A lot of research has been done into the economic, community and environmental effects of shale gas development. Please take a look at the answers on this website for references to numerous pieces of research conducted by academics, public agencies and other institutions. We have summarised some of this material below for you.
According to the joint Royal Society and the Royal Academy of Engineering report, at the time the report was produced, the available evidence indicates that the risk of water contamination in the UK is very low provided that shale gas extraction takes place at depths of many hundreds of metres or several kilometres – which would be the case here1.
The Chartered Institution of Water and Environmental Management (CIWEM) also agrees that risks to groundwater quality are generally considered to be low in the UK where the shale rock in question often exists at considerable depths below aquifers - meaning that the gas would have to migrate many hundreds of metres between the source rock and overlaying aquifers.2
With regards to interaction between shale and overlaying aquifers, a study by the ReFINE (Researching Fracking in Europe) project found that there was a less than 1% chance of a stimulated hydraulic fracture propagating upwards more than 350 metres, and that the maximum recorded distance was 588 metres. This study recommended that all horizontal fracking wells are drilled at least 600m below aquifers to minimize the risk of stimulated hydraulic fractures providing a pathway for natural gas to migrate upwards and contaminate aquifers3.
Dr James Verdon of the University of Bristol said: “Multiple studies in the USA have confirmed that the hydraulic fracturing process itself has not caused contamination of aquifers. That’s not to say there have been zero accidents or incidents in the USA, but that on the few occasions that problems have been recorded, it’s been due to other drilling-related issues, and not due to fracking.”
There have been a few examples of water contamination in the US - a recent report from Ohio University found some instances of water contaminated with natural gas. However, this was caused by faulty wells, not by the hydraulic fracturing (“fracking”) process4. This indicates that water contamination can be prevented with strict regulation from Government and good well design and construction which in the UK is overseen by the Health and Safety Executive.
The environment and CO2
Natural gas from shale rock is the same as all natural gas. The only difference is that it is trapped in impermeable shale rock. Whilst burning shale gas to produce energy does cause CO2 emissions, a greenhouse gas, generating electricity from gas produces about half of the emissions of generating electricity from coal.5 Greenhouse gases contribute to climate change.
At present we get 40% of our electricity in this country from burning coal and we need to reduce this figure considerably in order to meet targets to reduce our impact on the environment. Although renewable sources of energy are, of course, cleaner than fossil fuels, they are currently expensive so even green campaigners, such as Stephen Tindale, support shale gas extraction as a way of helping this country make the transition to renewable energy. We should also remember that we will need a reliable energy source at times when the wind doesn’t blow and the sun doesn’t shine.
The United Nations’ Intergovernmental Panel on Climate Change (IPCC) Working Group 35th Assessment Report, published in April 2014 said that avoiding climate change will mean reducing coal use before reducing the use of gas. This is because generating electricity from gas produces about half of the emissions than generating electricity from coal. However, they concluded more research needs to be done on methane released into the atmosphere during shale gas extraction6.
The UK’s Committee on Climate Change, which advises the Government on meeting the country’s carbon reduction targets, has concluded:
“UK shale gas production would reduce our dependence on imports and help to meet the UK’s continued gas demand, for example in industry and for heat in buildings, even as we reduce consumption by improving energy efficiency and switching to low-carbon technologies.”7
The environment and methane
However, we also must consider the effects of shale gas escaping into the atmosphere when it is being extracted. Shale gas is mostly methane which is more harmful to the environment than CO2. According to the US Environmental Protection Agency “Pound for pound, the comparative impact of methane on climate change is over 20 times greater than CO2 over a 100-year period.”8
Therefore, to ensure the effect on the environment is minimised, it is very important that as much of the gas extracted as possible is used and that as little methane as possible escapes into the atmosphere. The government’s Department of Energy and Climate Change (DECC) insists that operators must minimise the release of gas into the atmosphere and, when gas can’t be economically used, it must be captured and “flared” to reduce its global warming emissions’.9 Beyond exploration, operators will have a commercial incentive not to flare gas, as the gas could otherwise be sold.
Finally, the shale gas industry in the UK is developing “green completion” based on industry best practice, to reduce the emissions of gases into the air, and this is emphasised in UKOOG’s “UK Onshore Shale Gas Well Guidelines”10. This involves using specialist equipment to collect and separate the initial flow of water, sand and gas, so the gas can be prevented from escaping. According to Professor David MacKay, (DECC’s Chief Scientific Advisor), and Dr Timothy Stone (the Senior Advisor to the Secretary of State), “green completions” should be adopted at all stages following exploration.11 According to the Government’s Department of Energy and Climate Change “Green completions and flaring can reduce methane emissions by as much as 95% versus venting straight into the atmosphere.”12
Professor Richard Selley from Imperial College London said: “The Government’s energy policy is to solve the ‘Trilemma’ for providing energy that is economic, that does least damage to the environment, and whose source is secure. It supports hydraulic fracturing for shale gas as part of a balanced mix of diverse energy sources, including nuclear and renewables. All 3 major parties support this solution to the energy trilemma.”
The environmental aspect that appears to have most relevance to health, as with many industrial processes, is the impact on air quality. Public Health England (part of the Department of Health) has completed a comprehensive review of the potential health impact of shale gas extraction. The review found that the potential risks to public health from exposure to the emissions associated with shale gas extraction will be low if the operations are properly run and regulated13. For this study and, in addition to the natural gas released in the process, they noted that that extraction will produce emissions because of the industrial processes on site such as engines to power drills and compressors to capture gas.
Many people believe that the primary advantage of producing natural gas from shale is that it means we will be less reliant on other countries for our energy and will create new jobs and industries.
Natural gas accounts for around 80% of the UK’s domestic and business heating needs14, with 83% of homes heated by this energy resource in 2013, so we must either import more or produce more of our own.15
Just 11 years ago (in 2003), the UK was actually a net exporter of gas. However, we are now importing more than we are exporting, which means we have to rely on other countries for our gas needs. The Department of Energy and Climate Change suggests that the UK will be importing nearly 70% of the gas we use by 2025, assuming we do not develop shale gas.16 John Williams, Senior Principal at Pöyry, a global consulting and engineering firm, told us that because the UK will still have a demand for gas in the future that if this gas is produced from shale then the requirements for imports will be reduced. He said, “this will have beneficial economic impacts in terms of balance of trade, job creation and increased GDP”.
With regards to investment and job creation, the Institute of Directors has produced calculations for a pad of 10 wells, each with four horizontal wells (laterals), which could heat a peak of 400,000 homes. In their model, the IoD assume that each lateral costs £6 million to drill, facility costs are £30 million and decommissioning costs are £40 million, with a total investment of just over £500 million – this includes operating expenditure, which is significant, and the cost of getting the gas to market.17 According to Ernst & Young (EY), £333 million of capital investment is required to bring a well-pad of this scale into operation.18 This investment will be made by companies without subsidy from taxpayers.
In addition to generating energy, the oil and gas sector provides significant tax revenues to fund public services. A PricewaterhouseCoopers (PwC) report, commissioned by Oil and Gas UK in 2011, estimated that the oil and gas sector was the UK’s largest corporation tax contributor with 16.4% of total Government corporation tax receipts. If the tax paid by companies in the supply chain is included, the figure is even higher.
The industry has committed to paying £100,000 to the local community living near to each exploratory well site where hydraulic fracturing takes place, together with a £20,000 community benefit payment per unique horizontal well over 200 metres in length and below 300 metres in depth. This will be paid by the operator, regardless of whether or not recoverable deposits are found. In addition, the industry has committed to paying communities 1% of the value of the shale gas that is produced – for a site of 40 horizontal wells, this could be worth £5-10 million in total. With regards to the long-term, it is also important to note that each well pad is temporary. Once a site has finished producing natural gas or oil it is then decommissioned in order to return the site to its original condition. This involves removing all of the surface equipment and making sure that the wells are safely cemented and capped. Typically, this process takes around six months to a year.
10 UKOOG, UK Onshore Shale Gas Well Guidelines http://www.ukoog.org.uk/images/ukoog/pdfs/ShaleGasWellGuidelines.pdf