e.g. Shale Gas) in Europe. The submission produced jointly by the Geological Society of London and the Petroleum Exploration Society of Great Britain can be found below.

The terms of reference for the consultation can be found on the European Commission's website.

Submitted 28th March 2013

1.This submission has been produced jointly by the Geological Society of London and the Petroleum Exploration Society of Great Britain:

i. The Geological Society is the UK’s learned and professional body for geoscience, with more than 10,500 Fellows (members) worldwide. The Fellowship encompasses those working in industry, academia and government with a broad range of perspectives on policy-relevant geoscience, and the Society is a leading communicator of this science to government bodies and other non-specialist audiences.

ii. The Petroleum Exploration Society of Great Britain (PESGB) represents the national community of Earth scientists working in the oil and gas industry, with over 5,000 members worldwide. The objective of the Society is to promote, for the public benefit, education in the scientific and technical aspects of petroleum exploration. To achieve this objective the PESGB makes regular charitable disbursements, holds monthly lecture meetings in London and Aberdeen and both organises and sponsors other conferences, seminars, workshops, field trips and publications.

iii. The comments below relate principally to shale gas in the UK, as this document is based on several consultation submissions and public statements made by GSL and PESGB on this topic, including:

• UK House of Commons Energy and Climate Change Committee inquiry: Shale Gas (2011)

• Royal Society/Royal Academy of Engineering inquiry: Shale Gas (2012)

• UK Department for Energy and Climate Change (DECC) consultation: Preece Hall Shale Gas Fracturing – Review and Recommendations for induced seismic mitigation (2012)

• Geological Society briefing note on Shale Gas (2012)

• UK House of Commons Energy and Climate Change Committee inquiry: The Impact of Shale Gas on Energy Markets (2012)

We would be happy to supply copies of any of these documents, which are also available at www.geolsoc.org.uk/policy.

Unconventional fossil fuels

2. Shale gas should be seen in its context as one of a range of types of unconventional gas (and other hydrocarbons), including tight gas and coal bed methane (CBM). There are some prospects for the latter in the UK. There is no agreed meaning of ‘unconventional’, though it now usually refers to resources which unlike classical reservoirs are not confined by geological boundaries. Greater effort is usually required to extract them compared to ‘conventionals’. At one time, reservoirs under deep water were referred to as unconventional, but deep water drilling has now become conventional. Generally speaking, it is the means by which a resource is extracted, rather than the nature of the resource itself, which causes it to be considered unconventional.

3. Although many hydrocarbons companies still have separate teams for unconventionals, there is a healthy trend away from regarding these as a distinct well-defined category, and towards considering a range of hydrocarbon and other energy resources, with many varying characteristics (some of which will affect ease of extraction and economic viability), governed by common factors (regulatory frameworks, technologies, carbon price, energy prices) in the context of holistic global and local energy systems. A single field may have the potential to deliver some combination of conventional and unconventional hydrocarbons, hot water, and sequestration of CO2 (possibly with enhanced oil recovery). The economics of such a holistic view may be very different to considering each resource alone. In Saudi Arabia, for instance, it is thought unlikely that shale gas could be generated at a profit, but it might be used to generate sufficient energy to drive secondary oil recovery on the same site

Shale gas and its extraction

4. In ‘conventional’ hydrocarbon reservoirs, oil and gas have migrated upwards from where they were formed, through permeable rock such as sandstone, to become trapped beneath an impermeable bounding layer. When gas is instead formed in impermeable shale and cannot migrate, it is trapped within the shale both as adsorbed molecules on grain surfaces and as free gas. Because shale is not permeable enough to allow the gas to flow to a well bore (as is the case for ‘conventional’ gas extraction), shale gas is extracted by other means, and is hence referred to as an ‘unconventional’ resource.

5. Extraction of shale gas at commercial rates requires hydraulic fracturing (also known as ‘fracking’), to enable it to flow at a sufficient rate. This process has been routinely used by the oil industry in extracting conventional hydrocarbons since the mid-twentieth century. In order to produce shale gas economically, hydraulic fracturing is used in conjunction with ‘horizontal drilling’. A conventional near-vertical well bore is drilled and, on reaching the gas-bearing shale layer, is directed at a shallow angle (often described as horizontal) within the shale. Fracking fluid is injected, opening up fissures in the rock and allowing the gas to be extracted. Some of the fluid returns to the surface via the well bore as ‘flowback water’ immediately after the fracking operation, and then later as a by-product of ensuing gas production.

6. Hydraulic fracturing requires a great deal of water to be injected, much of which then returns safely to the surface as part of the subsequent production operations. Fracking fluid consists mainly of water and sand, which acts as ‘proppant’ to keep fractures open. Small quantities of chemicals are added (usually less than 0.5%) to reduce surface tension enabling the fluid to pass easily through fractures, to kill bacteria and to prevent build up of scale in the well. Such chemicals are also often used in conventional hydrocarbons drilling. The composition of flowback water largely reflects that of the fracking fluid, but it also contains materials from drilling operations and from the shale itself, and may include small quantities of zinc, chromium, nickel, arsenic, sodium, calcium, magnesium, uranium, radium, chlorides, radon and various organic compounds. Cleaning up fracking fluid and any produced waters is an essential part of the shale gas extraction process. Several US resource companies are working on projects to improve the environmental friendliness of fracturing fluids.

What are the risks?

7. To establish and maintain public confidence in any shale gas exploration or production programme, it is important that all significant perceived risks and uncertainties are given serious consideration, whether or not they are considered to be material by technically expert communities. There are two distinct questions to ask in identifying potential risks. Firstly, can such activity be carried out safely? Secondly, would it in fact be done safely? The first question is essentially one of risk identification and assessment, and the second of risk management (in particular, of ensuring appropriate and effective regulation). There are risks and challenges associated with the extraction of any mineral resource, including shale gas. The technology to explore for and extract shale gas is well established and we are confident that, given sufficient care and attention, it is possible to locate and extract shale gas safely.

8. Geoscientists are used to dealing with uncertainty, whether due to incomplete data, or the conceptual and structural interpretation of these data. Indeed, such uncertainty drives further research and data gathering. However, uncertainty can also undermine public and stakeholder confidence in cases where economic and environmental risks and benefits must be weighed, especially where the regulation and governance of novel technologies is under examination, and can disrupt market mechanisms. It is important that geoscientists work with other specialists and decision-makers to communicate effectively to the public the nature of such uncertainty and how it can be constrained. In the case of shale gas, geological uncertainty may relate not only to the extent of shale gas resources, but also to the possible effects of its extraction (e.g. extent and nature of induced seismicity and fracture propagation). These uncertainties are only likely to be significantly reduced through conducting further research and data gathering in the context of careful, well-regulated exploration.

9. Four areas of potential risk which have given rise to particular concern among policy-makers and the public are: groundwater contamination; water sourcing and disposal; induced seismicity; and carbon emissions. All will need to be addressed before commercial extraction of shale gas proceeds in the UK, and should be addressed in other jurisdictions where licensing of such operations is being considered.

Groundwater contamination

10. In the UK, groundwater provides 35% of our drinking water. Groundwater is also important to support surface water flow and regulate the health of ecosystems. Concerns have been raised about the possible contamination of groundwater by methane, fracking fluid chemicals, and dissolved contaminants in flowback water, as a result of shale gas operations.

11. In the UK, most aquifers used for drinking water lie within the first 300 metres below the surface, while fracking operations would take place at a depth of more than two kilometres. Assuming wells are properly constructed and well integrity is not compromised (see 12 below), contamination of groundwater through migration of methane and fracking fluids from shale formations to shallow aquifers through stimulated fractures could only take place if the fractures are able to propagate vertically through the intervening layers of rock. Recent analysis of fracking operations in the USA, combined with data obtained from natural fracturing of rocks, indicates that the probability of a stimulated fracture exceeding a height of 350 metres is around 1 per cent.1 The analysis suggests that if a separation distance of at least 600 metres is maintained between aquifers and fracture zones, the risk of a fracture propagating to the aquifer and causing contamination is extremely low. Confidence in this result would be increased by conducting similar analyses for European shale formations.

12. There are several aspects to well integrity, including well design, integrity of the cement bond between the casing and the well bore, and composition of the casing in the context of its ability to resist corrosion. If all these aspects are appropriately and effectively assessed, understood and regulated, it is possible to construct and operate wells without endangering human health or the local environment. A further source of potential contamination of near-surface groundwater is leakage from surface fracking fluid storage and processing facilities.

13. There are recorded instances of methane in groundwater in the USA in areas where shale gas operations have taken place. A more likely cause than migration through fractures is methane leakage at the well site itself, due to poor design or construction, or subsequent damage. (Historically, onshore US hydrocarbons operations have not always been effectively regulated, and in some areas there is a lack of records relating to well design and construction.) Methane can also occur naturally in shallow groundwater. Geochemical analysis can distinguish this (biogenic) methane from thermogenic methane from deep shale formations. Baseline studies of methane in groundwater, such as that currently being carried out by the British Geological Survey for areas of the UK likely to be prospective for shale gas, will enable any increase due to shale gas operations to be quantified.

Water sourcing and disposal

14. Between 9,000m3 and 29,000m3 of water is required to drill and carry out multi-stage fracturing of each well in US operations, with multiple wells often located on a single ‘well pad’. In areas where fresh water supplies are already under stress (or at times when this is the case), abstracting fresh water at this level for shale gas extraction is therefore likely to cause additional stress. For shale gas to meet 10% of UK gas demand would require 1.2-1.6 million m3 of water annually. However, this represents only about 0.01% of licensed annual water abstraction for England and Wales in 2010. Increasingly, it is possible to use saline or recycled water for shale gas extraction, and work is underway to develop better integrated water management solutions.

15. Some of the fluid remains in the deep sub-surface, where it aids retention of the mechanical integrity of the rock. Between 20% and 80% returns to the surface as flowback water, where it must be managed safely. In small amounts, this can be disposed of in standard industrial water treatment plants. Larger volumes of fluid require specialist processing for disposal or re-use. Flowback water may contain Naturally Occurring Radioactive Materials (NORM) at low levels, as is the case in conventional oil and gas extraction and some areas of mining, and procedures for their effective management are well-established. The chemicals used in the fracking solutions are familiar to the hydrocarbons industry and we see no reason to believe that, given appropriate regulation, water cannot be sourced and disposed of without endangering human health or the local environment. The risk of mobilising natural uranium from source rocks has been raised in the research literature. We are not aware of any evidence of harm.

Induced Seismicity

16. Induced seismicity – the release of energy stored in the Earth’s crust triggered by human activity – is known to be caused by activities such as mining, deep quarrying, geothermal energy production and underground fluid disposal. In 2011, two seismic events of magnitude 2.3 and 1.5 took place in Lancashire, UK, close to a fracking test site operated by Cuadrilla. Operations were suspended, and subsequent studies have suggested that hydraulic fracturing is likely to have been the cause, by reactivating an existing fault. This raised concern about the risk of further induced seismic events caused by fracking. (The Department for Energy and Climate Change (DECC) subsequently gave permission for Cuadrilla to resume exploratory operations in Lancashire, with a ‘traffic light’ system in place, to give early warning of any further induced seismic activity. Cuadrilla’s operations are currently suspended once again, though for separate reasons.)

17. The maximum magnitude of any seismic event is dependent on the mechanical strength of the rock in which it occurs. The crust in most of the UK is relatively weak, and unable to store sufficient energy for large seismic events. This means that the largest natural earthquake we can expect is likely to be no greater than magnitude 6. However, based on our understanding of the mechanical strength of shale and case studies of fracking operations in the USA, it is extremely unlikely that seismic events induced by fracking will ever reach a magnitude greater than 3. These are likely to be detectable by few people and are highly unlikely to cause any structural damage at the surface. To minimise the risk of seismic events even at this level, operators should avoid drilling through or near faults, and baseline micro seismicity should be monitored in real time before, during and after fracking in order to discriminate seismic events induced by human activity from naturally occurring events. The monitoring of damage to well integrity, in addition to careful well planning to avoid such zones during any drilling operations, will help reduce the risk of seismic events. Monitoring of this kind would be a significant undertaking, and would incur cost and delays to any drilling operations. A benefit would be to help build public confidence as well as to mitigate operational and production risks.

18. Micro-seismicity will result whenever large volumes of fluid are injected into rock – for instance, in carbon capture and storage (CCS) or geothermal energy generation. Many other drilling operations also induce micro-seismicity. This is well known and understood in the hydrocarbons industry, and any associated risks are already effectively managed in existing exploration and production contexts. This is therefore not an unfamiliar risk to subsurface scientists and engineers. Moreover, operating companies routinely draw on background knowledge derived from other applications in order to identify relevant uncertainties and then to minimise and manage such risks, especially in planning well locations to avoid significant faulted or unstable zones.

19. It is important to have a detailed understanding of the local structural geology and geomechanical characteristics of the subsurface (both overburden and potential shale gas reservoir), to improve identification and characterisation of faults, and modelling and mitigation of induced seismicity (as well as other possible impacts). Smaller volumes of fracking fluid should be injected initially. While the automated detection of larger events is done routinely, detecting low magnitude events is not yet routine. It is also important to note that interpreting and assessing microseismic data carries with it uncertainty and such data may be open to differing interpretations by different scientists – they represent a valuable tool, but will not always provide clear-cut unequivocal answers. The licensing regime should require public deposit of such data after a reasonable period (as is done for North Sea hydrocarbon seismic survey and well data – downhole geophysical logs, cuttings, core, etc), so that they can be inspected by the wider scientific community.

20. It is important that any thresholds are set for induced seismicity in the context of shale gas exploration and production, although it would be wise to bear in mind that this is likely to set a precedent for other uses of the subsurface, both with regard to hydrocarbons (for extraction and storage) and in other contexts (geothermal, engineered subsurface structures, etc).

Carbon Emissions

21. The July 2012 report on ‘Climate impact of potential shale gas production in the EU’, prepared for the European Commission by AEA, provides a useful overview of the widely varying conclusions of existing studies of carbon emissions resulting from the extraction and use of shale gas. It notes that this variation is largely due to authors’ selection of narrow sets of data, different interpretations of such data and different framing assumptions. It also points out that ‘overall, the emissions from shale gas are dominated by the combustion stage’ (p iv). Shale gas and conventional gas are the same substance, albeit found and extracted in different geological settings, so the emissions from their combustion are the same. Emissions at stages prior to combustion include fugitive emissions of methane (a considerably more potent greenhouse gas than carbon dioxide) at the point of extraction, those resulting from processing (e.g. liquefaction), and from its transmission/transport. Fugitive emissions at some shale gas well sites have been found in some studies to be higher than for conventional gas.

22. Looking at the range of studies, it is uncertain whether total emissions from shale gas are greater or less than those from imported conventional gas, for instance. In fact this is likely to vary from case to case, as the level of fugitive emissions will depend on factors such as well integrity and the design of production processes, and those resulting from transport will depend on its mode and distance. As with other potential environmental impacts of shale gas extraction, appropriate and effective regulation is required to minimise fugitive emissions. The comparison with coal is more clear cut – emissions resulting from the extraction and use of shale gas are considerably less.

23. This does not mean that natural gas (whether conventional or unconventional) can be extracted and used with impunity, in the absence of carbon capture and storage (CCS). Nationally, at a European level and globally, we will continue to be dependent on fossil fuels for several decades, and if the resulting carbon emissions are not abated, this is likely to have very significant negative effects on our environment. The geological record contains abundant evidence of the environmental changes associated with rapid periods of release of carbon into the atmosphere in the deep past. (See the Geological Society’s Climate Change Statement at www.geolsoc.org.uk/policy_statements.) With sufficient care and attention, shale gas could be safely produced, but the emergence of shale gas as a major fossil fuel increases the ‘urgency of bringing carbon capture and storage technology to the market and making it work for gas as well as coal’ (UK House of Commons Energy and Climate Change Select Committee Announcement 45a, 23 May 2011).

What R&D is required?

24. R&D is required not just with regard to real or perceived risks and uncertainties about impacts, but also to understand better the extent of shale gas resources in Europe, including in the UK, and to improve the efficiency of their identification, characterisation and extraction. These factors are not only commercially important, but are germane in considering how much time and expense can be justified in assessing risks and ensuring appropriate and effective regulation. We note that a number of UK and other European institutions are in the early stages of significant shale gas research programmes.

25. More is known about the geology of some areas of Europe, including the UK, than that of almost anywhere else in the world. But while we know that there is potential for shale gas, and we have a great deal of background data, work to determine the size of the resource, and whether it is economically viable to extract, remains in its early stages, particularly because past exploration has not been carried out with the objective of identifying shale gas resources. Work is underway to identify and characterise potential shale gas resources, as well as to improve our understanding of the relevant geology, which in turn promises better characterisation, and hence improved resource estimates and productivity (for instance by helping identify ‘sweet spots’ in gas plays).

26. Shale gas plays vary enormously in their properties and characteristics. In particular, the favourable geology characterising most of the major US plays – such as thick, high TOC (total organic content) oil-prone source rocks with low clay contents, deposited in large, relatively unstructured basins – are not generally found elsewhere. European plays tend to be smaller and more complex. In many places, there is a high level of heterogeneity within plays, on a scale of metres to hundreds of metres horizontally, and down to centimetres vertically. These challenges are not intractable; they drive research and data gathering, but could act as a limiting factor to commercial development.

27. Companies incur significant commercial risk whenever they undertake drilling, both for exploration and for production. They depend on high-quality science, done by themselves and by others, and on the development of new technologies to minimise and manage this risk.

Resources and Reserves

28. There is significant shale gas resource beneath the surface of the UK and elsewhere in Europe, although the extent of that resource and how much of it can be extracted economically is largely unknown at present. The terminology surrounding estimates of energy sources varies widely. It is important to recognise the distinction between resources and reserves.

29. Resource is the amount of gas underground. Reserve is the amount of gas which can be produced economically – that is, which we can realistically expect to extract from the ground given current technological, economic and social/regulatory constraints. Another term which is sometimes used is ‘technically recoverable’ resource – this is the amount which could be extracted given current technology, but without reference to economics (cost of extraction and price) or social acceptability.

30. The amount of resource can be more or less well defined, depending on how well the geology is understood, and the type and extent of exploration carried out for the resource in question. Typically, resources are considered in terms of discovered resource (irrespective of whether these are thought likely to be technically or economically recoverable), and undiscovered resource (based on mapped leads and knowledge of the geology, and necessarily much less reliable). Reserve estimation is much less certain (and more probabilistic) than the estimation of resources, as it depends on a wide variety of geological, technological, economic and socio-political factors. This is not to suggest a lack of sophistication in reserve assessment, which is the subject of a great deal of highly expert work in hydrocarbons companies. Reserves are typically classified as proven, probable or possible (depending on the assessed probability of their being technically and economically producible). In the case of shale gas, the uncertainties are exacerbated by the different nature of the resources compared with conventional hydrocarbons, where seismic imaging of the subsurface has a major role in defining resources and reserves, and the fact that shale gas resources have been much less explored.

What can geologists say about resources?

31. Estimates of geological resources are always uncertain, and vary over time, but the level of uncertainty is currently greater for shale gas than for conventional hydrocarbon resources. Estimates can be made of the total resource in the ground, based on geology and on information gathered through exploration and production activity. The technically recoverable resource is smaller, and will vary depending on the technology available at any point in time.

32. It is impossible to provide a single set of figures indicating how much shale gas or other unconventional gas might be economically recovered (and how this compares to reserves of conventional gas), either in the UK or more widely. DECC currently cites an estimate of UK shale gas reserves of up to 5.3 TCF, based on a report produced by the British Geological Survey (BGS) in 2010. It is now widely thought that reserves could be considerably greater than this. DECC has commissioned BGS to provide a more detailed analysis and estimate of the total shale gas resource (gas-in-place) in the Bowland Shale, to better understand its potential future contribution to the UK energy mix. This work is due to be completed and published in the near future. Cuadrilla’s 2011 resource estimate of 200 TCF of shale gas in the Bowland shale under Lancashire is disputed by many, and is unlikely to be indicative of recoverable reserves.

33. We are not aware of comprehensive and authoritative data sources regarding shale gas resource and reserve estimates elsewhere in Europe, but we would be pleased to discuss this matter further if it is of interest to the Commission. The US Energy Information Administration identifies China as likely to have the greatest technically recoverable shale gas resources worldwide, estimated at 1275 TCF. They estimate technically recoverable resources in the USA at 863 TCF, and those in the UK at 20 TCF.

Should shale gas be extracted?

34. Whether or not shale gas should be extracted, and the part it should play in the energy mix (if any) depends on political, economic and social factors, as well as on geological and technological considerations. The UK Government has indicated that it sees shale gas as contributing to the country’s future energy mix. This is a political decision, on which our organisations do not have a view. Geoscientists do nonetheless have a vital role to play in providing research, information and expert advice to inform such decision-making, alongside others.

35. If shale gas usage were to substitute for the burning of coal there would be a potentially beneficial reduction in CO2 emissions as we move to a low carbon economy. However, our continuing dependence on fossil fuels, of whatever form, over the coming decades will only be compatible with avoiding potentially dangerous global environmental change if the resulting carbon emissions are abated. It is therefore important to demonstrate carbon capture and storage (CCS) at commercial scale urgently, and to ensure its widespread and rapid implementation.