Bloomberg News

U.K. Shale Fracking Can Resume Provided Risks Minimized

April 17, 2012

Shale gas fracking operations should be allowed to resume in the U.K. as long as “robust” measures are adopted to safeguard against future risks, an independent report recommended today.

Cuadrilla Resources Ltd. suspended operations in the northwest of the country last year after causing two minor earthquakes. Operations can continue as long as precautions are taken, according to the report commissioned by the Department of Energy and Climate Change.

Hydraulic fracturing, a process using water, sand and chemicals to open fissures in rocks and release natural gas, has made the U.S the world’s largest natural-gas producer while raising concerns that the technique pollutes drinking water and causes earthquakes. France was the first country in the world to outlaw hydraulic fracturing of shale rocks last July.

Cuadrilla released a report in November saying that fracking probably caused the quakes. The first tremor was on April 1 and measured magnitude 2.3 on the Richter scale. A weaker quake of 1.5 was recorded in May. Earthquakes of magnitude 3.9 or less on the scale are considered minor or micro, while anything under 4.9 is described as light and is unlikely to cause major damage.

‘Cautious Continuation’

“The authors of this report see no reason why Cuadrilla Resources should not be allowed to proceed with their shale gas exploration activities and recommend cautious continuation of hydraulic fracture operations,” today’s report said.

The experts recommended magnitude 0.5 as the maximum threshold when operations should be stopped and remedial action taken. That compares with an initial proposal of magnitude 1.7. Other recommendations include injecting small amounts of water before undertaking a full-scale fracking operation as well as monitoring.

Seismic hazards elsewhere in the U.K. and Northern Ireland should be assessed before drilling starts, Peter Styles, a professor at Keele University, Brian Baptie of the British Geological Society and fracking expert Christopher Green said in the report.

Riverstone Holdings LLC-backed Cuadrilla estimates there are 200 trillion cubic feet of gas in place in the Bowland shale near the seaside city of Blackpool. The British Geological Survey estimated in 2010 that recoverable resources could be about 150 billion cubic meters, enough shale gas to supply the U.K. for two years.

IGas Estimate

Other companies with shale assets include IGas Energy Plc (IGAS), which is drilling in Cheshire in northwest England. Earlier this month, IGas said it may double the 4.6 trillion cubic feet estimate of its shale gas resource.

Supporters of shale gas say the U.K. can’t afford to overlook its potential. The North Sea fields discovered in the 1970s that made the U.K. self-sufficient are running dry and the country imported more than half its gas supplies last year.

Environmentalists argue that onshore gas drilling will ruin landscapes and the report doesn’t take into account sub-surface damage, which could cause wells to leak.

“If we allow this to happen, we will witness the total industrialization of the British countryside and the destruction of the ecosystems we rely on,” Elsie Walker, an activist at Frack Off, which campaigns against unconventional drilling, said in an e-mailed statement.

‘Not Possible’

It is “not possible to state categorically that no further earthquakes will be experienced during a similar treatment in a nearby well,” according to the report.

While numerical estimates of the maximum magnitude of a potential earthquake “should be treated with caution,” experience at coal-mining sites in the U.K. suggests a tremor would not exceed magnitude 3, they said, providing a realistic upper limit. It would happen two and three kilometres (1.9 miles) below ground and would be unlikely to cause structural damage, they added.

The report will now go out to public consultation before a final decision is taken by the government. Cuadrilla said in December that it wanted to use fracking techniques at three wells in 2012.

To contact the reporter on this story: Kari Lundgren in London at klundgren2@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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