UK & Shale Gas: No Time for Complacency
At Unconventional Gas Aberdeen 2014, Duarte Figueira, Office of Unconventional Gas & Oil (OUGO), Department of Energy and Climate Change (DECC), recalled that in 2003, the UK had been a net exporter of natural gas, but was now a net importer.
“And by 2025, we're expected to be importing close to 70% of the gas we consume – and the main reason for that is declining production in the North Sea, where we're falling from a peak of 108 BCM at the turn of the century, to perhaps 20 BCM by 2030, about one-third of projected demand,” he explained.
This meant that Britain could not be complacent, he said.
“By increasing energy production from indigenous, lower carbon fuels, as well as renewables, new nuclear and using energy more wisely through efficiency programs, that policy seems to protect the country as far as possible from volatile global fuel prices.”
OUGO, he explained, coordinated the role across government and with regulators to provide a single point of contact for stakeholders on shale, reporting to the Energy Minister Michael Fallon, but separate from the oil and gas licensing function of DECC.
According to Mr. Figueira, OUGO was all about maximizing the use of natural resources, enabling developments to happen while maintaining environment safeguards, making sure local communities benefit, supporting public engagement and building a knowledge base going forward.
He cited that presently the UK consumed 70 BCM/annum, about one-third of UK primary energy demands. “A quarter of that's used to produce electricity, but the majority's used to cook our food and heat our buildings,” he remarked. “It's reasonably easy to get hold of on export markets, it's flexible, readily available – it's the cleanest fossil fuel and much better for the environment than coal, when generating electricity – about half the carbon footprint.
By 2030, Britain's electricity would have to come from a mix of renewables, nuclear and gas.
“So in the next 2 decades or more, gas in the power sector will support our ability to reduce carbon emissions while we develop low carbon alternatives for electricity, and if carbon captures storage (CCS), as we expect and hope, is successfully deployed, gas will look to play a major role in power generation into the 2030s and beyond.”
One added environmental benefit was that emissions could be controlled via using such an indigenous source.
Regarding the potential contribution of shale gas to the UK, Mr. Figueira reported that the British Geological Survey was investigating the geology. He added, “The Bowland shale suggests a very large rock volume: potentially some 37 trillion cubic meters of gas.”
Similar studies, he said, were being implemented in the Weald basin and in the Midland Valley in Scotland.
He offered, “We can't be certain yet how much the gas will be physically extracted, how it will flow or how much can be extracted commercially viably.”
Yet, he continued, according to one scenario by the Institute of Directors from 2013, Britain's shale gas production could reach around 32 BCM/annum, supporting around 70,000 jobs directly in the supply chain and in the wider economy, providing a net benefit in terms of tax revenues. “So the Government has concluded that it's plain common sense that we pursue the shale possibility, if we can realize these benefits without jeopardizing our environment.”
It was important to remember, said Mr. Figueira, that the industry was at the exploration stage, something which would take 2-3 years in which 20-40 wells needed to be developed.
He admitted that there were legitimate concerns about the environment and safety risks, often drawn from the experience of the US. “We need to explain to the public how the regulation of exploration is carried out.”
The process, he showed, involved negotiating access with landowners, operators receiving planning permission from the local Mineral Planning Authority (MPA), consultation with national environmental regulator. The MPA also determined weather an environmental impact assessment was required; separate environmental permits from appropriate national environmental authorities were also necessary.
He said that DECC would only give consent to drill following that numerous conditions had been fulfilled with a host of authorities.
“While we believe that shale gas can be developed sensibly and safely with the right regulation, we shouldn't forget that we have a very strong tradition of civil engineering and mineral extraction in this country, so we are skilled and vastly experienced and so have some of the tightest safety and environmental regulations in the world,” explained Mr. Figueira, who also cited a study by Public Health England report, according to which the risks to human health regarding air quality, radon, waste water, etc. were low if the process were properly run and regulated.
Shale gas was also a fossil fuel, he admitted, so it was up to the industry to make sure that its extraction did not create greater emissions than gas that would be imported to the UK.
But shale gas could only reach its potential if it could overcome public opposition. Mr. Figueirea commented: “People are nervous about new technology like fracturing for shale gas; they've heard the horror stories and there are strong lobby groups vying for their attention.
“There will be places where it's inappropriate to drill a shale well, just as there are places where it's inappropriate to put wind turbines or build nuclear power plants. The most important thing the Government can do,” he explained, “is to provide evidence-based information that can inform people of the reality, so that they can make up their own minds on that.”
Mr. Figueira reported that UOGO was revamping its information for the public, producing a series of leaflets to address their concerns and questions, to help separate fact from fiction.
Drew Leifheit is Natural Gas Europe's New Media Specialist.