Transcript State of play on shale gas in UK

Managing environmental risks
from shale gas exploration –
the UK’s experience so far
Dr Tony Grayling
Head of Climate Change and Communities
Environment Agency of England and Wales
Bulgarian Energy Forum
Sofia, 11-12 December 2012
Overview of presentation
Current situation in the UK
Environmental risks and regulation
Next steps
State of play on shale gas in UK
UK still at a very early stage: three wells drilled by
Cuadrilla in Lancashire, one partly ‘fracked’
Further fracking suspended for investigation of
two small earthquakes at first well
Independent review recommended fracking could
safely resume with strict monitoring and controls
Other holders of petroleum licences showing
interest, but have plans only for drilling
Too early to speculate on reserves or possible
production
UK Government perspective
Gas will continue to play a major role in UK
energy on a path to decarbonisation
If it can be shown to be economic and safe, UK
shale gas could offer a significant opportunity
Department of Energy and Climate Change
(DECC) will establish an Office of
Unconventional Gas and Oil
Treasury consulting on tax regime for future
production
Announcement on fracking expected shortly
Shale basins in Great Britain
Estimates of UK shale gas resource
BGS first
estimate
150 billion m3 gas (recoverable resource) in
Bowland shale – estimate made before any
exploration
US EIA
estimate
2,700 billion m3 gas in place in Bowland shale, of
which 540 billion m3 technically recoverable;
57 billion m3 gas in place in Weald/Wessex, of
which less than half is technically recoverable
Company 6,000 billion m3 overall estimate of gas in place
estimates for their concessions
(c.f. UK annual gas consumption 90 billion m3)
Current proposals for shale and coal bed
methane exploration in England and Wales
Five sites
in Lancashire Cuadrilla
Beverley
Rathlin Energy
Three sites in
South Wales,
Neath, Maesteg,
Llandow - Coastal
Oil and Gas Ltd.
Possibly three sites
Mendip Hills:
UK Methane and
Eden Energy
Balcombe,
W Sussex:
Cuadrilla
Woodnesborough,
Kent + others?
Coastal Oil and
Gas Ltd.
Public concerns
Shale gas drilling rig of
Cuadrilla Resources near
Blackpool. Photograph
Christopher Furlong/Getty
Images
Bath hot springs
concerns on
fracking proposal
GREEN Party leader
Caroline Lucas is
calling for licences for
hydraulic fracturing,
also known as
fracking, to be
withdrawn in the UK
Energy firm Cuadrilla
discovers huge gas
reserves under
Lancashire
theguardian
Regulatory authorities in Great Britain
Department of Energy and Climate Change
(DECC)
Environment Agency (England and Wales) (EA)
Scottish Environment Protection Agency (SEPA)
Health and Safety Executive (HSE)
Local Authorities (LA)
Regulation in Great Britain - exploration
DECC: award of exclusive Petroleum Exploration &
Development Licence after open competition
DECC: online well
Local Authority
EA/SEPA
application for
<96 hr testing
Planning Permission
Statutory
Consultee
HSE
DECC checks with
HSE/EA/SEPA
issues well consent
EA/SEPA
21 day
Notification/
Well integrity
•
•
•
Notices
Abstraction licences
Discharge & RSR permits
DECC: 90-day extended
Exploration
Well
well test (EWT), if required,
setting limit on hydrocarbons
produced, vented or flared.
Environmental risks of exploration
Impact on water
resources from
water used in
hydraulic fracturing
Clean water
Gas
emissions to
atmosphere
Fugitive
emissions of
methane
Well pad
Inadequate
transport or
processing of
produced gas
Storage
tanks
Inadequate
treatment/disposal
of drill cuttings
To river
or STW
Water Table
Inadequate
transport or
treatment of
waste waters
Possible
Aquifer
Confining
Layers
Contamination of
soil, surface or
groundwater due
to spills of
chemicals or
return fluids
Production
Zone
Contamination of
groundwater due to
poor well design or
failure
Contamination of
groundwater due to
mobilization of solutes
or methane
Environmental controls (England and Wales)
Risk
Controls
Groundwater
pollution
Water Framework Directive and Groundwater Daughter
Directive through the Water Resources Act and
Environmental Permitting Regulations (EPR): Regulate
discharges to groundwater, require disclosure of chemicals.
Borehole regulations (HSE) also protect the environment.
Surface spills
Planning regime for site construction standards. EPR
regulates discharges to surface water and groundwater.
Disposal of used Mining Waste Directive through EPR: Waste management
plan must be approved by the Environment Agency. Euratom
fracking fluid
Treaty if naturally occurring radioactive materials, via EPR.
Over abstraction Abstraction licensing under the Water Resources Act.
of water
Fugitive
methane
emissions
Mining Waste Directive through EPR. Conditions under
Petroleum Licences (DECC) for flaring and venting. Borehole
regulations (HSE).
Environment Agency position
All exploratory shale gas operations will require
environmental permits
Current regulation is adequate for small scale
exploration, but keeping under review
We are looking at ways to streamline the existing
permitting process
We continue to work closely with the UK and
Welsh governments and other regulators
Next steps for the Environment Agency
Publish our guidance note setting out our
approach to regulating exploratory activities
Determine permits for Cuadrilla sites in
Lancashire
Develop detailed technical guidance for
operators
Streamline and strengthen the permitting
process
Develop our position for full scale
development