Shale Gas Exploration and Hydraulic Fracturing South Cleveland Basin Area September 2016 1
• Who we are • What is Unconventional or Shale Gas • UK Shale Gas Areas • Operations • Economics 2
Cuadrilla – who we are • Formed in 2007, UK company • Early entrant to shale gas in Europe • Backed by industry-specialist funds UK Exploration assets Bowland basin ≈ 293,000 acres • • Weald basin ≈ 192,500 acres UK 14 th Round offers • Cleveland basin and Gainsborough Trough ≈ 314,800 acres 3
• What is Unconventional or Shale Gas? 4
5
Why is Hydraulic Fracturing Needed? 6
Gas emanating from visible fractures 7
• UK Shale Gas Areas 8
DECC/BGS Shale Gas Study Central Case Estimates • Bowland Basin – 1,329 tcf gas • Midland Valley – 80.3 tcf gas – 6.0 billion bbl oil • Weald Basin 9 – 4.4 billion bbl oil
Bowland License Areas http://www.ukogl.org.uk/ 10
South Cleveland Basin SE75 SE85 SE95 TA05 TA15 SE74 SE84 http://www.ukogl.org.uk/ Firm Drill or Operator Block(s) commitment Drop SE74 & SE84 new 2D 1 well CUADRILLA new 2D 1 well CUADRILLA SE75 SE85 & SE95 new 2D 1 well CUADRILLA TA05 &TA15 new 2D 1 well CUADRILLA SE72 & SE73 new 2D 1 well EUROPA 11
• Operations 12
Seismic 13
Historic Seismic Coverage http://www.ukogl.org.uk/ 14
2D Seismic SPE 14UNCV-167776-MS, Clarke et al 15
Historic Drilling 16
Drilling 17
Well Design 18
Hydraulic Fracturing • Injects fluid into rock at a high enough pressure to cause the rock to fracture. • Fluids can be water based, hydrocarbon based, acids, liquid CO 2 , gaseous N 2 , foams and various combinations. • Fluids must be approved by the EA and be non-hazardous to groundwater. • The fractures are held open with proppant after the hydraulic pressure is released. • Typically silica sand. • At greater depths or pressures, ceramic proppants can be used. • Common sizes are 20/40 mesh (0.853mm -0.422mm) and 40/70 mesh (0.422mm-0.211mm) 19
This is not a frac rig! 20
Frac Kit 21
Frac Boats in the North Sea 22
Multi-well pad Development is in the subsurface 23
After drilling and fracturing the equipment is removed For the next 25 years the site looks like this Elswick facility 24 (Artist’s impression, production pad 2013)
The UK regulatory process is thorough Statutory bodies Environmental permits issued by the EA comply with: • Department for Business, Energy & Industrial Strategy/Oil and Gas • EU Mining Waste Directive Authority (OGA), • EU Industrial Emissions Directive • The Environment Agency (EA) • EU Groundwater Directive • The Health and Safety Executive • EU Water Framework Directive (HSE) • Other relevant legislation • The EA and HSE continually monitor operations Other consultees – March - August 2011: EA visited the • Natural England Preese Hall site 10 times (7 unannounced visits) • National Grid • Mineral planning authorities approve • Public Health England all surface operations • Parish Councils • Water Utilities 25
European studies The currently available evidence indicates that the North Atlantic Group of the European Geological Surveys potential risks to public health from exposure to "The Survey Directors are concerned that frequent the emissions associated with shale gas misleading media messages regarding exploration and extraction are low if the operations are properly run exploitation of raw materials and geo-energy have the and regulated. potential to obscure scientific results and conclusions , and may ultimately lead to poor decisions for Society." The health, safety and environmental risks associated with hydraulic fracturing (often termed ‘fracking’) as a means to extract shale gas can be This EASAC analysis provides no basis for a ban on managed effectively in the UK as long as operational shale gas exploration or extraction using hydraulic best practices are implemented and enforced through fracturing on scientific and technical grounds … regulation. A total ban on hydraulic fracturing can not be The Scottish Government, Edinburgh 2014 justified on the basis of scientific and technical The technology exists to allow the safe extraction facts. of such reserves, subject to robust regulation being in place. The areas of health, wellbeing and safety " Often dangers are evoked where there are surrounding an onshore industry do not appear to none. When fracking for production of natural present significant risks , although a degree of gas there are widespread fears in the population, uncertainty is present. most of which are unfounded from geoscientific 26 perspective." 26
• Economics 27
UK natural gas use DECC DUKES2015 Annex H 28
Future gas use scenarios 29 (Source: National Grid Future Energy Scenarios 2016)
What a successful shale gas industry has to offer • Meaningful unsubsidised private investment • Meaningful job creation Meaningful energy security contribution • • 10% of tax revenues from shale gas developments, up to a maximum of £10m per site to be spent on local areas • Community benefit for local people 30
Thank you 31
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