What Cuadrilla say fracking will look like
This morning shale gas explorer I-Gas told the BBC that there was a lot more gas in place under its license blocks than it previously thought.
See also:
Post-code searchable map of fracking licenses (with company details)
Infographic: Which companies have rights to drill in the UK
The news was a boost for the company’s shares. But what does it mean for those of us who aren’t shareholders?
Nobody doubts that there is a lot of oil and gas trapped in the rocks beneath the UK, the problem is the suggestion that any particular fraction if it can be gotten out. In fact this figure - the one that matters to UK consumers.
Fims, like I-Gas, tend to suggest that you can apply a rough percentage to work out how much is 'extractable' - generally taken from experience in the US and reduced slightly to appear 'conservative'.
But academics at Imperial have questioned the accuracy of this method which fails to take into account significant differences in politics, economics and geology of the UK and US shales.
Indeed, a report by the US society of petroleum engineers and quoted by Cuadrilla suggests that more than 50 wells are needed before any reasonable extraction estimate can be drawn,
If a comparison is to be used it may be that Poland, where so far no gas has proven extractable, rather than the US is an appropriate place to start.
The problem is that the gas in place is actually just one of many factors you need to examine to work out how much you can extract - and potentially not even the most important.
1. Rocks or.. clay
Fracking involves pumping water, chemicals and sand at high pressure into rocks so as to break them apart and release the gas trapped in-between.
This works well if the rock is highly permeable, the fracks are long and lots of gas flows. But if the rock has – for example – a very high clay content then it becomes more difficult.
Imagine trying to cause fractures in a lump of clay.
2. The Polish example
Shale gas firms like to point to the example of the US ‘shale gas revolution’, and indeed estimates of the extractable amount of gas tend to come from examples such as the US Marcellus shale.
But there are other examples. Poland was once seen as Europe’s shale goldmine with recoverable reserves estimated to be even larger than here but three US oil and gas giants – including Exxon – have quit the country after finding little extractable gas.
As one energy expert told the BBC, "Poland's shale gas exists only in the media, because in reality nothing happens.”
In the UK the major oil and gas companies have yet to be convinced it is even worth their time drilling exploratory wells – leaving the field open to the likes of I-Gas.
3. Cost of drilling
Much has been made of the fact that the UK’s shale reserves are both deeper and thicker than those in the US.
This could come with potential benefits. A recent report by the Institute of Directors for Cuadrilla claimed it would mean drilling fewer wells (more on that below).
But it also means you have to drill further to get to the gas. Drilling firm Schlumberger noted that in Poland drilling costs were three times that in the US, partly due to the deeper depths.
If applied to the UK that could make the cost of gas produced comparable to current prices.
4. Fault lines
Rocks also contain geological fault lines which are believed to be more common in the UK’s deeper and more condensed shale than in the US.
If fracking fluid enters the faults it allows the rocks to move. This is unlikely to cause any serious damage at the surface – perhaps akin to a heavy truck passing – but it will need examination to check for any wider impacts.
Indeed the Royal Society have proposed that fracking be suspended each time there is a tremor – potentially driving up the cost of drilling significantly, not to mention reducing production.
5. Surface impacts
Key to trying to work out how much gas can reasonably be extracted is understanding the likely surface impacts.
A study by the US geological survey has found that on average shale gas wells there bring up 1-2.6 billion cubic feet worth of gas, some more, some less.
If, as Miles Austin from I-Gas suggested the UK tried to recover 5% of the 500 trillion cubic feet he suggests is trapped beneath the ground that would involve almost 20,000 wells.
The Institute of Directors, in their report for Cuadrilla, suggested that the number of wells could be reduced by running multiple fracking operations from each well – at different depths in the shale.
However, not only is there barely any evidence of this taking place anywhere on the planet, but that also assumes that the shale is equally good at each depth, a geologically implausible supposition. Even in such a scenario you would need 5,000 wells spread across around 500 well pads. Drilling four so-called ‘laterals’ from each well is also extremely costly and would be a big financial risk for the firm.
Each ten well pad would need, according to the IOD’s analysis 6-17 trucks a day, to carry the fracking and waste fluid to and from the site. In the geologically unprecedented scenario that each pad had four times more wells, it would need four times more trucks. It would probably need whole new roads.
A Bloomberg study - Is shale all its fracked up to be - claims UK shale will be expensive and delayed by legal planning and environmental factors. It also says that to reach peak production of around1,460bcf, half of UK demand, would require between 10 and 20,000 wells.
But these wells can’t just be put where-ever is convenient. To maximise production they need to go in so-called ‘sweet spots’ otherwise you need to ‘frack’ so often and drill so far that the cost becomes prohibitive. If those sweet-spots don’t happen to be located in empty fields – there could be a problem.
None of which is to say there won’t be large-scale shale extraction in the UK.
Methods exist to get to a more accurate assesment, either by drilling wells or using an analogy with similar geology to the UK. Whether that is the US or Poland will be a key question.
But the issue firms need to deal with is not how much gas there may be in rocks deep beneath our feet, but rather, how do they plan to get it out at an affordable rate.
If they do answer that one suspects it won’t be I-gas telling us about the potential of shale, but Shell or Centrica telling us how much they plan to sell it for.
