Focus on fracking and unconventional oil and gas
In 2014 the UK stands at a crossroads with regards to hydraulic fracturing. It is important to understand the way the USA have explored and exploited their shale gas in order to inform our own decision making and avoid some of the possible oversights that can come with reacting too quickly to the seeming wealth hidden deep under our feet. As the price of gas generally looks set to rise, and with hydraulic fracturing itself being a more costly method to undertake, one should question to what extent the shale gas revolution will travel outside the USA and Europe. Some of the largest shale gas reserves are found in China and their entrance into the already highly competitive market could have a dramatic impact upon the energy economy.
Since the Roosecote Combined Cycle Gas Turbine Power Station in Cumbria opened in 1991, natural gas has been one of the primary energy sources for the UK (Centrica, 2014). While it is a non-renewable fossil fuel, which under combustion will produce greenhouse gases, it is seen as a relatively ‘clean’ option alongside oil and coal, producing just fifty six per cent of the carbon dioxide of the latter when burnt. Its use therefore in the UK energy mix has somewhat divided public opinion, finding advocates as well as opponents in environmental and industrial sectors. While primarily methane (CH4), is seen by some as having the potential to act as a stepping stone towards a global lower carbon economy. Others question whether the pursuit of new gas sources through methods such as hydraulic fracturing or ‘fracking’ is worth the value of the final product at all.
Up until 2006, most gas exploration had been aiming to tap ‘conventional gas’, and indeed where possible and economically viable, this practice continues. Conventional gas collects in reservoirs in minutely porous rocks, such as sandstone, allowing bore holes to be drilled directly into their midst and for the gas to be collected under pressure. Unconventional gas, (an umbrella term that includes shale gas) sits in rock that is virtually impermeable. While it is more abundant than conventional gas, it requires far greater expertise and more technical equipment to extract it through methods such as hydraulic fracturing.
Compared to other fossil fuel extraction methods, hydraulic fracking can be a relatively quick procedure. While it can take around twelve months in the UK to receive the right planning approval for such works, often less than five months after this point, a well can be bringing shale gas to the surface. Reservoirs of shale gas tend to sit at around 1.5 to 3km beneath the surface so a great deal of horizontal drilling is needed to reach the gas. Water is used in copious amounts at this stage, not only to cool the drill bit, but also to help bring spoil to the surface through steel and cement encased bore holes. Once the bore hole reaches the shale, vertical drilling takes place along multiple pathways, creating a network of routes through the shale rock. A ‘perforating gun’ (a portable device equipped with explosive charges) is lowered to the ends of each bore hole and detonated, creating minute holes (fractures) throughout the shale. A mixture of water, sand (to keep the fractures open) and chemicals (such as acids, lubricants and pH adjustors) are pumped down and the gas flows back up to the surface under pressure, before becoming part of the global gas supply chain. Gas produced from a single platform can last for up to forty years, making it for some companies, a good investment economically and for a nation’s energy security.
Infographic: Introducing natural Gas and Hydraulic Fracturing
Activities and Questions
Create a timeline of the fracking process and using highlighter pens code the line with potential areas of environmental concern and economic opportunity. Is there a pattern to where the different issues fall within the process?
Annotate a cross sectional diagram of the hydraulic fracturing process with impacts upon people (social), the economy and the environment.
Based on the information given in the infographic, create an impact assessment for the hydraulic fracturing process, using a bipolar score to show how viable it is as a source of energy.
Natural gas can be an expensive fuel to transport as its value to volume ratio is quite low. It is therefore of little surprise that on average seventy per cent of a producing nation’s gas is consumed domestically. Of that which is exported, the preferred (and cheaper method) is to do so through pipelines where the gas is compressed and moved under pressure via compressor stations en route. Sixty eight per cent of the world’s gas is transported this way, both across international boundaries, such as the Trans-Siberian Pipeline connecting western Russia with Ukraine, and within countries to our homes.
Where pipelines distances are too far to be cost effective, the remaining exported gas is cooled to a temperature of -160°C and shipped as Liquefied Natural Gas (LNG) – a form that takes up six hundred times less space and raises the value to volume ratio. While pipelines are still favoured across the European market, the Atlantic basin market and the Asia-Pacific basin market both rely on LNG for their transportation. Qatar, who is becoming an increasingly important player in the international trade of gas, is able to supply both the LNG basin markets. It is the USA however, because of hydraulic fracturing, who has become the largest producer of gas and so the prevalence of LNG on the market is increasing.
Decisions over the pricing of gas do not occur in the same manner as other fossil fuels. While many countries have long term, set price contracts with producers the price of North American and UK gas is determined through competitive quotes from different individual gas producers. Therefore there is no guarantee that hydraulic fracturing will actually lower UK gas prices. It also means that there is huge disparity between the gas prices in different countries. At the start of 2014, Japan was paying US$17 per Mmbtu (the standard measure for natural gas – see glossary) compared to US$10.4 per Mmbtu in the UK and US$2.8 per Mmbtu in the USA – more than six times less than that of Japan.
With the USA investing heavily in hydraulic fracturing it changed from being a net importer to a net exporter of gas in 2011. Millions of dollars is still being spent on converting the regasification terminals (needed for importing LNG) to liquefaction terminals (to allow its export). In a race for LNG export potential to be realised, Qatar increased its liquefaction capacity by eighty percent, creating an overabundance of LNG in the international market. This was met only by increased demands coming from Japan following the closure of the Fukushima nuclear power plants in the 2011 earthquake, demands which saw their import price nearly double.
In the meantime, the UK, unable to compete with Japan for the expensive gas, temporarily returned in 2014 to coal based electricity production. Gas power plants, such as at Keadby and Medway, lay idle and decision on new investments in gas based power production were shelved while complying with the EU Emissions Trading System became a somewhat distant memory. The EU Large Combustion Plant Directive however stipulates the number of operational hours over which coal fired power plants can be used, and with this running low, the UK’s energy security in 2014 rested on the price of Qatari gas dropping or on finding a new domestic supply: shale gas.
Infographic: The International Trade and Transport of Gas
With the benefit of hindsight, how would you have advised the UK government in the run up to 2014, to ensure long term energy security?
Research the nature of the pipelines that feed gas to Western Europe from Russia. How might geopolitics affect the UK gas supply through such pipelines?
Using data from the latest BP Statistical Review (link in Reference section) create a flow line diagram for the main trade links between gas producers and consumers on a blank world map, showing differences in pipeline and LNG trade. Then on a second copy produce the same map for fifteen years’ time. Describe and explain how your maps are different.
With the UK’s gas security somewhat hanging in the balance it is understandable that UK politicians would look towards the USA, where hydraulic fracturing has been undertaken for some time before committing fully to this method. The UK has been using its domestic reserves of North Sea gas so the prospect of using shale gas would at least provide a buffer for times of gas shortage and at best provide a new export fuel.
The first well drilled for the hydraulic fracturing of gas in the USA came in 1968, but drilling remained on such a small scale that no statistics were collected on the practice until 2006. From modest beginnings the USA is set to see a rapid growth in shale gas production which currently accounts for forty per cent of all US gas produced. Shale basins cover large sections of the USA with prominent well pads being found throughout Upshur County in Pennsylvania, Barnett in Texas and in Haynesville that crosses the Texas/Louisiana state line. The potential for UK shale gas could mirror this with over sixty per cent of the surface of the UK land falling under open licenses for potential shale gas extraction (DECC, 2014).
However concerns regarding our domestic energy security may be misguided. The completion in 1998 of a connector to Europe paved the way for the UK to export its gas to the continent, tipping it comfortably into becoming a net importer of gas in 2004 as domestic demand increased. While some may have concerns about this seeming insecurity, imports of gas to the UK come from a diverse set of suppliers and some will see investment in shale gas as an extension of this diversity, decreasing the risk of one supplier dominating over prices or simply running out.
Yet there is still a lot we do not know about the potential for shale gas in the UK. The ‘Proven Reserves’ of the fuel have not been identified with the British Geological Survey (2012) recognising that they are far off being able to make a reserve estimate, needing funding for a large scale drilling and exploration programme first. Each shale gas well is inherently unique and so their efficiency may be difficult to predict. With estimates for the number of drill pads needed to supply ten per cent of UK gas through hydraulic fracturing ranging from twenty five to 120 (IoD, 2013 and Royal Society, 2012), there are concerns about the level of investment needed to successfully exploit shale gas in the UK, alongside wider concerns from environmentalists.
Infographic: Can the UK mirror the USA's energy model for gas?
Research the location of the proposed Bowland Shale gas site. Why are conservationists so concerned about this site
Using ‘The equation for hydraulic fracturing success’ on the infographic, discuss with a peer or with your class which of the components are missing or too weak for successful hydraulic fracturing to begin in the UK.
Watch the 2010 trailer to the documentary ‘GasLand’ (link in Reference section). Gauge the extent to which public perception and media output has influenced our choices over energy policies.
Natural gas which is found in pockets of sandstone deep underground. This forms a ‘reservoir’ under an impermeable layer of earth and rock. As it is relatively easy to access, this form of gas is traditionally drilled first before more expensive forms are exploited.
Natural gas that does not ‘flow’ as easily as conventional gas due to its low permeability. It is sometimes known as ‘Shale Gas’ because it is trapped within the shale rock. It is usually accessed by hydraulic fracturing, which costs more and requires more technical knowledge.
The main constituent part of natural gas. It has the chemical formula CH4. It can be burnt as a fuel in a gas turbine power plant to produce electricity or burnt in homes for heat generation and cooking.
Million British Thermal Unit. This is a measure of energy equivalent to about 290 kWh. One is the equivalent of 28m2 of natural gas at a defined temperature and pressure.
A process by which unconventional natural gas can be extracted from shale. The process involves the creation of minute fissures through underground shale beds, into which a water, sand and chemical mixture is pumped. Gas is collected at the surface as it is released under pressure.
The process by which natural gas in a gaseous state is converted into a liquid by cooling it to -160°C. This enables it to be transported more easily and cost effectively as Liquefied Natural Gas (LNG).
The quantities of natural gas that can be recovered from known reserves assuming favourable economic and operating conditions continue. This data is used as a deciding factor for the possible commencement of hydraulic fracturing.
The process by which the temperature of Liquefied Natural Gas is slowly raised and thus converted back into a gaseous state upon arrival at its destination. These plants are usually located on land but floating barges that undertake the same process are used in some countries where port space is insufficient.
A fine grained, stratified sedimentary rock in which natural gas can be found underground. It can be broken into thin layers when machine actions are applied to it.
Describe how the pressures on a named resource may change in the future (4)
Describe how technology might solve the problem of resource shortages (4)
Describe and explain the considerations a country may have to make in order to utilise a new energy source (6)
Assess the extent to which shale gas is a viable solution to Europe’s energy security (12)
Explain why using technology as a ‘fix’ for declining resources may meet controversy (8)
For a named resource, describe how geopolitics may affect its trade and consumption (10)
British Geological Survey (2012)
GasLand Trailer (2010)
Institute of Directors (2013) Shale Gas Report
Royal Society (2012) Shale Gas Extraction in the UK Report
United Kingdom Onshore Oil and Gas (2014)
Unless otherwise stated, all data in the above piece relates to figures taken from Professor Mike Bradshaw’s lecture: Will the Shale Gale Prevail? (January 2014)
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