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Shale gas - Shale gas, groundwater and

climate change
The f irst company to seek shale gas in the UK has sunk its f irst borehole near Blackpool. But the
new technology , which could hugely increase gas reserv es, comes with the risk of polluting
groundwater and other concerns, Gareth Simkins reports

A technology has come to the UK that may prov ide a new and signif icant source of natural gas.

But US experience has shown shale gas comes with env ironmental risks, not least to groundwater.
It could also pose a signif icant challenge to UK policies f or decarbonising electricity supplies.

Britain's f irst exploratory shale gas well was sunk in August near Blackpool. Although it is still f ar
f rom complete, early indications are promising. Further exploration will f ollow. Commercialisation
could prov ide a relativ ely low-carbon f uel f or y ears to come.

Unlike conv entional natural gas, shale gas is trapped in dense sedimentary rock - shale - and
cannot f low through it. The trick, now mastered, was to f ind way s of mobilising it (see box, p41).

The f irm now drilling in the UK is Cuadrilla Resources, f ounded in 2007 and based in the midlands
town of Lichf ield. It has held exclusiv e rights f rom the energy and climate department (DECC) to
explore 1,130 square kilometres of east Lancashire f or gas and petroleum since 2008 It also intends
to drill in the Netherlands next y ear and has interests in Spain and Poland.

British Gas explored the Bowland shale f ormation in Lancashire in the 1980s but technology was not
adv anced enough to make extraction v iable. The 320-million-y ear-old geological f ormation extends
into Cumbria, Yorkshire, the east midlands, north Wales and out into the Irish Sea, reaching the Isle
of Man.

Cuadrilla is a small company , keeping its head down 'to av oid the hy pe' ov er the technology , say s
chief executiv e Chris Cornelius. It has no website, and obtaining a phone number was not easy .

But his choice of words downplay s the impact shale gas has had across the Atlantic, where the
modern approach to extracting it was dev eloped. The US has gone f rom hav ing a negligible supply
of shale gas ten y ears ago to 35,000 wells today . Imports of liquef ied natural gas hav e been halv ed
in three y ears, and shale gas now meets 10% of the nation's natural gas demand, according to a
recent Chatham House report.1 The f ederal gov ernment expects that to at least double by 2020.

The growth is largely due to tax breaks, suitable geology , high gas prices, industry experience and
technological innov ation.

Global expansion

Exploration is growing across the world. Shell and ExxonMobil hav e both bought industry pioneers in
the last 12 months.

Cuadrilla itself has some serious money behind it. In February , two priv ate equity f irms - energy
specialist Riv erstone Holdings and the Carly le Group - bought a dollars 58m stake in it. Lord
Browne, BP's f ormer chief executiv e, is one of Riv erstone's directors.

The f irm is 41% owned by the Lucas group, an Australian inf rastructure company with interests in

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unconv entional gas and horizontal drilling, a key technology used in shale gas extraction.

Dr Cornelius admits Cuadrilla is too small to bring the f our exploratory wells it plans to drill to f ull
commercial production, should that prov e possible. Instead, he expects the likes of BP to buy the
f irm. Large-scale shale-gas dev elopments 'would require billions of dollars of inv estment', he say s.

His colleague Mark Miller told ENDS in late Nov ember that results f rom the f irst well were
encouraging. Strong gas shows were detected in mid-September. The maximum drilling depth will be
3.5 kilometres.

Eurenergy Resource Corp holds rights in the Sussex Weald, but it f iled f or bankruptcy in March and
ENDS was unable to contact it.

Central England, highland Scotland and other areas may also hav e potential. Licences f or these
areas could be picked up in the next round of onshore licensing, due early next y ear.

DECC say s the apparent inv olv ement of only two f irms so f ar may understate interest in the UK's
shale gas potential. It could not conf irm which other companies might look f or the gas, because
exploration licences grant the right to seek all av ailable f orms of hy drocarbon. But a spokesman
said: 'Many other companies are considering shale.'

The geologies of the Weald and east Lancashire are similar to the Barnett shale of Texas, which
may hold the US's largest reserv es. But shale gas extraction is unlikely to hav e the same impact
here that it has done there.

Eastern Europe and Germany hav e greater potential than the UK, according to Andrew Aplin,
prof essor of petroleum geoscience at Newcastle Univ ersity . But 'nothing is prov en y et'. Prof essor
Mike Stephenson, head of energy science at the British Geological Surv ey , say s there is little
certainty about the UK's potential. But if American technology works here, 'we'll probably get a
shale gas rush'.

Dr Cornelius was more sceptical, stating there was 'no chance of a shale gas rush in Europe ov er
the next f ew y ears'. Barriers include lack of experience, limited amount of land away f rom built-up
areas and restricted supplies of specialist equipment.

But if these hurdles are ov ercome, shale gas could hav e signif icant env ironmental and economic
impacts. The Chatham House report say s plentif ul and cheap shale gas supplies would cut demand
f or energy ef f iciency technologies and renewable energy . This echoes an analy sis by the
International Energy Agency last Nov ember (ENDS Report 418, p14).

A gas glut would make coal ev en less attractiv e as a f uel f or electricity generation and strengthen
the case f or f itting carbon capture and storage capacity to gas-f ired power stations rather than
coal-f ired ones (ENDS Report 425, p18). But production f rom shale gas wells tends to peak earlier
than traditional ones, presenting more uncertainty f or global energy markets.

As ENDS went to press, the Commons Energy and Climate Change Committee announced an
inquiry into the potential impact of shale gas on the UK.

In the US, the price of carbon in the pilot emissions trading market set up in the north-eastern
states - the Regional Greenhouse Gas Initiativ e - has f allen 25% ov er the past y ear largely due to
power stations switching to the lower-carbon f uel.

Natural gas generally produces about half as much carbon dioxide per unit of usef ul energy as coal,
but there are questions about how just how low carbon a f uel shale gas is.

A ty pical shale gas well requires hy draulic f racturing or 'f racking' bef ore it deliv ers commercial
quantities of gas. The practice, which has the potential to cause groundwater pollution, uses a
mixture of water and sand at about 500 times atmospheric pressure to break up the rock, allowing
gas to f low out of it.

Drilling, cementing and f racking requires energy , adding to the carbon burden of shale gas. This also
cuts the ratio of energy produced to energy 'inv ested' in each f ield. Although there has been little
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research into the energy return on energy inv estment of shale gas, it is thought to be much lower
than the 10:1 f igure ty pical f or conv entional US gas f ields.

But leakage into the atmosphere might be more signif icant f or climate change. The gas consists
mainly of methane, which has 25 times the global warming potential of CO2 ov er 100 y ears.

The US Council of Scientif ic Society Presidents expressed its concerns about this in a letter to
senior politicians in May . It labels shale gas, like maize ethanol, 'another example where policy has
preceded adequate scientif ic study '. But research on the carbon impact of shale gas leakage is
sketchy and not y et peer rev iewed.

Newcastle Univ ersity 's Prof essor Aplin say s solid ev idence is needed. It is important to put the
issue in context, as 'methane is leaking naturally to the surf ace in many parts of the world'. The
British Geological Surv ey 's Prof essor Mike Stephenson is similarly sceptical. Although poorly
controlled f racking might cause surf ace leaks, its great depth makes that unlikely , he say s.

Cuadrilla's v ice-president of operations Mark Millar say s seismic tests show it is dif f icult to grow
f ractures bey ond 100 metres or so. 'I would hate f or people to think it is a process with no control to
it,' he adds.

But it is more local env ironmental problems that hav e caused controv ersy , as shale gas
dev elopment surges ahead in the US.

Fears about the chemicals used in f racking, spills, explosions and allegations of illness caused in
local communities hav e created a sizeable protest mov ement against shale gas in the US,
documented in a recent f ilm, Gasland.

This f eatures the arresting spectacle of methane-laced water being set on f ire as it emerges f rom a
household's sink tap. But such contamination has been known to occur naturally .

Dev elopments also turn of ten scenic and isolated areas into industrial sites, requiring hundreds of
truck journey s to build, supply and remov e waste.

Lax regulation

Seemingly lax regulation has not helped the situation: shale gas extraction is exempt f rom f ederal
drilling regulations aimed to protect groundwater. Some states also hav e their own rules on the
practice; New York State politicians are seeking a temporary ban.

US shale gas industry association Energy in Depth counters critics by say ing hy draulic f racturing
has been perf ormed f or more than 100 y ears. It takes place kilometres underground, f ar below
drinking water aquif ers. Well casings should also stop contaminants escaping, it argues.

But this has not alway s prov en true. On 1 September, a North Dakota oil shale well undergoing
f racking ruptured its casing, spilling more than 400 cubic metres of crude oil and f racking f luid into
its bund.

And Cabot Oil & Gas Corporation receiv ed a dollars 120,000 civ il penalty in Nov ember f or
contaminating drinking water supplies with gas in Dimock, a small and isolated Pennsy lv anian
community 200km north-west of New York city . Another penalty of dollars 240,000 f ollowed this
April f or f ailing to address the problem. The incident was again blamed on def ectiv e casing.

Pennsy lv ania's department of env ironmental protection has ordered the f irm to prov ide a public
water sy stem, at an estimated cost of dollars 11.8m, or dollars 656,000 per household. Cabot will
obey the order but denies responsibility f or the gas migration. It say s there is ev idence to suggest
the substance is biogenic gas f rom rotting material at shallow depths, and not f rom the shale itself .

Last month, the same regulator ordered Chesapeake Energy , which has joint v entures with BP and
French oil f irm Total, to ev aluate casings on 171 wells f ollowing methane migration into a riv er and
priv ate water wells.

Ov er the past 12 months, Pennsy lv ania has also suf f ered a f ish kill caused by spilled f racking f luid

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and a shale gas well blowout, which spewed mud, gas and brine into a f orest f or 16 hours.

Such headline-grabbing problems hav e af f ected only a f ew wells across the US. Nev ertheless, in
recognition of these problems, Congress has ordered the f ederal Env ironmental Protection Agency
(EPA) to inv estigate the health and env ironmental risks of shale gas extraction. Initial results are
due in two y ears.

'It's critical that the extraction of this v aluable natural resource does not come at the expense of
saf e water and healthy communities,' say s EPA administrator Lisa Jackson.

The regulator is also putting together an adv isory committee on f racking, composed of industry
staf f and env ironmental experts.

In Europe, ExxonMobil, Chev ron and well serv ices f irm Schlumberger, which sank Poland's f irst
shale gas well on 21 September, are among the f ounders of Gas Shales in Europe (GASH) a
research initiativ e aiming to predict where in Europe shale gas may be extracted. Its members are
considering an inv estigation into the threat to groundwater.

Prof essor Aplin, part of the GASH project, say s the depth at which f racking is perf ormed made
pollution unlikely . 'Whilst this is an issue that needs to be taken seriously , the lesson f rom the US
is that it can be done saf ely ,' he say s.

Poor design

Cuadrilla's Mark Miller has experience of shale gas dev elopment in Pennsy lv ania. He blames
problems there on operators taking shortcuts.

Mr Miller added that 'hy dro-f racking alway s gets the blame f or pollution', but the f ault lies with poor
well design and implementation.

Dr Cornelius said Cuadrilla is 'being v ery caref ul' about cementing the well. 'We are committed to
show the local community that we can do this right,' he said.

Two sets of casings down to sev eral hundred metres below ground are being used, to protect the
Sherwood sandstone aquif er ly ing abov e the Bowland shale.

An impermeable membrane stretches across the site to catch any spills and the site is f ully
bunded. Gas produced during testing will be burned of f behind a screened f lare during day light
hours. Any f luids f lowing out would be tankered away by road.

The containerised drilling platf orm that the company is using has a 5,000-pounds per square inch
blowout prev enter.

Drilling mud, pumped down and up the well hole to lubricate the drill bit and bring rock cuttings to the
surf ace, is processed and recirculated. This cuts demand f or water and thus av oids the need f or
groundwater abstraction or lengthy piping.

The application suggests that drilling the exploration well will require 90 tonnes of water to create
drilling mud and this will be supplied by road tanker. Fracking, planned in late January , would
demand f ar more water, but Dr Cornelius said the process may not be perf ormed during well testing.
Natural f ractures could generate high f low rates immediately , and thus make f racking unnecessary .

If a well produces too little gas to be commercially v iable, it will be plugged and abandoned. If tests
prov e positiv e, the well will be shut down and a v alv e assembly installed on the surf ace.
Dev elopment may then f ollow, subject to gov ernment approv al.

The UK's regulation of the oil and gas industry is regarded as more rigorous than the US's.
Gov ernment permission is needed to drill each production or exploration well, which must be to
approv ed standards of design and engineering.

Plans f or well testing and f urther dev elopment must also be approv ed by DECC. The abandonment
of wells must be approv ed by the Health and Saf ety Executiv e.

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The British Geological Surv ey and the national env ironmental regulator must be notif ied of plans to
drill. Regulatory approv al, in the f orm of an env ironmental permit in England and Wales, is also
needed f or ef f luent discharges into a soakaway or a watercourse.

Finally , dev elopment consent and minerals extraction permission must be sought f rom the local
council. Lancashire County Council handles both in the case of Cuadrilla's activ ities.

Fracking presents f urther regulatory hurdles. First, Env ironment Agency consent would be needed
to drill new boreholes f or groundwater abstraction, if Cuadrilla intended to obtain water that way
rather than tanker it in. Obtaining more than 20m3 per day would also require an env ironmental
permit.

An env ironmental permit may also be necessary f or the f racking operation itself . But f racking is not
directly mentioned in UK regulations, and the need f or a permit has not y et been f ormally assessed
by the agency , or judged in the courts.

The Env ironmental Permitting (England and Wales) Regulations 2010, prohibits direct discharges of
pollutants below ground. But the legislation allows an exemption f or injecting water 'into geological
f ormations which f or natural reasons are permanently unsuitable f or other purposes', where this
would not compromise groundwater quality .

This would mean f racking can be legally perf ormed, if subject to an env ironmental permit, according
to agency groundwater technical specialist Stev en Lee. The permit would enable conditions to be set
on the practice, such as f orbidding the use of certain chemical additiv es.

In any case, the regulations require the agency to prev ent the entry of toxic, persistent and
bioaccumulativ e substances into groundwater, such as the biocides of ten added to f racking f luids in
the US. Cuadrilla intends to av oid these concerns by using a simple process (see box).

More generally , activ ities that might indirectly pollute groundwater may also be subject to
env ironmental permits, according to the regulations. This would appear to cov er f racking, due to the
risk of f luids escaping f rom boreholes.

Cuadrilla stay s 'in real close touch' with the agency , according to Mr Miller, responsible f or
regulatory compliance. But until contacted by ENDS, the company 's two executiv es were not only
unaware of the likely need f or a permit, but also of the env ironmental permitting regime as a whole.

Nev ertheless, an agency press of f icer told ENDS that Cuadrilla was inf ormed during the planning
process f or its f irst well that an env ironmental permit may be needed f or f racking, and that the
f irm's 'guy s on the ground' were well aware of this.

Dr Cornelius said the f irm, 'will hav e to clarif y ' the situation. It would not f rack the site under legal
uncertainty . Doing so would risk a large f ine and be a blot in the nascent industry 's copy book.

It is still f ar f rom guaranteed that the wells will be f ruitf ul and turn Blackpool into a Lancastrian
Dallas. But as conv entional oil and nearby gas supplies dwindle, it seems certain that Europe will
f ollow the US in exploiting whatev er shale gas it has.

What the legacy of this will be f or UK groundwaters depends on the perf ormance and regulation of
companies like Cuadrilla.

gareth.simkins@ends.co.uk

Download at endsreport.com

- 1. The 'shale gas rev olution': hy pe and reality , Chatham House

Condenser

The extraction of natural gas directly f rom shale rock is expanding rapidly in the US, adding to gas
reserv es.

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The practice is contentious. Drinking water aquif ers hav e been polluted and surf ace waters hit by
spills and blowouts.

But this has af f ected a relativ ely small number of the 35,000 wells in the US. The US EPA is
inv estigating.

Interest in the technology is growing worldwide. Major oil and gas f irms hav e bought some of the
pioneers.

The UK's f irst exploratory borehole was sunk near Blackpool in August. Prospects f or shale gas in
Britain are uncertain.

Env ironmental regulation of shale gas drilling is still under dev elopment in the UK.

How shale gas is produced

Natural gas is usually obtained f rom permeable rock ly ing beneath impermeable rock, which traps it
deep underground. Gas f lows through the permeable rock matrix to accumulate beneath this barrier.
Drill down into it and gas rushes to the surf ace.

Shale is dif f erent. It is a f ine-grained sedimentary rock through which gas cannot mov e easily .
Much of the gas, which f orms f rom the action of heat and bacteria on organic material, remains
where it was produced. But natural f issures in the rock allows some gas to rise. The new methods
f or exploiting shale gas create f issures on a huge scale.

To do this, a borehole is sunk into the shale and directional drilling is used to bore horizontal shaf ts.
These can continue f or kilometres along shale seams.

Hy draulic f racturing, or 'f racking', is then used. A pressurised mixture of water and sand is sent
down the shaf ts to splinter the rock. The exercise may need to be repeated many times.

Each well needs about 10,000 cubic meters of water to f rack f ully , according to a US gov ernment
report.1 This can put pressure on local supplies, particularly where existing demand and well
densities are high.

The sand remains in the f ractures to prop them open af ter the water is pumped out. The liquid is
treated and disposed of on-site or stored in ponds f or of f -site disposal.

Caustic and toxic additiv es such as hy drochloric acid, petroleum distillates, surf actants, oxidants
and biocides may contaminate the wastewater. Some remain underground.

But UK dev eloper Cuadrilla will use only sand, tap water, poly acry lamide (a non-toxic f riction
reducer) and possibly glutaraldehy de as a biocide. The chemical is used widely in industrial water
treatment.

Fracking can also bring up salts and natural radioisotopes, either in solution or in rock and sludge.

Some shales also prov ide oil, which can be extracted in much the same way .

- 1. Modern shale gas dev elopment in the United States: A primer, US Department of Energy

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