Industry

No way forward for fracking two years after 2.9ML earthquake

Two years after the UK’s strongest fracking-induced earthquake, there’s no agreement on how to manage shale gas risks, an exploration company said today.

Cuadrilla’s Preston New Road fracking site. Photo: Cuadrilla Resources

Regulators suspended fracking at Cuadrilla’s Preston New Road site on 26 August 2019 after a 2.9ML earthquake induced by operations.

It was felt across the Fylde region of Lancashire and experts received nearly 200 reports of damage.

The government later imposed a moratorium on fracking across the whole of England.

This remains in place and ministers have said it would be lifted only when “compelling new scientific evidence is provided which address the concerns about the prediction and management of induced seismicity”.

The industry and regulators have been negotiating on what research would address government concerns.

But Francis Egan, Cuadrilla’s chief executive, said today:

“Agreement has not yet been reached on the extent of the work required”.

Mr Egan was writing in annual accounts of Cuadrilla’s parent company, AJ Lucas, published today. He said:

“Cuadrilla has continued to engage with the Regulator and with other industry players on the definition of appropriate technical work-scopes concerning the prediction and management of seismicity induced by hydraulic fracturing.

“Efforts continue to define an agreed path forward.”

Mr Egan said the 2.9ML earthquake was caused by a fault that could not have been detected on existing 3D seismic survey data.

He said well integrity at Preston New Road had not been compromised.

He also described as “de-minimis” the modelled property damage.

There were 197 reports of damage to the British Geological Survey (BGS). Cuadrilla has not revealed how many complaints it received, nor the value of any damage or compensation paid.

The BGS said it also received several thousand reports from people who felt the earthquake. It recorded the seismicity at intensity level 6, or “slightly damaging”. The highest intensity level is 12 (completely devastating) and the lowest is 1 (not felt)

In today’s accounts, Mr Egan said the BGS level 6 was “difficult to justify”.

Operations and tax refund

DrillOrDrop reported earlier this year that Cuadrilla had received research and development tax credits. Today’s accounts said the company had been paid A$4.3m by the UK tax authorities in the year to June 2021.

This contributed to the A$19.6m in cash flow from AJ Lucas operations in the year to June 2021, compared with A$2.0m in 2020.

Mr Egan said there had been “little or no operational activity” at Cuadrilla’s sites.

Despite the moratorium, Cuadrilla was permitted to continue testing wells at Preston New Road. But in response to a freedom of information request by DrillOrDrop, the Oil & Gas Authority confirmed there was no current consent in place for an extended well test at the site and no application was under consideration.

Mr Egan also said there were “significant cost reductions”. Total UK net costs for were A$1.1m, up slightly on the A$1.0m in 2020. The company had met all its UK licence commitments and obligations, he said.

According to the accounts, AJ Lucas paid Mr Egan A$53,348 (about £28,195) in the year to June 2021. He was appointed to the AJ Lucas board in May 2020. He holds more than 330,000 shares in Cuadrilla. He is also a director of the trade body, UK Onshore Oil & Gas.

Shale gas and climate change

Mr Egan said the ongoing growth of imports of liquified natural gas was “incompatible with the need to address the UK’s contribution to climate change”. He said:

“Failure to develop UK onshore natural gas could add an extra 145 million tonnes CO2e to the UK’s carbon footprint, simply due to provenance of LNG imports to the UK from the Middle East, US, North Africa or Russia.”

Mr Egan said the carbon intensity of onshore gas production had been forecast at 13.8gCO2/kWh. He said this was less than a quarter of the average carbon footprint of liquified natural gas (LNG) imported from Qatar, calculated at 60.7 gCO2/kwh by University College London.

He added that Cuadrilla had assessed the geothermal potential of its UK wells. It would “utilise this as part of a broader assessment of potential alternative uses both for existing sites and wells”, he said.

Ruth Hayhurst will be reporting for DrillOrDrop from the COP26 climate conference in Glasgow in November

26 replies »

  1. Hardly anywhere near “our” tax receipts that were paid to cover the expense of the policing of PNR, Mike.

    Don’t seem to remember much concern regarding that over the last few years from the antis.

    Oh, I forgot-the one sided equations are required to try and make a point.

  2. Good heavens Martin. Fancy you avoiding the answer to a question by answering a totally different question of your own.
    On the subject of the cost of policing PNR and several other potential fracking sites that were never fracked, and therefore provided no tax revenues, I never did get an answer to my question of whose decision it was to remove so many front line officers from all over the country to drive considerable distances every day for months in order to ensure law and order was maintained in a handful of remote rural locations. A very strange decision on cost-benefit grounds, given the number of officers and their removal from enforcing every other form of serious crime countrywide. It surely must have been made at a very senior govt level and based very much on a political stance, rather than the sort of priorities that senior police officers would use to decide? Maybe the decision was part of a one sided equation, required to try to make a political point?

  3. Maybe it was just because there were those who wanted to organize and excite a demonstration without taking the responsibility to police it themselves, Mike. I even recall, posted on this site, concern from some antis that unsavory elements were being excited to join in at PNR and they found that undermined the locals.

    But that is the thing with mob rule, the mob arrives and believes it has superior rights to others, who are the peaceful majority, so the police have to step in to make sure the peaceful majority stay peaceful and they take up the task of enforcing the law and the rights of the peaceful majority-who, then have to fund it from their taxes.

    Not a strange decision at all, Mike. Very common, but very costly-and, even then around two thirds of those surveyed were not against fracking. What sort of politics ignores two thirds? Oh yes, the Opposition.

    Good heavens, Mike, I can think of better ways to pay my taxes than to pay for that, (which achieved nothing at PNR apart from delay the moratorium on fracking!) or the £400k plus costs awarded at Wressle. And for XR? £50m and rising! Yet, I still see calls for “the Government” to increase funding to alternative energy schemes. Well, here is an idea. Pay back the money that has been taken from the tax payer by the antis and then maybe there will be more money to fund alternative energy schemes! That seems a pretty sensible balanced equation. If the money wasted on rubbish or uneconomic alternative energy schemes was also recovered, and added into the kitty, just think where “we” could be? Not only in terms of funding, but also public acceptance.

    And, that last point will become key. The public will not be bullied into anything, they will react the other way when they see, for example, a large group prancing around dressed as owls trying to suggest they are protecting owls from disturbance, and other such nonsense publicity stunts aimed at themselves rather than anyone else.

  4. The visiting police officers were being live trained in bullying peaceful protesters ready for fracking being extended outside the Fylde and Lancashire.

    • There have been out of court settlements made to protesters who were assaulted by police officers during anti-fracking protests. Why would the relevant police forces not want to contest such cases in a court of law I wonder?

  5. And, there is the hope that others will not have researched, either. Except, the antis were not the only ones who were recording and filming.

    (I presume that indicates you have given up on the compensation, Peter?)

    What was I posting about public acceptance? Denial of the reality will only work further against that.

    And, now there is Animal Rebellion! Not only wanting the elderly poor in energy poverty, but also wanting to prevent them being able to access cheap milk for their Horlicks.

    Who on earth thought it was a good idea to engage in that sort of conversation? A conversation is not a monologue, and my contribution to that conversation is “crazy”. (Especially the attempt to tag the nonsense with “demand plant based production”!! Ermm, that just about defines the production of all milk in the UK. Although, it has been observed before that herbivores are not understood as widely as should be the case.)
    They are in good company. I am old enough to recall when one individual removed free school milk and the reaction to that. Who was it? Margaret Thatcher! OMG, this could indeed be a very interesting conversation.

    Meanwhile, I will prepare my supper of White Cheshire with crackers and a peach, whilst the activists denude the environment of bamboo that could have fed some pandas.

    • Martin, my home has been fully repaired at Cuadrilla’s expense thank you for asking and the insurance company that repaired the more seriously damaged home have been repaid in full by Cuadrilla. I’m sure Mr Egan would be more than pleased to confirm these and further payouts on request. NOT!
      Obviously they will be used on evidence should the frackers attempt to return.

  6. So, Cuadrilla are pretty decent neighbours then, Peter! “Used as evidence”? Depends upon the terms Peter-if it was specified as something like goodwill, no chance.

    Hope those who may be encouraged by Dr. Frank to go for geothermal will be so supportive, especially in respect of subsidence.

    Wonder whether XR will be so accommodating regarding paying for damage deliberately inflicted?

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