Cuadrilla Prepares for UK Fracking Operation
UK-based Cuadrilla has begun drilling a pilot well onshore in the north of England as a first step towards testing the commerciality of shale gas production in the UK.
It has permission to drill four horizontal wells which it will hydraulically fracture, in the hope of releasing vast amounts of natural gas for sale into an import-dependent market, following the success story of shale gas production in the US.
A spokesman told NGW August 17 that it hoped to analyse the results from the pilot well this year, and also drill horizontal wells – and possibly begin the fracking process too – in 2017.
It said in a statement late July that the drilling equipment had arrived at its Preston New Road site, in Lancashire.
Also August 17, the company made its first payment of £100,000 ($129,000) to a community benefit fund as part of the compensation for the disruption the drilling work will entail. The Community Foundation for Lancashire will consult with the local community on which types of issues or projects the funds should be spent.
The industry group that represents the upstream onshore, UK Onshore Oil and Gas (Ukoog), announcing the payment, said the Community Engagement Charter "was set up to acknowledge the important role that local communities play in hosting sites on behalf of everyone in the country. Local communities are set to receive £100,000 for sites that host exploration wells where hydraulic fracturing takes place and 1% of revenue for those sites that produce commercial quantities of gas."
Current estimates show that for the first 400 commercial sites, communities will receive approximately £800mn directly and local authorities would receive more than this through business rates, according to Ukoog.
These 400 sites will reduce the growing and worrying import dependency in the UK by over 50% and create as well as sustain many thousands of highly-skilled jobs.
Cuadrilla's news was undermined somewhat by freshly published research by John Underhill, professor of stratigraphy at Heriot-Watt University, Edinburgh, declaring that very little gas would be recovered from the UK, as the geology was too poor. This appears to contradict analysis of the work done by the British Geological Survey (BGS). It was interpreted to mean that hundreds of billions of cubic metres of gas were waiting to be extracted from the Bowland shale, a rich seam running deep beneath Britain, depending on the cost of production.
In association with the upstream regulator Oil & Gas Authority, BGS found that shale gas-in-place in central Britain in an area between Wrexham and Blackpool in the west, and Nottingham and Scarborough in the east ranged from 822 trillion ft³ and 2,281 trillion ft³, but the central estimate for the resource is 1,329 trillion ft³.
Ukoog said that it was too early to comment on the recoverability of the gas. “The industry is currently in the process of 3D seismic surveying, core drilling and flow testing in various parts of the country to determine a number of questions including the extent of the geology and whether gas will flow commercially – this process of exploration is an industry standard around the world. Consequently the data that Professor Underhill based his work on is limited. All operators are very much aware of structural complexity in parts of the European continent and the programme of 3D seismic acquisition is designed to quantify this in detail for the first time. The notion that all North American unconventional plays are structurally less complicated than in Europe is questionable."
And the union representing gas workers, GMB, called for government to give the go-ahead to more exploratory wells so that an informed, facts based debate can take place. In a statement reacting to Underhill's comments, it said: "Rather than speculating how large Britain's shale gas reserves might be, the sensible course of action would be for government to give the go-ahead to sufficient exploratory wells to establish exactly how much gas is present."
Britain is one of the few countries in Europe to allow hydraulic fracturing, having imposed a moratorium in 2011 while it carried out a lengthy analysis of the risks. The moratorium was imposed when Cuadrilla reported very low-level seismic activity, a possible consequence of its hydraulic fracturing activities, at another site. The government concluded that, properly regulated, it posed no risk to health and safety. However, environmental groups have been obstructing sites where fracking is planned.