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Recent developments in mining technology have meant that the extraction of shale gas is now commercially viable. The method used, “fracking”, is controversial and has attracted a lot of publicity. Mark Howard, Head of our Planning and Environment Team, has been looking at the background to this process and some of the issues.
THE NEED FOR UK SHALE GAS
In 2009, 86.5 billion cubic metres of gas was consumed in the UK, this generated almost half of the UK’s electricity and fuelled the majority of residential heating. In the same year almost half of UK gas consumption was from gas imported from overseas. So there are compelling arguments for securing domestically produced gas. Shale gas can potentially meet some of the demand.
It is estimated that the UK could meet around 10% of its current gas needs from shale gas if it is extracted at a commercial rate. The British Geological Survey estimated in 2013, that the potentially recoverable reserves were 74-148 billion cubic metres, which is equivalent to approximately 2 years’ of the UK’s demand for gas. The commercially recoverable resources may be slightly less.
IMPACT OF SHALE GAS EXTRACTION
The process by which shale gas is extracted is by pumping fluid at high pressure into rock which creates fractures which provide paths for the gas to flow into the well to be captured.
In 2010 a developer started extracting shale gas in a location near Blackpool. Shortly afterwards, in the spring of 2011, earthquakes were felt on two occasions in the same area. An investigation was launched and fracking operations were suspended during that time. A report concluded that the earthquakes were induced by the fracking operations, but that there was no reason to suspend operations provided mitigation of the risks were adopted.
This type of seismic environmental impact is clear and obvious, but it is by no means the only impact.
THE ENVIRONMENT
Contamination of Drinking Water
There are concerns about the potential for shale gas to leak into groundwater. In the US a report commissioned by the US Environmental Protection Agency found that fracking had contaminated groundwater and drinking water supplies. There are concerns that the process will cause some of the fluids used in fracking to flow back up over the well, and these may include small amounts of natural gas, salts, metals and naturally occurring radioactive materials. These will need to be treated and disposed of so as to avoid them migrating into groundwater or surface waters.
Impact on Regional Water Resources
A further issue is the quantity of water involved in fracking and the impact this will have on local water resources. Most of the water used in fracking remains in the wells and unlike a lot of the industrial uses of water the water used in fracking cannot be treated and returned to a nearby water body.
The total volumes of water used for fracking are between 9 and 90 million litres, the equivalent to the annual water use of 170–1700 people in the UK. Some in the industry say that comparatively the amount of water used in fracking is less than that of other industries and the levels can be managed. Water can be sourced from the Local Utility Company or, alternatively, the extractor can apply to the relevant regulator if they want to take water from groundwater or surface water. In England they will need to apply to the Environment Agency for an abstraction licence.
Local Air Pollution
Perhaps less obvious, is that fracking gives rise to the emission of Carbon Dioxide (CO2) and methane (CH4). But overall it has potential to cut greenhouse emissions.
The emission of CO2 occurs when gas is released from the well, when the well is in the final stages of completion to test recoverability. Burning the shale gas results in CO2 emissions but these emissions are lower than the CH4 that would otherwise have been emitted, thus having a lower global warming potential. It is thought that the extraction of shale gas could be used to a transition to a low carbon economy by displacing fuels like coal.
As might be expected, for such a controversial technology, with such obvious environmental impacts, the regulation of fracking is far reaching and comprehensive.
UK REGULATORY REGIME
The extraction of shale gas is likely to require the following consents:
- Consent from the landowner(s) whose land will be affected by the exploration. Failing that then an application must be made to the Secretary of State.
- Petroleum exploration and development licence. The licences are granted by the Department for Energy and Climate Change on behalf of the Crown.
- Planning Permission. Consent is required from the relevant Minerals Planning Authority, which is commonly the County Council. They may require an Environmental Impact Assessment to be conducted to consider all of the environmental effects. Shale gas extraction will not be considered a Nationally Significant Infrastructure Project.
- Environmental Permits. To cover impacts and the operations that will be taking place.
In addition to the regulatory regime that is in place, there is a wider issue. The extraction of shale gas is a matter of such public interest that the Government has needed to take a position on it. The political analysis of fracking has been thorough, lengthy and considered.
UK GOVERNMENT APPROACH
Following a significant amount of formal investigation and debate, the Government is currently minded to pursue the extraction of shale gas, and that is reflected in a number of committee decisions and reports.
In 2011 the House of Commons Select Committee on Energy and Climate Change published their report “Fifth Report: Shale Gas”. The report considered the following:
- Prospects for Shale Gas Extraction
- Risks and hazards associated with Shale Gas
- Potential carbon footprint of large-scale shale gas extraction
It was concluded by the committee that shale gas drilling in the UK should be permitted.
A further report, published in 2013 entitled “The impact of Shale Gas on Energy Markers” concluded that:
- Shale gas exploration should be encouraged because the exact extent of the recoverable resource is unknown in the UK
- The impact of shale gas on gas prices both nationally and internationally is still unknown and government policy should not be drafted on the basis of the cost of imported gas being reduced.
- The extractions of shale gas could impact on the UK’s ability to meet its statutory Climate Change targets. The committee concluded that the Government needed to:
a) Complete its research into the emission of greenhouse gases.
b) Prioritise developing commercial scale carbon capture and storage so that the role of gas in the future can be determined.
So in addition to the technology producing commercial gas, there is also a clear and strong element of research, and a need to determine the likely extent and effect of this mining technology.
Consequently, the Secretary of State for Energy and Climate Change is prepared, in principle, to consent to new fracking proposals. However, any proposal will need to properly consider the specifics of the proposed site, environmental factors, and the results of the necessary and inevitable public consultation that will need to be conducted.
The industry is still very much in its infancy with only one developer commercially extracting so far. Large scale and widespread fracking in the UK has not yet arrived.
However, shale gas offers an element of energy independence, opportunities to develop into the mining technology market, a range of associated employment, tax revenue, and a possible stepping stone into a low carbon economy.
Fracking is here to stay.
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