UK onshore oil and gas reserves are being wasted, industry says

Environmentalists oppose fracking and further use of fossil fuels, but industry says an opportunity is being missed

Peter Byrne/PA Wire Anti-fracking protestors gather
Anti-fracking protestors gather

Onshore oil and gas reserves in England could be at least five times greater than those off the coast of the British Isles so why aren’t we doing more to recover them?

Over the last 50 years the North Sea has yielded 40bn barrel of oil equivalent (boe) with around a further 20bn boe yet to be retrieved. It supports a huge industry employing 450,000 people and delivers billions of pounds to the national coffers.

But declining North Sea production volumes - down to 1.4m boe a day from 4m boe a day in the last 10 years – means we are now a net importer of gas, leading to growing concerns over energy security.

Earlier this month independent explorer UK Oil and Gas Investments (UKOG) announced it had found almost 100bn barrels of oil in the Horse Hill oilfield near Gatwick airport, Sussex.

In 2013 the British Geological Society estimated the Bowland Shale in northern England – stretching from Lancashire into Yorkshire - could hold as much as 1,300trn cubic feet (tcf) of gas – or 200bn boe.

UKOOG, the representative body for the UK onshore oil and gas industry, believes we need to switch our efforts onshore and do all we can to utilise these natural resources.

But environmentalists oppose the proposed method of recovering some of these reserves - hydraulic fracturing or fracking – and some want to see all further fossil fuels left in the ground.

The energy extracted from the North Sea powers and heats homes and business and acts as a vital feedstock to the process industry, being used in the manufacture of a wide assortment of items including; plastics, medicines and man-made fibres.

Ken Cronin, chief executive of UKOOG, said: “A lot of people do not realise what oil and gas is used for. Many tend to think of transport or electricity, where gas supplies almost one third of homes and businesses.

“But gas is vital to heating, it heats 84% of UK homes, and is a vital feedstock for the chemical and process industries, which employ 500,000 people in the UK and makes toothpaste, cosmetics and computer equipment.

“It is vitally important that we continue to develop our own gas resources for our own energy security. If not, we will be forced to buy it on the open market for a higher price.

“Alternatively, we may have to rely on less stable suppliers such as Russia. Germany, for example, gets 40% of its gas from Russia and while we have current little dependency this may not always be the case.

“As we import more gas we will be at the end of the European pipeline network and any problems in supply will have a knock-on effect leaving question marks over the security of our supplies.

“There needs to be a greater understanding of what we use gas for, and where we get it from. The reality is that if we do not secure our own supplies there is a threat to electricity supply, heating and industry.”

The UK has a long established history of onshore oil and gas exploration (see panel) but this pales in comparison to the United States where they have been using conventional methods to drill for oil and gas for over 150 years. In the last 10 years fracking has allowed explorers to tap into reserves that were previously inaccessible.

The recent Sussex find will primarily use conventional techniques but the Bowland shale will need to be fracked.

Despite hopes the UK could experience a similar boom to that in the US there has not been one well fracked in the UK in the last four years.

Mr Cronin said: “We had a moratorium for 18 months while the Government commissioned research into the safety of hydraulic fracturing. This was lifted with the Royal Society and others saying it is safe.”

He said it has taken some time for the companies to get their plans together, but said there two major planning applications being brought forward. One of these for Cuadrilla in Lancashire will now be heard in June and Mr Cronin says there would be more coming forward this year and next, in a handful of locations across the country.

Liam Herringshaw, a postdoctoral researcher in Earth Sciences at Durham University, says England has a ‘lot of onshore oil and gas’ but more testing needs to be done to determine whether these resource estimates could be translated into actual reserves.

“Big questions remain on the numbers that have been claimed. We have very limited information and we need more borehole data.

“While there is a lot of potential there are still lots of uncertainties and the actual amount of reserves that can be recovered may be low,” he said.

UKOOG has already distanced itself from its earlier claims for the Horse Hill oilfield, which which were extrapolated from one well in a radius of one square mile.

Mr Herringshaw believes that a lack of infrastructure – with only a few drilling rigs in the UK - may further limit the scaling of an industry.

However Mr Cronin said a recent report it produced with business advisors EY demonstrates the potential of the shale gas industry, which could support a £33bn supply chain and over 64,000 jobs.

He highlighted how 19 conventional onshore wells were drilled in 2014 and there are 250 sites in the UK which currently produce oil and gas. The Government is supporting the industry and last year announced the creation of a national oil and gas college.

While fracking is now conducted on an industrial scale in the US, the technique has been in use for years. Falkirk, in Scotland, was the first site of a fractured UK well almost 50 years ago and there have been a further 200 in the UK since.

A shale pad is normally around the size of the square on a cricket pitch and in the States these can be found in urban settings, such as hotel car parks, but the wide open spaces of Bakken shale play in North Dakota, or the Eagle Ford in Texas make the industry relatively unobtrusive.

Herein lays one of the main objections to the development of an English industry - nimbyism. In an effort to garner local support UKOOG and shale companies have agreed that each pilot exploration site will have £100,000 made available for the benefit of the local community.

Mr Cronin said: “We have a long history of onshore drilling in the UK which has taken place on council estates, in the city of Glasgow, on sites of Special Scientific Interest and nature reserves.

“While there will always be the problem of mobile protestors, this is not the reality. Most people just want to be given information.”

Mr Cronin says all the evidence show fracking is safe as Durham University’s ReFINE project is demonstrating (see panel) and that it is ‘disingenuous to the general public to continually bring up these scare stories’.

But Simon Bowens, North East and Yorkshire regional campaign coordinator for Friends of the Earth, questioned the safety of fracking and its environmental impact, nuisance and visual intrusion.

He added: “We know there are strong concerns over the potential risks to local communities -the traffic movements, the waste water and the chemicals need to frack. In many areas the right level of infrastructure is just not in place.”

A further objection of the environmental lobby is the contribution of fossil fuels to climate change. Many want to see an end to all oil and gas exploration.

Mr Bowens said: “We should be focusing our efforts on eliminating the use of fossil fuels by 2030 and shifting to renewables. We will need some gas for industry beyond that but we should step up efforts to improve energy efficiency and tap into other forms of heating such as air and ground source heat pumps.”

Mr Cronin said: “We need more renewables and we should be aim decarbonise power generation by deploying nuclear as the baseload power.

“I believe there is a middle road we should be able to travel with the green lobby, but the reality is that we will need gas for at least the next 50 years and we should be doing all we can to secure our own supplies, create jobs and boost the economy at the same time.”

Rich in natural resources

The UK is rich in fossil fuel whose formation date back over 300m years ago – during the carboniferous period – when the UK land mass resembled a tropical rainforest

Over the millenniums plant life in lower lying and submerged areas decayed into oil and gas whilst trees in the upland areas - such as the North East – morphed in to coal.

The first onshore UK oil well was drilled in Scotland in 1851 and the first oil in England was discovered in 1919 in Derbyshire.

Following the oil price shock of the early 1970s greater interest was taken in securing indigenous resources both onshore and offshore.

Around 2,000 wells have now been drilled onshore in the UK with about 10% of these being hydraulically fractured.

In the UK today, there are 120 onshore sites with 250 operating wells producing between 20,000 and 25,000 barrels of oil equivalent a day.

While the North East has bountiful coal reserves, that is not the case with shale oil and gas.

Nigel Smith, a geologist at the British Geological Survey (BGS), says there is potential in many sites across the UK including stretches of territory in North Northumberland and another straddling the Pennines in Northumberland.

He says these Northumberland shales are found in thinner seams and offer “riskier” plays for exploration companies.

Is fracking safe?

The UK onshore oil and gas industry is one of the heaviest regulated industries in the UK. There are four layers of oversight provided by the Environment Agency, the Health and Safety Executive, the Mineral Planning Authorities and by The Department of Energy and Climate Change.

The industry currently has to comply with 17 European Directives, has to apply for up to nine separate environmental permits and has to reach binding agreements on noise, hours of operation and other local social issues.

Leading UK bodies have said a well-regulated industry will have little impact on the environment, these include; The Royal Society, the British Geological Society, the British Geological Survey, WaterUK, the Chartered Institute of Water and Environmental Management (CIWEM), Public Health England and Durham University.

Researchers at Durham University are currently leading the biggest European-wide project of its kind into the risks associated with fracking for shale oil and gas.

In partnership with other national and international bodies, including Newcastle University, its ReFINE (Researching Fracking in Europe) project aims to create a library of independent research to help inform public awareness of the relative risks associated with the industry.

To date ReFINE has published papers on the risks of water contamination and earthquakes, with further papers coming on well integrity, disposal of fracking fluid and gas emissions.

Its findings say the size and number of felt earthquakes caused by fracking is low compared to other manmade triggers such as mining, geothermal activity or reservoir water storage.

It went on to say the energy released in a fracking event is usually ‘roughly equivalent to, or even less than, someone jumping off a ladder onto the floor’.

The ReFINE research has concluded that it is ‘incredibly unlikely’ that fracking at depths of 2km to 3km below the surface, where most operations take place, would lead to the contamination of the shallow water aquifers which lie above the gas resources.

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