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UK Fracking Briefing Report

April 2014
Contents
Executive Summary................................................................................................................................. 1
What is fracking?..................................................................................................................................... 2
Why has it hit the headlines now?.......................................................................................................... 2
Points of contention................................................................................................................................ 3
Geology and Geography ..................................................................................................................... 3
Economics ........................................................................................................................................... 4
Sustainability ....................................................................................................................................... 5
Immediate Environmental Impact ...................................................................................................... 7
Conclusion ............................................................................................................................................... 8
Bibliography ............................................................................................................................................ 9

Executive Summary
Hydraulic fracturing exploration for shale gas is currently picking up pace in the UK. Shale fracking is
a contentious issue which relates directly to the Low Carbon Hubs work with community-owned
renewable energy, and therefore this briefing has been compiled to establish our position on the
environmental and social implications of fracking.
The briefing reviews the process and history of fracking, and the economic and environmental
debates around its adoption in the United Kingdom.
Hydraulic fracturing was first undertaken in North America in the 1940s, and has been used for
industrial extraction of conventional hydrocarbons in the UK for around forty years. Fracking for
unconventional shale gas became economically attractive in the early 21st century, and was first
explored in the UK in 2007. Since 2013, the UK government have publicly encouraged fracking with
financial and regulatory incentives, but progress has been slow due to public opposition, complex
planning procedures and the need for further economic and geological research. The UK is thought
to have promising shale reserves, although the extent to which they can be successfully extracted is
uncertain.
A number of factors, including global and European market projections indicate that extracting UK
shale gas is unlikely to reduce domestic gas prices. There may be local economic benefit through
direct employment, as well as through proposed tax breaks and subsidies for local authorities. Low
Carbon Hub calculate that the community economic benefit offered by fracking subsidies is far
below the socio-economic cost of greenhouse gas emissions.
Shale gas has the potential to reduce UK carbon emissions, with a slightly higher carbon footprint
than conventional gas- around half that of coal. However, pursuing shale gas in the UK could still
jeopardise global climate change targets, contributing substantially to global emissions and simply
displacing coal use to other countries.
Copyright 2014. Low Carbon Hub Community Interest Company. Registration number: 7583663. All rights reserved.

The briefing also highlights immediate environmental concerns of fracking, including induced seismic
activity and water contamination. If industry is strictly managed, these risks could be minimised.
However, current European regulation is non-binding and it is uncertain whether industry would
voluntarily adopt expensive best practice principles.
Low Carbon Hub conclude that fracking is a short-term, transition resource which will only delay the
necessary implementation of a whole-system change to decentralised renewables. We believe that
~75% of remaining fossil reserves should stay in the ground, and as such would only be able to
support anything on fracking if safety concerns were allayed; CCS was made mandatory; and there
was a strong link between the exploitation of that resource and the use of revenues from it to speed
up deployment of renewables, reduction of electricity demand and development of a national Smart
Grid.

What is fracking?
Hydraulic fracturing or fracking is the process of
fracturing rock using high pressure liquid, in order to
release natural gases and oils. This slickwater
liquid, usually water mixed with sand and chemicals
to increase friction, is forced into a wellbore to
create fractures in the rock surrounding it. These
fractures are typically less than 1mm in width, and
stimulate the flow of gas and oils into the wellbore.
Once hydraulic pressure is removed they are held
open by grains of sand or aluminium oxide. Within a
few weeks or months, between 30-70% of the
pressurised slickwater returns to the surface with
the gas or oil. The return of any remaining liquid
(formation water) and further migration of
hydrocarbons will gradually continue, long after the
well is commercially viable (Arthur et al. 2008, p. 21;
Durand 2012).

Figure 1. Diagram of fracking process (BBC 2013a)

Why has it hit the headlines now?


The first hydraulic fracturing was undertaken in North America in the 1940s, and small-scale
fracturing techniques have been used globally for several decades in the extraction of conventional
oil and gas in sandstone or limestone reservoirs. The shallow depth and permeable nature of these
reservoirs means that hydrocarbons are easily extracted and fracturing is not necessary, though it
can be used to increase extraction speeds. In the UK, small-scale fracking close to the wellbore has
been used in North Sea gas and oil fields from the 1970s, and in onshore conventional hydrocarbon
wells since the 1980s. A 2010 report estimated that 60% of all new oil and gas wells worldwide were
being hydraulically fractured (Montgomery & Smith 2010).
The current debate around fracking relates to shale or unconventional gas which, like conventional
gas, is mostly methane- the gas used for electricity generation, cooking and heating. Shale gas is
found within shale rock formations. Extraction is ~75% less efficient than conventional gas as shale is
found at greater depth, and its geological structure does not allow gas to flow as freely as in
conventional gas reserves (White et al. 2014, p. 5). Due to the rock depth and structure, stimulating
shale gas flow requires hydraulic fracturing on a much larger scale and at higher pressures than
conventional drilling. Shale gas fracking made slow progress until the early 21st century when
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declining conventional gas reserves and horizontal drilling innovations (branching out to multiple
underground pads from one well) made it more economically viable (Brooks 2013, p. 38). Shale wells
have a relatively short lifespan of 5-20 years, and yield productivity decreases with each fracking
(King n.d.).
Fracking hit the British headlines in 2007 when Cuadrilla Resources Ltd. was given a license to
explore shale fracking along the Lancashire coast. Two earth tremors associated with their first
fracking attempts in March 2011 resulted in a temporary moratorium on fracking. This was lifted in
December 2012, and the UK government have since been firmly supportive of fracking development,
establishing industry tax incentives and an Office of Unconventional Gas and Oil (BBC 2013b).
Cuadrilla began test drilling in Balcombe in mid-2013 but were stalled by public opposition (Frackoff.org 2014a). Currently, a number of companies are applying for exploratory drilling permissions
across the UK, including Cuadrilla and Celtique Energie (Scott-Delany 2013; Gosden 2014). However,
due to lengthy permissions procedures, discussed further below, it is unlikely that commercial
drilling would commence before 2019 (Pyry 2014, p. 4).
Public opposition to fracking has also featured heavily in the media, with a number of anti-fracking
groups demonstrating throughout the UK (Frack-off.org 2014b). High profile protestors include
Vivienne Westwood and Caroline Lucas, the latter being arrested at a fracking protest in Balcombe in
August 2013 (Sowray 2014; Siddique 2014).

Points of contention
Geology and Geography
Estimates of shale gas resources and reserves vary substantially, due to the difficulty of predicting
technically and commercially viable extraction yields1. Typically less than 10% of shale gas resource is
actually recoverable and even excellent shale reserves, such as those in Poland, can yield surprisingly
poor results (Brooks 2013, p. 40).
The International Energy Agency (IEA) estimate that global technically recoverable resource (TRR) of
shale gas is ~97 trillion m3, just under a quarter of the amount of remaining TRR conventional gas.
Only ~3% of this global TRR is situated in Europe, much of which may be difficult to reach due to high
population density (White et al. 2014, p. 5; Williams et al. 2011 p. 13). It has been estimated that this
could supply 2%-10% of North West European gas demand by 2030; small in comparison to the US
which is forecast to meet 50% of its own demand by the same date (Williams et al. 2011, pp. 13-15).
The British Geological Surveys National Baseline Survey of Methane, and their 2013 report on the
Bowland Shale show that Britain has promising shale gas resources, especially in the Southern and
Eastern regions. Current annual UK gas demand is 77 billion m3 (White et al. 2014, p. 4), and its
been estimated that UK reserves could meet 10% of UK demand for a 15 year period (Williams et al.
2011, p. 35). An average fracking site would contain around ten wells over two hectares (IoD 2013).
240 such sites will be needed to counter declines in conventional North Sea gas production
(Liebreich 2012), and smaller test wells are projected to number into the hundreds (Pyry 2014).
However, the potential of shale gas to be successfully extracted is currently unknown.

Note on terminology. Total Resources: the estimated total volume of oil and gas physically contained in
the rock. One measure of total resources used commonly, including by the BGS, is the Gas in Place (GIP) which
is an estimate of the total amount of gas that is trapped within the shale rock. Reserves: the amount of
resources that are deemed to be technically and commercially recoverable. Technically Recoverable Resource
(TRR): the estimated volume of gas that it is possible to extract from the total resource if not constrained by
economics (and therefore larger than the reserves estimates). (White et al. 2014, p. 3)

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Economics
The United States are held up as the model for economically successful fracking, with shale gas now
being cheaper and more widely used than coal. However, the global gas market is unlikely to follow
the American trend, with the International Energy Agency forecasting twofold price increases within
the next 20 years, which will probably lead to rising use of cheap coal (Brooks 2013, p. 39).
There has been widespread agreement that UK fracking is unlikely to reduce domestic gas prices,
given that UK gas prices are strictly regulated by European gas markets (BNEF 2013). Furthermore,
the UK is lacking several factors that made American fracking economically attractive, such as:
extensive government research, a well-developed onshore drilling industry, low population density;,
simple regulations, and the extraction other valuable hydrocarbons as shale by-products (Stevens
2013). A low tax rate of 30% has been offered to incentivise the industry (62-80% is a typical tax rate
for conventional oil fields) (Macalister & Harvey 2013).
2011 and 2013 reports from the Energy and Climate Change Select Committee (ECCC) concluded
that it would be wrong to assume that prices would come down as a result of domestic or foreign
shale gas, and there has also been concern that without government intervention in the domestic
market, fracked UK gas may be exported abroad for higher prices (Stevens 2013). Ed Davey has
stated that North Sea gas didnt significantly move UK prices- so we cant expect UK shale
production alone to have any effect (Davey 2013). Research from the Committee on Climate Change
(CCC 2012) and the International Energy Agency (IEA 2014) suggests that renewable and low-carbon
energy pathways would be more cost-effective, with the costs of decarbonisation being outweighed
by savings in fuel costs (see Fig. 2). 2

Figure 2. Annual cost savings from investment in a low-carbon strategy (CCC 2012)

Figure 2 notes: Low-carbon strategy decarbonises to around 40 gCO2/kWh by 2030. Scenario with investment in
predominantly gas achieves 130g CO2/kWh by 2030. Both scenarios achieve at least 30% renewable generation by 2020
and assume technology policy continues to support minimum levels of offshore wind and CCS in the 2020s. Negative values
imply a cost penalty from investing in low-carbon, while positive values imply a cost saving. NPV = Net Present
Value, discounted at 3.5%. Low and Central gas price worlds as in DECC (October 2011) Fossil Fuel Price Projections. (CCC
2012)

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Fracking could benefit the local economy through direct employment and through government
financial incentives.
Direct local employment benefit from fracking looks set to be relatively small. Specialist supply
chains are not yet locally established so many jobs are outsourced, and profits from hydrocarbons
are state-owned, rather than landowner property as in the US. Cuadrilla estimated that only 15% of
jobs from their Lancashire fracking exploration were contracted locally, and that a third of their
expenditure went overseas (Regeneris Consulting for Cuadrilla 2011). Estimates of local employment
prospects as fracking develops vary from ~5000 to ~70,000 full-time jobs (IoD 2013).
In January 2014, it was announced that local authorities would receive tax breaks which entitled
them to 100% of business rates raised from fracking sites, double the usual rate collected (Watt
2013). The same level of subsidy also applies to renewable energy projects. Alongside this, fracking
companies have also suggested a package of 100,000 plus 1% production site revenues (~5m10m over the lifetime of a site) as an incentive for communities in fracked areas (DECC 2013b, p. 8).
The United Kingdom Onshore Operators Group have put together a Community Engagement Charter
(appended to this brief) which outlines financial and regulatory benefits in more detail (United
Kingdom Onshore Operators Group 2013). Low Carbon Hub have calculated that these community
benefits equate to ~1.20 per tonne of CO2 emitted (see Fig. 3). This is far below the social costs of
greenhouse gas emissions as calculated by Cambridge University researchers: CO2 at $100/tonne
and methane at $1200/tonne (Macalister 2014; Hope 2007).
Description

Ref

Source or calc.
1

Amount

Potential community benefit per project (1% of revenues)

[a]

Sourced

Project revenues (100x comm benefit)

[b]

= [a] x 100

1,000,000,000

Wholesale rate of gas per therm

[c]

Sourced 2

0.65

[d]

= [b] / [c]

1,538,461,538

[e]

Sourced

Kg CO2 for the project

[f]

= [d] x [e]

8,298,784,615

Kg of CO2 per 1 community benefit

[g]

= [f] / [a]

830

Amount of community benefit per tonne of CO2

[g]

= 1000 x [a] / [f]

1.20

Project therms produced


Kg CO2 per therm for natural gas

10,000,000

5.3942

Guardian article, 14.1.14

http://www.theguardian.com/politics/2014/jan/14/fracking-opponents-irrational-says-david-cameron
2

Ice Endex, accessed online 14.1.14

http://www.iceendex.com
3

Carbon Trust, accessed online 14.1.14

http://www.carbontrust.com/resources/guides/carbon-footprinting-and-reporting/conversion-factors
Figure 3.Community benefit fracking subsidy per tonne of CO2 emitted.

Sustainability
Carbon footprint
Shale gas is generally found to have between 40-50% less emissions than coal, based on methanes
100 year Global Warming Potential of 25 (Forster & Perks 2013, p. iv). The gas which escapes during
shale oil extraction means it has additional fugitive emissions beyond its combustion (DECC 2013, p.
26). Opinions are divided on the exact amounts of fugitive emissions, as shown in Fig. 3 from a
report commissioned by European Commission Directorate-General for Climate Action. Gas leakage
from UK fracking will be monitored and added to carbon budgets (DECC 2013, p. 27).
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The European Commission report also compares shale GHG emissions with other fossil fuels (Fig. 4),
and concurs with a DECC commission report in concluding that best practice shale gas emissions
(flaring or capturing escaped gas) are slightly higher than conventional gas (MacKay & Stone 2013;
Forster & Perks 2013). In the most efficient scenario, shale emission are 1-5% higher than
conventional gas, and in the least efficient scenario (venting escaped gas) fracked shale gas has up to
10% higher emissions- a similar carbon footprint to importing conventional gas from Russia.
Consideration of other production emissions, such as the large number of HGV journeys involved
with fracking (16-51/day per site for the first three years of drilling) would increase these carbon
footprint estimates (DECC & Amec 2013, xvi).

Figure 4. Comparison of lifecycle GHG emissions from pre-production stages for shale gas from AEA European
Commission study and others (Forster & Perks 2013, p. 64).

Figure 4. Lifecycle emissions from coal and gas fired electricity generation (Forster & Perks 2013, p. 68).

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The American success with fracking might suggest that shale gas can offer a cleaner and more
economical replacement for coal, as well as increasing national energy independence. Growing use
of fracked oil in the US has directly resulted in the countrys emissions dropping ~4.5% since 2005
(Brooks 2013, p.37). However, global coal use is actually on the rise and the New Scientist suggests
coal could surpass oil as the worlds primary source of fuel as early as 2017. Currently, the surplus of
American coal is simply being burnt elsewhere, over 70% of it in Europe. Where coal is projected to
be cheaper than gas, for example China (despite its huge shale reserves), it looks set to be the fuel of
choice; emissions will come in addition to coal, not instead of them (Brooks 2013, p. 41).
DECC states that fracked gas will be used as a bridge in our transition to a green future in
conjunction with CCS, nuclear and renewables. As gas power stations are economical and fast to
build, they will provid[e] flexibility to help balance out increasing amounts of relatively inflexible
and intermittent low carbon capacity (DECC 2013, 31). However, using fracked gas as a bridge fuel
may compete with renewable energy infrastructure and investment, and would still contribute
substantially to global emissions. Known global shale gas reserves total five times as much fossil fuel
as could be burnt by 2050 and keep global warming below 2C (Carbon Tracker Initiative 2012). A
report from the Tyndall Centre for Climate Change Research argues that [if] the UK Government is
to respect its obligations under both the Copenhagen Accord and Low Carbon Transition Plan, shale
gas offers no meaningful potential as even a transition fuel (Broderick et al. 2011, p. 7).
Water
Estimates for water use per well fracking vary: a few thousand to 20,000 m3 (IEA 2012, p. 27);
10,000 to 30,000 m3 (DECC 2013, p. 9); 10,000m3 to 35,000m3 (NYSDEC 2011, p. 8). As wells age,
their productivity decreases, requiring more water input for less gas output. UK fracking will derive
water from local suppliers or directly from the ground. The RS and RAE recommend implementation
of water recycling measures. DECC has no clear strategy for fracking water management and defers
responsibility to water companies who produce water resource plans every 5 years (DECC 2013, pp.
8-13).

Immediate Environmental Impact


Induced seismic activity
A number of studies have linked fracking with increased seismic activity in the US (Kim 2013; Holland
2011; Ellsworth 2013) and in the UK, Caudrillas first fracking explorations in 2011 directly resulted in
seismic disruption. The tremors at Cuadrillas fracking site in Lancashire were caused by fracking fluid
accidentally spreading to an unknown existing fault plane. The largest resulting earthquake was
detectable on the ground (2.3 on the seismic scale3) and slightly dislodged the borewell casing,
though not enough to allow leakage. Cuadrillas report on the incident states that in the worst case,
the fluid could migrate upwards along a potential fault plane by 2,000 ft. (Dr. C.J. de Pater & Baisch
2011, p. v). This has caused concerns about water contamination and the unknown consequences of
interfering with natural faults (Gasdrillinginbalcombe.wordpress.com 2012).
DECC commissioned the Royal Academy of Engineering and the Royal Society to review fracking
safety, following these tremors. They concluded that risks can be managed effectively in the UK as
long as operational best practices are implemented and enforced (RS & RAE 2012, p. 4). DECC
argues that risk of future earthquakes will be mitigated through detailed geological assessment and
seismic activity monitoring prior to and during fracking activity (DECC 2013, pp. 22-25).
Water Contamination
3

Seismic activity of 2.02.9 is described by Richter scale as: [f]elt slightly by some people. No damage to
buildings. Magnitudes of up to 4 occur on average every 3-4 years in the UK (RS & RAE 2012, p. 40).

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There are several documented examples of US water contamination from harmful chemicals and
high salinity levels in flowback and formation (Warner et al. 2013; Ikeda 2013). In a number of cases,
companies did not know the exact compounds they were using (Waxman et al. 2011). The US EPA
are currently completing the final draft of report on Potential Impacts of Hydraulic Fracturing on
Drinking Water Resources, which will compile water contamination case studies.
The Royal Academy of Engineering (RAE) and the Royal Society (RS), and the ECC Committee
concluded that fracking is unlikely to contaminate underground water aquifers, given that fracking
happens substantially below aquifer depths (ECC 2011; RAE & RS 2012). However, faulty or
improperly constructed drilling wells are more likely to result in leakage and contamination. DECC
states that the Environment Agency are taking a risk-based approach to contamination, with
different levels of permissions for pollutant use, depending on proximity to water supply and
likelihood of contaminants entering groundwater (DECC 2013, p. 8). In comparison to the 2500+
products used in the US, a very limited number of chemicals have been approved in the UK so far:
polyacrylamide friction reducers (0.075%), hydrochloric acid (0.125%) and Biocide (0.005%). These
are specific to Cuadrillas fracking explorations so far and the list will change on a case by case basis
(DECC 2013, p. 11).
Permissions and Safety
At present, European hydrocarbon fracturing is regulated with non-binding recommendations of
minimum principles on planning, sustainability and risk (Potonik 2014). Internationally, the IEA has
developed a set of golden rules around transparency and environmental sustainability, which it
deems essential for socially and environmentally responsible fracking (IEA 2012). It is uncertain
whether, without legal enforcement, industry will foot the cost increases associated with
incorporating these recommendations and golden rules.
Irrespective of regulatory requirement, UK fracking still has a lengthy permissions procedure. Before
fracking can commence, permissions and licenses must be obtained from: DECC, landowners, the
Coal Authority, the Minerals Planning Authority, the Environment Agency, and the Health and Safety
Executive. The Office of Unconventional Gas and Oil (OUGO) has been set up to manage these
regulatory bodies (DECC 2013, pp. 5-6). Currently, the government are planning to remove the
requirement to give notice to landowners where works are solely underground (White et al. 2014, p.
9). A report by Pyry estimates that the regulatory process from first license to full-scale production
will take between 6-8 years (Pyry 2014, p. 5).

Conclusion
The Low Carbon Hub believes that ~75% of remaining fossil reserves should stay in the ground.
Fracked gas is fossil fuel and therefore adds to the stock of carbon being put into the atmosphere,
whether it helps the UK-specific position look better short-term or not. We believe that fracking is a
short-term, transition resource which will only delay the necessary implementation of a wholesystem change to decentralised renewables. Therefore we would only be able to support anything
on fracking if safety concerns were allayed; CCS was made mandatory; and there was a strong link
between the exploitation of that resource and the use of revenues from it to speed up deployment
of renewables, reduction of electricity demand and development of a national Smart Grid.
In regards to the role of fracking in the community, The Low Carbon Hub subscribe to the following
statements agreed by the Community Energy Consultation Group in January 2014.
a)

The Community Energy Strategy [CES] is focused on supporting communities to wean


themselves off fossil fuels and reduce UK carbon emissions, as a new fossil fuel resource the
exploitation of shale gas runs counter to this (MacKay & Stone 2013).
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b)

c)

The exploitation of shale gas is not compatible with approaches to community energy
outlined within the CES, as it offers little opportunity for community ownership and local
control, with a supply chain that stretches way beyond any communitys influence and a fuel
source that cant be directly utilised locally.
The provision of community payments by Fracking operations are analogous to planning gain
associated with any major infrastructure project and in themselves do not make a
development a community project. This would be as true of a commercial renewables
project offering only financial community benefits, as it is with shale gas.

Produced by Hannah Jacobs, for Low Carbon Hub, April 2014.

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