The UK shale gas industry has upgraded production estimates by more than 70% following early results from two sites.
In a report published this morning, the industry organisation, UK Onshore Oil and Gas (UKOOG), said it had increased its central estimate of productivity to 5.5 billion cubic feet (bcf) per lateral well.
Based on this figure, UKOOG predicted that annual UK shale gas production could peak in the early 2030s at 1,400 bcf. This would be enough, it said, to supply 35 million homes, more than the UK total, and eliminate the need for net gas imports.
The figure is based on estimates from flow tests at Cuadrilla’s Preston New Road site, where just 5% of the well was fracked as planned, and what UKOOG called “encouraging” shale drilling in Nottinghamshire.
The peak also relies on assumptions that are likely to alarm opponents of the industry:
- 100 pads, each with 40 lateral wells
- Unhindered flow tests
- Drilling and fracking 4-6 lateral wells per pad per year for seven years
- Construction of 10 new pads each year for nine years
DrillOrDrop could not find a pad with 40 laterals anywhere in the world so we asked for an example. UKOOG said “some US operators were working with 20-40 wells per pad”. It also mentioned Encana’s mega pad in Texas with capacity for 64 wells, which the company reportedly compared to a “military occupation”. UKOOG also said UK shales were thicker than those in the US and UK land use controls tighter so multi-lateral pads would be more prevalent here.
We also asked whether “unhindered flow tests” meant that the “traffic light system” regulations on induced seismicity would be abandoned.
The rules currently require fracking to pause for at least 18 hours if it induces earth tremors measuring 0.5ML (local magnitude) or more. Cuadrilla had complained that the traffic light system had restricted its flow tests and could make shale gas commercially unviable.
UKOOG said its report assumed there would be a review of the traffic light system but so far it has not put a figure on what it thinks the threshold should be for stopping work. A spokesperson said:
“Cuadrilla estimated the recovery of their well with all stages fractured as planned.”
So far, UK shale gas companies have drilled at just three sites: Preston New Road and the Nottinghamshire sites of Springs Road, Misson, and Tinker Lane. Fracking has paused at Preston New Road. The Tinker Lane well is to be plugged and abandoned after failing to encounter the Bowland Shale. Drilling the vertical well at Misson has not yet reached its target depth, though the operator, IGas, said today it had encountered more than 250m of shale. Planning permission is in place at two other sites: Marsh Lane in Derbyshire and Harthill in south Yorkshire.
Carbon savings and balance of payments
UKOOG also said a domestic shale gas industry would save 80 million tonnes of lifecycle carbon dioxide by 2035.
The calculation relied on the conclusion that liquified natural gas had a larger carbon footprint than UK shale gas (2013 Mackay and Stone report for the UK government). This conclusion has since been challenged and was a key argument in a successful legal challenge to the government last week.
UKOOG assumed UK shale gas would displace imported liquified natural gas (LNG). This LNG would, in turn, was assumed to displace coal elsewhere in the world. DrillOrDrop asked UKOOG what the assumed mechanism would be for not producing or burning coal. UKOOG said the savings could not be guaranteed because “it cannot be mandated that displacing LNG will always replace coal in power generation”. It added that the UK will import gas from non-LNG sources as well as LNG.
If achievable, carbon benefits from UK shale gas production on the UKOOG scenario would probably come too late for new houses in the UK. The Committee on Climate Change recommended last month that no new homes should be connected to the gas grid from 2025.
UKOOG responded that gas remained a vital source of energy for the UK in all scenarios, including those compatible with UK emission reduction targets. The organisation said:
“Nothing in the CCC’s recommendations for new homes changes this vital point. Indeed, 85% of home are connected to the grid.”
Balance of payments benefits
Based on the production assumptions, UKOOG said the elimination of net gas imports would improve the balance of payments by about £8 billion a year. This is the same figure as the estimate in a report in 2013 by the Institute of Directors that assumed peak gas production at 1,100 bcf.
UKOOG said it had not calculated a figure for tax flows because it did not have data on the costs of production. But it said the industry had already invested £400m-£500m and it endorsed a 2014 estimate by EY that the industry would spend £33bn over two decades in the supply chain.
A single pad of 40 laterals would provide £13.5m in community benefits and £27m in business rates, assuming a 25-year lifetime, UKOOG added.
“Growing in strength”
UKOOG’s chief executive, Ken Cronin, said:
“This is a very significant upgrade to previous estimates. The industry to date has invested between £400m and £500m in exploring for shale gas in the UK, creating local jobs and supply chain opportunities. The UK spends £7bn at present per year on importing gas into this country, generating next to nothing by way of UK benefits, leaving us less secure and creating a greater environmental impact as gas is shipped and piped in across oceans and continents.
“Last year the UK’s LNG imports grew by 20%, with Russian LNG showing the largest increase at nearly 20 times the 2017 figures – the equivalent to supplying 1.6 million UK homes. Given these new projections, it now makes absolutely no sense to ignore our huge resource of homegrown gas.
“I am delighted at the way the industry has stepped up in delivering on the potential highlighted in 2013, and in fact there is a bigger opportunity. I have also been impressed at how the industry has worked together to improve performance at each new site. The reduction in drilling times has shown that the commercial prospects for the industry are growing in strength.”
Reaction – shale gas opponents
Dr Doug Parr, chief scientist, Greenpeace
“UKOOG’s ‘updated’ figures are six years out of date. They are still using a 2013 figure from the Institute of Directors, forecasting that the UK fracking industry would drill 4,000 wells, at a rate of 400 a year.
“This has been thoroughly debunked by the government in a Cabinet Office report, and by Dan Lewis, senior adviser at the IoD, who told Unearthed last year that ‘The 2013 projection that, at peak, the UK’s drilling schedule could see 400 new laterals installed hasn’t come to pass, for a variety of reasons’.
“And it’s been debunked by reality. Greenpeace are aware of two fracked wells in the UK, one at Preston New Road, currently inactive due to earthquakes, and one at Preese Hall, abandoned due to earthquake damage. We may have missed one, maybe even two, but not 400 a year.”
Tony Bosworth, Friends of the Earth
“The shale gas industry appears to have strapped on the rosiest of rose-tinted glasses to look at the future. These new figures are mainly based on extrapolation from just one partly-fracked well.
“This is the latest industry attempt to push for more government concessions to make fracking easier. Ministers mustn’t water down the rules by allowing oil and gas firms to drill without planning permission, or cave into their demands to be allowed to trigger bigger earthquakes before having to down tools.”
Steve Mason, Frack Free United
“Here we have an example of a trade body talking up its own industry for the benefit of its members, as any good well paid trade body would. Claire Perry confirmed again last week in Westminster, there has only ever been 2 fracks in the UK, but somehow UKOOG seem to have built a whole scenario around one well that was only 5% fracked and had to shut down because of the higher risk of earthquakes.
“But it is nice to have confirmation that the industry is planning thousands of wells across the UK as we have been saying for years. I’d hate to be living anywhere near any of these ‘Super pads’ they are now talking about with 24/7 drilling, fracking and industrialised operations for years and years.
“What I do find interesting is that these figures came out just a few days after frackers received more bad news as the government lost its battle in the high court, concluding that the National Planning Policy Framework paragraph on support for shale gas exploration was unlawful. Coincidentally, it also called into question the very same Mackay and Stone climate study which UKOOG have referenced in this report to back up its justification to frack across the UK.
“Let’s be grown-ups about this. Does anyone really believe that the fracking companies will just stop at a few thousand wells? The companies have shareholders and profit to look after, I seriously doubt they are likely to have a crisis of conscience and want to stop fracking in the 2030’s . The UK should be cutting back its fossil fuel usage, not adding to the global supply. We certainly should not be locking ourselves into a new fossil fuel dependency for the next 50 years.”
Peter Allen, Frack Free Ryedale
“This is really dangerous stuff. “Not just because their figures should worry us but because parts of it are blatantly untrue.
“For instance, according to DUKES imports of LNG – far from being such a large part of our gas – supply fell by 30% in 2017 (they fell 40% from Qatar) and there are many more examples here that are false.
“The problem is that many people will believe it and for those who have read Claire Perry’s response to a question on acidisation in Parliament last week we can have no faith that the government actually know what is going on.
“This is headline grabbing stuff that they hope will strengthen public opinion in their favour regardless of a total lack of truth.”
Dr Tim Thornton, retired Ryedale GP and anti-fracking campaigner
“UKOOG assumes up to 40 laterals off one well pad, which could result in the community being exposed to heavy traffic increases, air pollution, night-time noise that exceeds the limits councils set (Kirby Misperton and Preston New Road) uncontrolled releases of gases (West Newton and Preston New Road) and seismic events/earthquakes (Preese Hall and Preston New Road) for what the industry refer to as a ‘short time’. This short time is likely to be at least three months per lateral, amounting to 120 months or 10 years.
“With exposure to the concentration of wells and the high activities of drilling and fracking, communities may expect to have similar health effects that others have experienced around the world. This includes pre-term-babies, complicated pregnancies, asthma attacks, heart attacks, stroke, migraines, depression, and a multitude of social and financial impacts.
“UKOOG seems happy to be producing a novel fossil fuel in the UK to reduce the cost of imported fuel. Perhaps we should all be looking at reducing fossil fuel use in UK and investing in solar, wind, heat pumps and research into wave, tide and Electric Vehicles. UKOOG argues that CO2 emissions may be lower for shale gas than LNG but ignores the rise in global emissions of methane – caused by fracking – which is a far stronger greenhouse gas. Already we have seen cold venting of methane at West Newton and Preston New Road and applications for flaring rather than using the fracked gas.
“UKOOG represents the fossils of our national thinking. We should not be tempted into their magical predictions or the number of homes linked to the gas grid. If we respect our children and grandchildren then gas, oil and coal should all be consigned to the history books.”
Dr Simon Sweeney, University of York
“With climate breakdown already happening (record February temperatures in the UK, rain in February on Greenland, violent storms in southern Europe and the USA) it is astonishing that corporate behemoths have the gall to push ahead with more fossil fuel extraction.
“Clearly anti-fracking campaigners were right: UKOOG wants to industrialise the rural landscape and degrade communities on a massive scale.
“The High Court ruled last week that government support for fracking is illegal because it failed to take climate change into account.
“What will it take to persuade the government to support local, national and international efforts to switch entirely to renewable energy and boost conservation?
“We need a government that will unequivocally support multilateral agencies in combating an existential threat to life on earth.
“The UKOOG estimates are yet another warning sign of what is to come without sustained public protest. And not just by children.”
Reaction – shale gas supporters
Francis Egan, chief executive, Cuadrilla
“We should not underestimate what is at stake here for the UK. Securing our domestic gas supply is only one part of this equation. Consider also the amount of tax revenue this industry could create and what improvements that could support in society. Consider also the alternative. Just last week, latest figures from Government revealed our reliance on LNG imported from Russia had risen dramatically in 2018 and now makes up about 20 per cent of all imported LNG into this country. This is an increase of about 20 per cent compared to 2017.
“Yet here we have a rich resource of high quality natural shale gas which would flow directly into the local grid with minimal treatment with each site providing enough gas for half a million homes. The forecast is clear that 60 sites could reduce our £7bn spend and reliance on imports by 50 per cent. It would boost our economy and ensure we have enough energy to heat our homes and food for many, many years to come.
“Cuadrilla has proved it is there and that we can extract it safely and in an environmentally responsible way. We’re back on site and we’re getting ready to make these estimations a reality. It is now imperative that people understand that they have nothing to fear from fracking and actually a huge amount to gain.”
Lee Petts, Lancashire for Shale
“These new forecasts suggest that Lancashire really is sitting on a world-class shale deposit, and that it has incredible potential to help meet a significant proportion of the UK’s gas demand whilst cutting back on imports that come at a higher financial and environmental cost.
“With sensible forecasts showing that we’ll still be using considerable quantities of gas to heat our homes in 2050 and beyond, it makes sense to use more of our own if we can, creating jobs and prosperity along the way, rather than increasingly relying on gas from other countries.
“Today’s delivery of equipment is a welcome sign that Cuadrilla remains committed to advancing its shale gas exploration plans in Lancashire. There’s a lot at stake here, given what we now know about shale’s real potential, and so it’s good to see Cuadrilla continuing it’s vital work.”
UKOOG 2019: central production scenario of 5.5bcf per lateral. Total annual UK peak production of almost 1,400bcf in 2030s, eliminating net gas imports.
Institute of Directors 2013: central production scenario of 3.2bcf per lateral. Total annual UK peak production of 1,100bcf, reducing net gas imports in 2030 from 76% to 37%.
Martin, Cuadrilla cannot stay within the TLS parameters, they are really clutching at straws and they know it.
I think you will find Ronin that even the 10 Commandments have changed over time! So has the off-side rule.
Some call it progress. Others, a form of evolution but maybe not progress.
If you want everything to stay the same, embrace poverty and starvation.
It’s all in the headline:
“UK shale gas could wipe out imports – upgraded industry estimates”
“For instance, according to DUKES imports of LNG – far from being such a large part of our gas – supply fell by 30% in 2017 (they fell 40% from Qatar) and there are many more examples here that are false.” FFR
And in 2018 imports of LNG went up 20%……and in 2018 exports of LNG went down 60%……..
““With climate breakdown already happening (record February temperatures in the UK, rain in February on Greenland, violent storms in southern Europe and the USA) it is astonishing that corporate behemoths have the gall to push ahead with more fossil fuel extraction.” UOY
I thought the plan was to replace existing imports with home produced gas? LNG (higher emissions) with shale.
The impacts on infrastucture (roads etc) are valid objections; climate change, sub surface are not.
Bit like the current chlorinated chicken nonsense.
Anyone notice it is assumed the EU decision was correct, and based upon science? Nope.
Did the UK EU reps.support the decision at the time? Nope.
Did the UK experts in the industry believe it was scientific? Nope.
Just goes to show how the vast majority of the media want to support a fake story and not investigate the facts.
The US still use hormones and significant antibiotic use in beef, the science is quite clear how damaging this is. Some of the reports I have read on US animal welfare have been very worrying. And then of course there is the public perception and the power of consumers. I for one do not want to eat chlorinated chicken, care very much about animal welfare and support the science that states the use of hormones and antibiotics is harmful. So just like fracking some of the science demonstrates negative impacts and harm and the public aren’t keen either. Without public support I very much doubt whether fracking can ever succeed.
Chlorinated chicken is absolutely NOTHING to do with animal welfare. It is all about food hygiene. Europe produces the vast bulk of chickens for the table in exactly the same way as in the USA, and processes them in exactly the same way-except for the extra step of adding some chlorine to the wash water.
You state you support animal welfare but state the use of antibiotics is harmful. So, doctors can prescribe “harmful” substances to assist human health, but veterinary surgeons can not for animals? Very strange approach to animal welfare.
Interesting how you seem so easily directed by fake news stories. This one is just to promote EU have higher standards on behalf of the Remainers. The fact that they have picked a totally incorrect example just demonstrates lazy journalism.
It was the French poultry industry that pushed the ban on imports of US chickens because the US have much cheaper feed costs for the chickens. I took all the major UK poultry producers to France to see what the French were doing to remove pathogens in a better way than the US. The result was pretty clear immediately-nothing.
I think that the vast majority of the media never check nor care about the facts, they just repackage whatever has been put out by industry or pressure groups and pop it out to fill the space. According to flat earth news, this is due to the conversion of newspapers into profit centres. Their only contribution is to spice up the headline a bit to sell the story ( not something new ).
A good example is the link used by Kat below
The base report just notes that estimates of gas in place may be higher than what will be found, but that we do not yet know. All pretty level headed.
Martin, you appear to always want to have the last word but in doing so it does not make you right. First of all where did I say chlorinated chicken was to do with animal welfare? I state my preference not to eat chlorinated chicken. And then you rant on about antibiotic use, again missing my point entirely. Overuse of antibiotics is harmful. Overuse in farming is causing antibiotic resistance and the so called super bugs. I never said vets cannot prescribe antibiotics my point is the overuse.
I’m sorry but you are simply wrong on all counts.
Sorry KatT, you seem to pick up some info., know nothing about the subject and yet assume a position!
Antibiotic usage is strictly controlled by veterinary surgeons and is quite limited. Because animals are usually kept in large groups if a few require treatment then the rest may have to be treated as well. There are some products used extensively which are classified as antibiotics but are used to prevent parasitic infection-coccidiosis, that would (note the would) cause routine high levels of mortality if not protected against. Unaware groups, including the NHS, fall into the trap of confusing this issue, and get their totals wrong. In reality, antibiotic resistance is now appreciated to be largely the responsibility of the NHS prescribing excessively and inappropriately.
But, of course, you know so much better than a fully qualified Animal Nutritionist who has also worked within the animal health sector for many years. Those animal health companies were off shoots of international medical companies, so I do not look at it as them and us.
Overuse of antibiotics is harmful. Overuse in farming is not the issue, although China is one major exception to that. The controls on farming have been tightened a lot in the last 20 years, unfortunately the NHS has only just started to address the issue.
Of course individuals may chose what they eat. That is the joy of food labelling. You could decide to pay the premium, others could make another choice if they were happy they had not been harmed by regular exercise in the local, chlorinated, swimming pool.
But, then the antis have the same approach with energy, so nothing new. (We all have to chip into the extra £500m/year payment on our bills for ONE off shore wind farm.)
I would support the chlorinated swimming pool with a few dozen bodies in it, so why would I not do so for a bath that sees thousands of chickens per day? But, each to their own and that is assured with food labelling.
Seems that I am a bit old fashioned but I prefer to take a stance on subjects where I am confident I do know what the facts are. If I don’t I keep an open mind. I see it as a precaution against fake news.
hewes62 I’m very sorry but I don’t understand your point nor the claim the Guardian article is fake news. Whilst I’m not a geologist the author writes about tilt and geological formations that in his opinion will make gas recovery more difficult, not just about the gas in place. And just as an aside, I consider that a newspaper that is funded by the general public is far more likely to provide accurate and unbiased news than those funded by individuals with vested interests.
[Comment edited at poster’s request]
The report by Prof Underhill is fine.
The guardian have done a worthy job in unravelling it, but the story is … more drilling required to determine prescience, amount and extent of UK Shale gas reserves says geologist. Something that INEOS et al would all agree with whole heartedly ( and indeed covered to some extent during their presentations on the East Midlands ). So the paper has recycled the news, but has not provided much context, which is that the author has an issue with the BGS number.
The problems papers have ( and the guardian gets a mention ) in checking facts is laid out in the book below ( reread after opening a box in the attic ). That we pay for them does not seem to carry much weight it seems.
Yawn, yawn haven’t we been here before? The government’s own report exposes the hype.
This patter seems to be par for the course given the numerous reports coming from the US that recovery rates have been over estimated/exaggerated along with reports about the huge debt the fracking industry has, surely the industry can’t possibly think we will just believe this again?
And then of course reports like this, where all the uncertainties about U.K. shale and even the thickness of it may not be as productive as claimed. How short the memory of the U.K. shale industry is, or perhaps how desperate?
KatK – that’s why it’s called exploration.
Judith, the way Ken Cronin and the industry are publicly promoting this report does not reflect how little fracking has taken place here in the U.K, nor the many unknowns. The PR of this industry knows full well that pushing out extremely positive messages, even if over exaggerated and unproven will grab the headlines. And we really have heard it all before.
There have been some reports from the US that state the so called supersized pads haven’t been as productive as they’d hoped, so there is no guarantee whatsoever that even larger pads with a higher number of wells per pad will work here in the U.K. And no mention of the economic problems the industry has in the US. This is just another cheap sales shot by the industry trying to find another way to try and present the industry in a favourable light. No one is fooled, the industry has no credibility with the public and just lunges from one PR disaster to another.
KatK – as I mentioned anove – there is a reason it’s called exploration. Firmer answers will be available when 20-40 wells have been drilled and fracked. Of course people like you don’t want to know the answer because you’d sooner we bought gas from Qatar.
Judith, what exactly does “ people like me” mean? You have no idea what I want, in fact you don’t know me at all. Stereotyping people or being patronising doesn’t help make a point, quite the opposite in fact. I know exactly what exploration means and I also know this industry has stated they would need to drill and frack 40, possibly more, wells to know whether fracking might be commercially viable in the U.K. And that is exactly my point, a failed attempt at Preese Hall and a 5% completed frack at PNR is a long way from 40 plus wells/fracks and does not equal the claims being made. Claims even more ambitious than the now debunked IOD report I referred to previously. People like me read facts and so far there is nothing to support these claims, nothing, and as I say we’ve heard it all before.
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KatT-perhaps the industry has access to data you do not? So your nothing is exactly that-your information.
Judith has repeated this is exploration. If you really feel that all the data recording is going to be immediately available you are forgetting the commercial sensitivity aspect.
You can’t have it both ways. When the first well showed it was at the fringe of the shale area the antis wanted to accept the report in full, now they have reported the second site has found what they expected, it is unacceptable!
But, Q2 should offer a bit more excitement as the analyses are completed. I hope CP stocks up on some Aspirin-she may have a few headaches to deal with.
The supersized pad suggestion is interesting. If there are areas in UK where the gas shale strata is this thick then it is quite different to many areas in US. Potentially, it could mean fewer pads with longer life spans in UK which could be significant, but a long way to go to determine that.
‘perhaps the industry has access to data you do not?’ – yes, am afraid they do Marty; they know it is a dead duck and are using people like KC et al to maintain the ruse so they can milk the poor buggers who think they can make something from nothing; shocking.
From the beginning there have been ‘estimates of volume’…..over eight years of exploration, nothing produced except earth tremors and angry people; bit like Brexit really – both are disasters for the blues; so many players sent off, only two minutes to game over, no extra time.
Very much like the N.Sea saga too, Passepartout.
John may enlighten you how that panned out-or, you could ask a smiley Norwegian.
Is this supposed to mean something?
Sher I can’t believe you asked that 😉
Probably that there were nearly 30 wells drilled before commercial hydrocarbons were discovered in the North Sea.
Can’t believe you needed to ask, Passepartout.
Good job Paul was kind enough to provide you with the facts.
Sorry, I forgot the off grid life can leave a bit of a gap.
Nothing worth providing, there Marty.
Interesting your need to refer to me by another name; psychologically this shows avoidance and inability to face the truth…..
You don’t need to apologize before an obvious insult 😉