Unconventional Gas UK: 12K Wells Would Be Good...

If the UK were to theoretically develop its unconventional resources, a report by Ricardo-AEA estimates that around 12,000 wells would be needed.

“I don't think that's very likely – more likely there will be between 600-3,000 wells by 2035,” said Dr. Mark Broomfield, Specialist Consultant, Ricardo-AEA, who was addressing delegates at the Unconventional Gas Aberdeen 2014 conference.

He said his organization had recently completed the study of the likely industry development of the unconventional hydrocarbon industry in the UK, looking at both shale gas and coal bed methane.

In terms of production, the consultancy estimates 1-10 billion cubic meters/year (by 2030), which could represent 1-10% of UK consumption. Dr. Broomfield contrasted this estimate with that of an Institute of Directors' report from 2013 whose mid-range forecast was 30 BCM/year.

“We're looking at a slow start but substantial investment over the coming years,” he said. “It does seem to me that a consensus is emerging of production of around 10-13 BCM in 15 years' time.”

Ricardo-AEA's report also looked at coal bed methane, estimating 200-1,000 wells by 2035. “I guess that seems plausible and Scotland are very much leading the way in that.”

In term's of his organization's environmental assessment work, he said it had done a study published by the European Commission in 2012, which had highlighted issues of concern, and rumpled some feathers as it had highlighted a number of issues of concern and how they could be dealt with.

“The Commission said, 'don't tell us what to do,' just tell us what the problem is,” he recalled.

Ricardo-AEA, he said, did a risk assessment of environmental risks of individual well development. “The key for any individual well is groundwater contamination – that's the number one risk; surface water contamination is also important, but that's really more to do with housekeeping and there are some fairly standard measures involved in control and management of surface spillage,” he explained, adding that well integrity was crucial.

He also highlighted “land take.”

“In order to develop the resources you might need 1.2-1.4% of the land area of a shale gas field to carry out the drilling and the fracturing,” said Dr. Broomfield. “Some of that land could then be returned to its former use perhaps.”

Because it was a relatively young industry, he noted that there wasn't much experience with the post abandonment phases of unconventional gas developments.

In their study, Ricardo-AEA looked at the key factors that might drive market opportunities in Scotland, looking at seven different countries as potential destinations for Scottish industry like the US.

“We also looked at Poland and concluded that it's not a particularly favorable opportunity for Scottish businesses, to do with the state control over the provision of shale gas services – that made it less favorable for foreign companies coming in,” he said.

While the UK might not have highest reserves of unconventional gas, he said the market was attractive for many aspects such as tax incentives, among others. “Accelerating growth is widely forecast and perhaps triggered by the 14th Onshore Licensing Round,” he said.

Dr. Bloomfield said they had also mapped out the supply chain and isolated where Scottish business had expertise and an established industry, like in seismic surveying.

Scottish businesses, he offered, were becoming active in the sector and that there was accelerating growth forecast for unconventional hydrocarbons markets to 2030. “And where else can you find that at the moment?” he asked.

Dr. Bloomfield concluded he thought peak production could be important in terms of its contribution to the UK gas supply, and there would be a range of opportunities for Scottish businesses that had transferable expertise.

Drew Leifheit is Natural Gas Europe's New Media Specialist.