1
The energy quest, how shale
gas fits in, what it means for
you
Mark Linder,
Cuadrilla Resources
March 6, 2013
Altrincham...
2
• What is the shale gas process?
• What are the risks? (such as groundwater pollution, water
usage, emissions, visabilit...
3
What is shale gas?
• Normal natural gas that never “escaped” from source rock
• Trapped in nanometre sized pores in brit...
4
Shale gas is normal natural gas that never escaped
“Conventional” vs “Unconventional” traps for gas & oil
5
What is exploration, today?
(Welcome back for Ben Saunders and Tarka
L’Herpiniere, on their completion of Scott’s
iconic...
6
Another view of exploration – a 300 million year
journey
(Preese Hall-1: UK’s Shale Gas Discovery Well)
7
What made exploration possible?
• Horizontal drilling (contact more of the formation)
• Hydraulic fracturing (create pat...
8
Hydraulic fracturing is not new
9
Horizontal drilling,
hydraulic fracturing
(NOT to scale!)
Shale gas = methane gas = natural gas
10
This is not “fracking”
Drilling is first….
11
Water Tanks Frac Pumps
Sand Silos Data VanFlowback
Tanks
Separator
Service Rig
Then fracturing….
12
After drilling and fracturing the equipment is removed
(Artist’s impression, production pad 2013)
342250 342300 342350 ...
13
Why are we exploring now, and why here?
• The UK’s North Sea gas is declining
• Technology exists to recover gas onshor...
14
UK North Sea is declining
UK spending £8B on imports, rising to £16B by 2029
(Source: Department of Energy and Climate ...
15
Unconventional oil and gas – a global resource
2© 2013 HALLIBURTON. ALL RIGHTS RESERVED.
Tight Gas
Shale Gas
Coalbed Me...
16
Lancashire has a “North Sea” of gas
BGS:
"The lower limit of the range is 822 tcf and the
upper limit is 2,281 tcf, but...
17
As of September 2013, three gas wells drilled
• Preese Hall-1 drilled to 9,100 feet
(partially fractured)
• Grange Hill...
18
This is what it’s about
19
The challenges
(4th Media 2012)
20
Environmental sustainability
Issues of concern
– Water
• Aquifer contamination
• Water use
• Flowback water disposal
– ...
21
What residents are concerned about
0 20 40 60 80 100
Damage to environment
Truck movements, noise
Health risks
Contamin...
22
Aquifer contamination – the perception
A question of scale
(4th Media 2012)
23
The reality
4KM (2.5 mi)
8” wellbore (Credit: Ground Gas Solutions 2012)
24
Well integrity
Good well design: triple barrier through aquifer
(Cuadrilla 2012)
25
Fracking water make-up
26
Hydraulic fracturing -- water makeup and
management
• What goes in – 99.5% water, about .5% sand, 0.05% friction
reduce...
27
Truck traffic
• Assuming all the truck
movements take place
in the five years of
drilling, truck
movements would
averag...
28
Seismic risks
29
Seismic risks
Injection can lubricate faults, cause small tremors
– Cuadrilla’s two events: 1 April 2.3 ML and 27 May 2...
30
3D imaging – software exploration
(not to mention micro-seismic imaging)
31
Fractures and contamination
Is fracture length a cause for concern?
– Maximum fracture length circa 588m/1919 ft
– The ...
32
Have you ever washed a car?
You are closer to the aquifer than any fracture.
33
Pollution Perception
34
Impact of pollutants
1. Cuadrilla installs an air quality monitoring package at every
site
– Methane
– Benzene, toluene...
35
Would you want to live next to this?
• Operates 24 hours
• Trucks and heavy equipment
• Noise
• Emits odours
• Emits me...
36
Would you want to live next to this?
• Operates 24 hours
• Trucks and heavy equipment
• Noise
• Emits odours
• Emits me...
37
Footprint is small
(Using Hinkley C as a reference)
Equivalent
energy
production
from natural
gas would
require less
th...
38
Checking it’s Safe – thorough regulation
Regulators are:
• Department of Energy and Climate Change (DECC),
• The Enviro...
39
Through Environmental Impact Assessment
40
Climate change
41
GHG emissions intensity for various sources of gas
Shale gas Conventional Gas Non-EU Piped Gas LNG GAS(UK current blend...
42
Shale gas generates controversy
43
Operators engage with communities
• Statutory consultation and non-
statutory informational events
(16 events, past 24 ...
44
Community benefits announcement –
transformational potential
• Communities receive £100,000 for every
exploration well ...
45
What a successful shale gas industry has to offer
• Meaningful unsubsidized private investment
– (Bowland alone potenti...
46
Perspective on energy
47
Two words begin with “e” and end with “y”
We confuse them all the time
48
What percentage of all energy we use is renewable?
• 30%?
• 20%
• 10%?
49
What percentage of all energy we use is renewable?
• 30%?
• 20%
• 10%?
<5%
(DECC: 012 data)
50
We still depend on fossil fuels
Hydrocarbons =
87%
Non-nuclear
renewables <
5%
51
Future mix for UK energy is gas, nuclear and
renewables – but coal is still a factor in electricity
(DECC: GHG Emission...
52
Gas is much more than “keeping the lights on”
55% of gas goes to heat and industry
• 36% gas goes to heat
• 36% of gas ...
53
The gas in this area alone could make a material
difference
(Source: IoD calculations)
Potential Bowland contribution
54
Gas is essential if we are serious about
reducing CO2 emissions
55
In terms of global CO2 emissions, coal and oil are
significantly higher contributors
Land use
Coal
Oil
Gas
Other
Other:...
56
What can we learn, going forward?
• Shale gas industry brings together sciences and arts
– Geology
– Physics
– Chemistr...
57
The UK is leading in new energy
Besides being a leader in oil & gas…
• A leader in wind
• Innovator in tidal (Tidal Lag...
58
Join the energy quest!
59
Thank you
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Overview shale gas in UK

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Overview shale gas in UK

  1. 1. 1 The energy quest, how shale gas fits in, what it means for you Mark Linder, Cuadrilla Resources March 6, 2013 Altrincham Grammar School for Boys
  2. 2. 2 • What is the shale gas process? • What are the risks? (such as groundwater pollution, water usage, emissions, visability, “earthquakes” etc.) • How does gas fit into our energy strategy? • Why energy is an exciting area of study (and an exciting career) Topics
  3. 3. 3 What is shale gas? • Normal natural gas that never “escaped” from source rock • Trapped in nanometre sized pores in brittle rock (it is called “unconventional” because of the way the gas is trapped) • Needs to be fractured to release • Scientists have known about this for decades
  4. 4. 4 Shale gas is normal natural gas that never escaped “Conventional” vs “Unconventional” traps for gas & oil
  5. 5. 5 What is exploration, today? (Welcome back for Ben Saunders and Tarka L’Herpiniere, on their completion of Scott’s iconic 1,795 mile Terra Nova route from the very coast of Antarctica to the South Pole and back.) http://scottexpedition.com/about
  6. 6. 6 Another view of exploration – a 300 million year journey (Preese Hall-1: UK’s Shale Gas Discovery Well)
  7. 7. 7 What made exploration possible? • Horizontal drilling (contact more of the formation) • Hydraulic fracturing (create pathways for trapped gas) • 3D seismic surveys, monitoring (to map the subsurface)
  8. 8. 8 Hydraulic fracturing is not new
  9. 9. 9 Horizontal drilling, hydraulic fracturing (NOT to scale!) Shale gas = methane gas = natural gas
  10. 10. 10 This is not “fracking” Drilling is first….
  11. 11. 11 Water Tanks Frac Pumps Sand Silos Data VanFlowback Tanks Separator Service Rig Then fracturing….
  12. 12. 12 After drilling and fracturing the equipment is removed (Artist’s impression, production pad 2013) 342250 342300 342350 342400 342450 436900 436950 437000 437050 CuadrillaResources Project:Bowland Location:Lancashire ElswickProductionFacility Elswick(2011) BingMaps 0 30m6 12 18 24 Scale=1:600 X/Y: Meters N Elswick facility For the next 25 years the site looks like this
  13. 13. 13 Why are we exploring now, and why here? • The UK’s North Sea gas is declining • Technology exists to recover gas onshore in the UK • The price of gas is higher (the economics work) • There is a lot of gas underneath us
  14. 14. 14 UK North Sea is declining UK spending £8B on imports, rising to £16B by 2029 (Source: Department of Energy and Climate Change) Our growing gas import gap
  15. 15. 15 Unconventional oil and gas – a global resource 2© 2013 HALLIBURTON. ALL RIGHTS RESERVED. Tight Gas Shale Gas Coalbed Methane 1
  16. 16. 16 Lancashire has a “North Sea” of gas BGS: "The lower limit of the range is 822 tcf and the upper limit is 2,281 tcf, but the central estimate for the resource is 1,329 tcf” • Over 1000m (>3300 ft) thickness of shale • 1000’s feet below aquifers • Very close to major gas pipeline infrastructure UK annual gas consumption ≈ 3.2 tcf 1 after rks water etc. e ownership
  17. 17. 17 As of September 2013, three gas wells drilled • Preese Hall-1 drilled to 9,100 feet (partially fractured) • Grange Hill-1 drilled to 10,700 feet • Becconsall-1 drilled to 10,500 feet • Acquired detailed 3D subsurface mapping of 100 KM2 through seismic survey • Existing: Elswick-1 producing from 3,500 feet (existing sandstone well, vertical fracture in 1993) (For reference, there are over 2,000 onshore wells in the UK, 200 of which have been fractured)
  18. 18. 18 This is what it’s about
  19. 19. 19 The challenges (4th Media 2012)
  20. 20. 20 Environmental sustainability Issues of concern – Water • Aquifer contamination • Water use • Flowback water disposal – Seismicity – Landscape and community impact – Emissions – local health impact, greenhouse gas – Impact on renewables investment
  21. 21. 21 What residents are concerned about 0 20 40 60 80 100 Damage to environment Truck movements, noise Health risks Contamination of drinking water Dangerous chemicals Use of fossil fuels Women Men (Institute of Mechanical Engineers, Fracking survey, 2014) % citing concern
  22. 22. 22 Aquifer contamination – the perception A question of scale (4th Media 2012)
  23. 23. 23 The reality 4KM (2.5 mi) 8” wellbore (Credit: Ground Gas Solutions 2012)
  24. 24. 24 Well integrity Good well design: triple barrier through aquifer (Cuadrilla 2012)
  25. 25. 25 Fracking water make-up
  26. 26. 26 Hydraulic fracturing -- water makeup and management • What goes in – 99.5% water, about .5% sand, 0.05% friction reducer, and a handful of tracer salt • Mains water from United Utilities (already has a biocide) • Sand • Polyacrylamide (classified as non hazardous by the EA) , to reduce friction and improve the suspension of sand in the water • What comes out – flowback water – Very salty water from the formation – Various minerals from the rock, metals (very dilute solution) – NORM (naturally occurring radiation) • Flow-back waters are classified as non-hazardous by the Environment Agency are captured, processed in an industrial facility
  27. 27. 27 Truck traffic • Assuming all the truck movements take place in the five years of drilling, truck movements would average 6.1-17.1 per day • Piping water in saves truck journey • Re-cycling water will save truck journeys 49 States, local governments, and industry can work together in the development to minimize long term effects and to address citizen congestion, damage to roads, dust, and noise 241.The process of sh drilling and hydraulic fracturing, can create short-term increases These nuisance impacts are usually limited to the initial 20- to 30 pe tr su pa w th de au to un ad an re W us m he Barnett Shale play around the Dallas-Fort Worth International Ai permanent pipelines to transfer produced water from well sites t Source: Parker County Commissioner’s Office Tanker Trucks in Parker County, Texas (IoD 2012, central scenario, 10 well pad)
  28. 28. 28 Seismic risks
  29. 29. 29 Seismic risks Injection can lubricate faults, cause small tremors – Cuadrilla’s two events: 1 April 2.3 ML and 27 May 2011 1.5 ML Subsequently we have 1.Conducted 3D survey (better a-priori knowledge of faults) 2.Planned to hydrofracture in smaller stages 3.Placed seismometers and tiltmeters in arrays around sites (real-time data) 4.Agreed a “traffic light” mitigation system, at 0.5ML threshold
  30. 30. 30 3D imaging – software exploration (not to mention micro-seismic imaging)
  31. 31. 31 Fractures and contamination Is fracture length a cause for concern? – Maximum fracture length circa 588m/1919 ft – The top of the Bowland shale is at a depth of circa 6000 feet (Warpinsky et al, 2011) Aquifer depth Fracture depth
  32. 32. 32 Have you ever washed a car? You are closer to the aquifer than any fracture.
  33. 33. 33 Pollution Perception
  34. 34. 34 Impact of pollutants 1. Cuadrilla installs an air quality monitoring package at every site – Methane – Benzene, toluene, ethylbenzene, and xylenes – We publish all data to EA, and in summarized form to local stakeholders 2. Flaring is regulated in the UK, and is minimized – Flaring has been a site practice for 100 years and has not been a health risk for workers in proximity, much less communities 3. Returned water/ gas separation is in closed-cycle system
  35. 35. 35 Would you want to live next to this? • Operates 24 hours • Trucks and heavy equipment • Noise • Emits odours • Emits methane
  36. 36. 36 Would you want to live next to this? • Operates 24 hours • Trucks and heavy equipment • Noise • Emits odours • Emits methane
  37. 37. 37 Footprint is small (Using Hinkley C as a reference) Equivalent energy production from natural gas would require less than 170 acres (30 pads) DECC footnote: “The footprint will depend on the location and turbine technology deployed. DECC estimates the footprint could be between 160,000 and 490,000 acres”
  38. 38. 38 Checking it’s Safe – thorough regulation Regulators are: • Department of Energy and Climate Change (DECC), • The Environment Agency (EA) • The Health and Safety Executive (HSE) • Also County Councils • The EA and HSE continually monitor operations – March - August 2011: EA visited the Preese Hall site 10 times (7 unannounced visits)
  39. 39. 39 Through Environmental Impact Assessment
  40. 40. 40 Climate change
  41. 41. 41 GHG emissions intensity for various sources of gas Shale gas Conventional Gas Non-EU Piped Gas LNG GAS(UK current blend) EstimatedEmissionsIntensity(gCO2e/kWh) (Potential Greenhouse Gas Emissions Associated with Shale gas Production and Use- DECC 2013) (with green completions)
  42. 42. 42 Shale gas generates controversy
  43. 43. 43 Operators engage with communities • Statutory consultation and non- statutory informational events (16 events, past 24 months) • Site visits, rig tours • Speaking to groups, large and small • Letters, newsletters, answering questions, information line • Events, sponsorships • Projects – academia, 3rd parties • Recommending engagement strategies for regulators
  44. 44. 44 Community benefits announcement – transformational potential • Communities receive £100,000 for every exploration well that is hydraulically fractured • Communities receive one per cent of revenues from future shale gas production – Potentially, more than £1 billion over a 20 to 30 year shale gas production timescale could be returned to Lancashire communities within the Bowland Basin license area alone
  45. 45. 45 What a successful shale gas industry has to offer • Meaningful unsubsidized private investment – (Bowland alone potential for £50B through 2040) • Meaningful job creation • Meaningful energy security contribution (up to 1tcf per annum) • Highest regulatory standards (environmental, health, safety) • Small industrial surface footprint -- 100 sites occupy just 2 km2 • Opportunity for “Aberdeen effect” – Careers, jobs, universities, research, – Economic prosperity (Source: IoD calculations)
  46. 46. 46 Perspective on energy
  47. 47. 47 Two words begin with “e” and end with “y” We confuse them all the time
  48. 48. 48 What percentage of all energy we use is renewable? • 30%? • 20% • 10%?
  49. 49. 49 What percentage of all energy we use is renewable? • 30%? • 20% • 10%? <5% (DECC: 012 data)
  50. 50. 50 We still depend on fossil fuels Hydrocarbons = 87% Non-nuclear renewables < 5%
  51. 51. 51 Future mix for UK energy is gas, nuclear and renewables – but coal is still a factor in electricity (DECC: GHG Emissions 2012, issued March 2013)
  52. 52. 52 Gas is much more than “keeping the lights on” 55% of gas goes to heat and industry • 36% gas goes to heat • 36% of gas goes to electricity and associated uses • 19% to industry and other customers Use of Gas Heat Electricity Industry Other (Source: Department of Energy and Climate Change)
  53. 53. 53 The gas in this area alone could make a material difference (Source: IoD calculations) Potential Bowland contribution
  54. 54. 54 Gas is essential if we are serious about reducing CO2 emissions
  55. 55. 55 In terms of global CO2 emissions, coal and oil are significantly higher contributors Land use Coal Oil Gas Other Other: Emissions from cement production and gas flaring. (Global Carbon Project 2013)
  56. 56. 56 What can we learn, going forward? • Shale gas industry brings together sciences and arts – Geology – Physics – Chemistry – Biology – ICT (sector is a heavy user) • Energy is the lifeblood of all societies • Sociology • Psychology • Economics • Politics • Even history
  57. 57. 57 The UK is leading in new energy Besides being a leader in oil & gas… • A leader in wind • Innovator in tidal (Tidal Lagoons, 13 tidal streaming projects) • Innovator in Carbon Capture and Storage (£1B competition, two leadership projects) • We have to lead – we are an island nation
  58. 58. 58 Join the energy quest!
  59. 59. 59 Thank you

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