Spotlight on UK shale gas

Shale gas is a natural gas deposit in which the shale acts as both the source and the reservoir for the gas within the formations. It is classified as an unconventional gas alongside other gases such as coalbed methane (CBM) and methane hydrates.

Significant advances in the use of horizontal drilling and well stimulation technologies have led to a rapid rise in the production of natural gas from shale formations - particularly in the US - over recent years.

US production of shale gas rose from 1.4% of total gas supply in 1990 to 14.3% in 2009. Moreover, one consultancy forecasts that unconventional gas production in the US will increase from 42% of total gas production in 2007 to 64% in 2020.

The US expansion has sparked interest in the UK’s shale gas resources, though there are, as yet, no commercial shale developments, and while there are abundant shale sources at depth, its distribution is still not well charted.

In a report to the UK government’s recently opened ’Shale Gas’ inquiry, the Department of Energy and Climate Change (DECC) said UK shale gas production could reach around 150bcm (billion cubic metres) of gas (900 million barrels of oil equivalent). This compares with the UK’s overall remaining conventional oil and gas reserves, including offshore, of some 20 billion barrels.

The DECC, however, cautioned that the commercial success of shale gas and CBM in the US might not be transferable to the different geological and other conditions of the UK. Estimates of reserves, it noted, depend on the number of wells drilled, the success of the fracture stimulation that is required and the scale of horizontal drilling.

Geologically, the most active UK areas for shale gas exploration are in the Lancashire basin, which could potentially yield up to 133bcm of shale gas, according to the DECC.

UK planning and environmental issues could, however, make it difficult to match the drilling density achieved in the US. A further disincentive could be that, unlike some other countries where landowners own the oil and gas under their land, in the UK the Crown controls the right to produce hydrocarbons.

There is starting to be interest in the investigation of UK shale deposits, with at least three companies known to be active

Despite the guarded outlook, there is starting to be interest in investigating UK shale deposits, with at least three companies active: Cuadrilla Resources, IGas Energy and Composite Energy.

Cuadrilla Resources is carrying out exploratory drilling for shale gas in Preston, Lancashire, and has said it believes there could be enough gas in that region to supply about 10% of the UK’s future needs.

Composite Energy, based in Stirling, Scotland, says it is working to establish approaches to shale operations in the UK, while IGas is employing consultants to review the hydrocarbon potential of the shale resources it has identified in its exploration portfolio.

However, these efforts have drawn fire from environmentalists.

Shale gas production requires the use of horizontal drilling and hydraulic fracturing. Several wells are typically clustered on “multi-well” pads, with horizontal drilling from each well and multi-stage fracturing using “slick water”, water containing sand and around 2% of chemical additives.

Horizontal drilling commences after vertical drilling has continued for distances, typically, up to 150 metres. Vertical drilling will use either compressed air or fresh water mud as the drilling fluid; horizontal drilling equipment will use drilling mud.

The last step prior to fracturing is installation of a wellhead, known as a frac tree - a mechanism for pumping and controlling fluid pressure and which incorporates equipment, such as pipes and manifolds, to handle the flowback of fracturing fluid. It is connected to a gas-water separator and tanks.

Large quantities of water and chemical additives are required in a multi-stage fracturing operation. In theory up to 80% of these can be recovered, but experience in Pennsylvania has been significantly below this: between 9% and 35%.

Contamination risk
A recent report from the UK-based Tyndall Centre claimed that the fracking process presented a risk of ground- and surface-water contamination, both from the gas and the chemicals used.

The report says that 58 out of the 260 chemicals held in large quantities by shale gas operators in New York State are potentially toxic, carcinogenic or mutagenic. Drilling, it claims, could lead to the chemicals entering underground aquifers that provide drinking water.

Doubts over the safety of fracking are disputed by Cuadrilla Resources. It cites the extensive use of the technique in the US for many years and says it has a number of procedures and processes in place to prevent problems of contamination arising. These include installation of an impermeable ground layer under the drilling site, the use of drilling mud to hold back the well’s pressure, and casings to line wells at their top and bottom to ensure they are securely sealed.

Mark Miller, chief executive at Cuadrilla Resources, said problems extracting shale gas are very rare and that his company’s work is using the best technology available to the industry.

Meanwhile, a DECC spokeswoman is quoted as saying that shale gas is an attractive commodity. “We support industry’s endeavours in pursuing such energy sources,” she said, “provided that tapping of such resources proves to be economically, commercially and environmentally viable.”