Is shale gas a vital new fossil fuel resource or an environmental disaster in the making? John Barwise reports
Revolutionary drilling techniques developed in the US in the 1990s have started a shale gas bonanza that will deliver most of America’s gas for the rest of this century. South America, China, parts of North Africa and Europe all have significant shale gas reservoirs and could soon be using the new techniques to tap into previously unworkable gas resources.
Drilling for shale gas involves horizontal directional drilling combined with hydraulic fracturing (“fracking” or “hydrofracking”), which is particularly suited to opening up gas deposits that have been locked for millions of years in tightly bound shale rock formations. Fracking can also be undertaken vertically, and in the UK work has already started on the Bowland Shale formation in Lancashire using this method.
But evidence from America suggests fracking can damage local environments, pollute rivers and groundwater and create unnecessary risks to human health.
What lies below?
Shale is produced from the weathering and erosion of rocks, which create clays and silts to form sedimentary deposits. As more layers of sediment are added over time these become compacted. Some shales contain significant amounts of organic material that eventually break down to form natural gas or oil. Low-density shales allow the oil and gas to migrate upwards to be trapped in overlaying reservoir rock – these are known as conventional reservoirs and can be easily exploited.
Shale gas is natural gas trapped within tiny pore spaces of more compacted shales that cannot migrate. These source rocks are referred to as unconventional reservoirs and are much more difficult to exploit. In the 1990s, gas-drilling companies developed fracking techniques to liberate gas trapped in unconventional reservoirs and unlock some of the largest gas deposits in the world.
Fracking creates fractures in the shale to get the gas out of the ground. A mobile rig drills down vertically to the target layer or shale gas layers, which can be several thousand metres below ground. The technique enables the drill pipe to then curve gently to a horizontal position as it reaches the shale band.
Drilling then continues, creating a horizontal well through the shale band. Preparing for fracking requires both vertical and horizontal wells to be lined with alternate layers of metal sheathing and cement casing. The drilling process is completed using controlled explosions along the length of the pipe that open up fractures in the surrounding rock.
The actual fracking process involves pumping millions of gallons of water, sand and chemicals in solution under high pressure to open up the fractures. This releases the gas and allows it to flow back into the pipe more easily. Some of the wastewater returns to the drill head but most stays underground.
The new gold rush
The Barnett Shale play, in Texas, was the first major natural shale gas field to be exploited using hydraulic fracking techniques. The Barnett play extends over 15 counties with more than 5,000 wells which, according to the Bureau of Economic Geology at the University of Texas, compares favourably with the biggest of the oil booms of the early 20th century.
The exploitation of shale gas using fracking techniques has expanded rapidly across the US in what the New York Times (NYT) describes as the “new gold rush”. Historically, US natural gas reserves have been concentrated around Texas and the Gulf of Mexico. But with the recent advances in fracking, the number of states exploiting new shale gas-producing deposits has expanded rapidly, and includes New York State, Pennsylvania, Arkansas and Oklahoma, as well as Texas and Louisiana.
A US Department of Energy report on shale gas development states that recoverable resources could provide enough natural gas to supply the US for the next 90 years. A separate report from the American gas industry think-tank, Potential Gas Committee, says that the amount of natural gas in the US is 36% higher than in 2006 and that shale gas now comprises 33% of potential natural reserves.
The Marcellus Shale formation is the biggest of the shale plays in the US, extending from Tennessee in the south of the country, through Pennsylvania, all the way to New York State in the north. The Marcellus Shale is estimated to hold up to 365 trillion cubic feet of natural gas – enough to supply the nation’s gas needs for up to 15 years.
Fracking has revolutionised the US gas market and the country could become a significant net exporter rather than a net importer of natural gas in the near future.
Risky business
But the new dash for shale gas in the US is not without its risks to human health and the environment. The small town of Dimock in Pennsylvania was the centre of much media attention in 2010 because of water pollution problems believed to be caused by fracking.
A local aquifer that provided fresh water for the local community became contaminated and many residents became ill. One resident’s water well exploded and other wells had to be vented to prevent a dangerous build-up of methane gas. In a recent legal settlement, Cabot Oil and Gas Corp agreed to demands from the US Environmental Protection Agency (EPA) to pay $1.4 million in compensation to local residents affected by the pollution.
At the other end of the process, fracking produces millions of gallons of wastewater that can contain high concentrations of dissolved solids (salts), heavy metals and naturally occurring radionuclides – as well as other chemical pollutants used in the drilling process. Some wastewater is recycled, but much of it has to be disposed of at wastewater treatment works.
An investigation by the NYT reported that dangers to health and the environment from fracking are greater that previously understood. The newspaper claimed that a number of rivers and other waterways that serve public water systems have been contaminated by wastewater from drilling waste, because many sewage treatment plants are unable to cope with some of the high levels of pollution.
This is a particular worry because some treatment plants discharge into major river basins, which in turn provide drinking water. In 2010, the New York State Assembly voted for a six-month hold on fracking to allow the EPA time to conduct an assessment of the effects of the process on the environment and watersheds. Last October, Pennsylvania State governor, Edward Rendell, banned further natural gas development on state forest land, and in March this year the Maryland House of Representatives followed suit with its own moratorium on fracking of the Marcellus Shale in the western part of the state.
Lawsuits have been filed against a number of companies for drinking water contamination, well blowouts and gas leaks and for inadequate wastewater recycling. US investor groups are also worried about potential risks, and earlier this year filed shareholder resolutions with nine oil and gas companies pressing them to disclose plans for managing pollution, litigation and regulatory risks.
With public concerns growing, the EPA has embarked on a major $1.9 million two-year study to identify the potential impact of fracking on human health. But some states are already calling on the Federal government to tighten regulations on fracking.
In a 2010 report, Paul Stevens points out that the US Energy Policy Act 2005 exempts hydrofracking from the Safe Drinking Water Act 1974. To deal with this oversight, senators tabled the Fracturing Responsibility and Awareness of Chemicals Act, dubbed the FRAC Act, which was introduced to both chambers of the US Congress in June 2009.
It would have required energy companies to disclose the chemicals they use in the fracking process – which are currently protected as trade secrets. The Bill was opposed by the gas industry and failed to become law. It has been reintroduced in 2011, but not yet approved.
The UK picture
With growing concern in the US over the potential health and environmental impacts of fracking, gas companies are turning to Europe and its abundant shale gas reserves. Here in the UK, Cuadrilla Resources was the first company to drill for shale gas when it was given a licence to drill into the Bowland Shale formation. After exploratory drilling at its Preese Hall site in Westby, east of Blackpool, the UK-registered company confirmed the existence of gas in the shale formation more than 5,000 feet below ground.
After completing its exploratory work, Cuadrilla started vertical fracking at Preese Hall on 29 March. It was a cautious start, with fracking due to take place for a few hours at a time over a three-week period. That was the plan, but a minor earthquake on the Fylde coast a few days later, measuring 2.2 on the Richter scale, forced the company to temporarily halt the process. Despite the setback, Cuadrilla is confident the process is safe.
“We do a lot of testing on the front end, so we have tested groundwater, we have tested water from water wells and ponds, streams and soil samples, and we are even testing for things like radioactivity at outcrops. We are just trying to get a baseline of everything that is out there,” the company’s chief executive Mark Miller told the Energy and Climate Change Committee’s shale gas inquiry in March.
The Environment Agency has itself responded to growing concerns about the drilling and fracking operations. Tony Grayling, head of climate change and sustainable development at the agency, also spoke to the committee, telling it that the UK had a “robust” regulatory regime that was capable of regulating shale gas operations, including fracking.
Grayling added that, unlike the US, companies planning to use chemicals in fracking would have to declare them all to the agency and these would be placed on the public register. Wastewater from the well will be taken to treatment facilities capable of handling waste residues, he said.
But not everyone is convinced. Philip Mitchell, chair of the Blackpool and Fylde Green Party, is worried about independent monitoring. He said: “Measurements have been reported to have been taken, but press and industry statements, as well as comments by residents living close to the rigs, suggest that this monitoring has been done largely by the company, not by the regulators. I also wonder how much independent expert knowledge is held by those responsible for the public and the environment.”
A 2010 report from DECC estimates that the total UK shale gas reserve potential could be as large as 150 billion cubic metres. The Bowland formation offers the greatest potential but shale gas reservoirs have also been identified under the Weald Basin in the south of England, with other prospects in Scotland and Wales. Cuadrilla has permission to explore for natural gas at five onshore locations in Lancashire and is currently assembling an extensive exploration portfolio of shale gas in other parts of Europe.
Greater transparency
The Tyndall Centre for Climate Change Research recently carried out an assessment of both the risks and benefits of shale gas development in the UK and concluded that a precautionary approach to development is needed. The Tyndall Centre called for a moratorium on further development and to wait until the EPA produces its results from its fracking research programme in the US.
The government has rejected the call for a moratorium (something currently being debated in France), arguing that all onshore oil and gas projects, including shale gas exploration and development, are subject to a series of checks. But the Energy and Climate Change Committee has stepped in to criticise the government for not being more transparent on the policing of shale gas.
Committee chair, Tim Yeo, who had earlier said he didn’t believe there were any unacceptable risks, told DECC ministers: “The suspicion in the US of the environmental impacts of shale gas has been greatly increased by the reluctance of the companies, and in some cases the regulators, to disclose to the public what’s actually happening.”
All the evidence shows that there are significant reservoirs of shale gas in the UK and tapping into this resource would reduce dependency on imports. But the UK shale gas industry is still in its infancy and there is very little previous experience of shale hydrofracking here to demonstrate that the process is safe.
All eyes will be on the Environment Agency to see whether regulatory powers are sufficiently robust to ensure transparency of operations and, perhaps more importantly, whether procedures currently in place are suitable to deal with the potential environmental impacts and health effects if things go wrong.
