U.K. Tackling the Pros and Cons of Shale Plays

As shale gas E&P morphed from boomlet to outright boom in the United States, shale deposits around the globe began attracting considerable interest for potential production of hydrocarbons.

Europe, in general, appeared poised to go all out to develop certain known shale beds.

“Britain is less used to oil and gas exploration onshore activity, and these very small tremors caused so much alarm.”

Speculation was rife that the Silurian-age shales in Poland would prove to be a major supply of highly desired natural gas from the homeland.

Some companies quickly began to focus on exploring and drilling these shale zones, but regulatory issues and some disappointing drilling results soon tempered the initial enthusiasm.

France placed a total ban on hydraulic fracturing, which is crucial to shale development. The United Kingdom initially followed suit with its own ban.

The good news, however, is that the U.K. Department of Energy and Climate Change (DECC) lifted the moratorium in December.

The DECC also announced it would establish an “Office for Unconventional Gas and Oil” to assist with expediting regulations, including those related to hydraulic fracturing.

The rumor mill is churning, and there’s even mention of tax breaks to encourage shale gas development.

It all sounds promising, but it likely will be a bumpy road between here and there.

Yes, the fracturing ban was lifted, but other obstacles – environmental assessments, public consultations and more – likely will restrict new drilling activity to a snail’s pace for some time to come.

Blackpool’s Allure

One area attracting operators’ attention in the United Kingdom is the region enveloping the coastal resort town of Blackpool in northern England’s Lancashire County.

The area lies within the Carboniferous Northern Petroleum System (NPS), which is one of the United Kingdom’s two major petroleum systems. The other is the Mesozoic Southern Petroleum System.

The NPS is a complex, multi-faulted array of carboniferous basins and uplifted highs for the most part, according to the U.S. Energy Information Agency’s “World Shale Gas Resource: An Initial Assessment of 14 Regions Outside the United States – January 2011.”

The NPS boasts a 100-plus-year history of hydrocarbon exploration. The result: Several large oil fields have been discovered, reportedly containing more than two billion barrels of oil-in-place.

The main source rock is the marine Namurian Bowland Shale, which has an average depth of 4,800 feet in the prospective area. It’s organically rich, with total organic content ranging from 1 percent to 10 percent and averaging 5.8 percent, the EIA 2011 assessment noted.

Cuadrilla Resources received a license to explore in this region in 2008, ultimately discovering gas in the Bowland shale close to Blackpool at a depth of 4,000 feet.

Trouble soon came knocking.

The initial hubbub – and ensuing ban – surrounding hydraulic fracturing in the United Kingdom was triggered when a couple of minor earthquakes occurred in this area in the spring of 2011 coincident with fluid injection into a nearby well being operated by Cuadrilla.

“These were very tiny seismic tremors, and only 50 people felt the larger one,” said Mike Stephenson, head of energy for the British Geological Survey (BGS) and director of the Nottingham Centre for Carbon Capture and Storage.

“But Britain is less used to oil and gas exploration onshore activity,” he noted. “and these very small tremors caused so much alarm.”

Stringent Controls

Stephenson emphasized that the recent lifting of the hydraulic fracturing ban is conditional on a number of highly stringent controls. One of these entails use of a triggering mechanism indicating whether a well causes an event above a certain size, dictating that the operator must cease the fracturing procedure.

Cuadrilla estimated there may be as much as 200 Tcf of shale gas waiting to be tapped in this region – but more drilling is needed to determine how much of this resource might be recoverable. The company essentially has been waiting for the fracturing regulations to change.

Various outlets reported that the BGS attributes 300 Tcf to the Bowland Shale in the Bowland Basin east of Blackpool.

Not so, according to Stephenson.

“That number was just made up by the press and is just speculation,” he said. “Essentially, we’ll produce a range of figures because of the uncertainties involved.”

The definitive word will be available soon.

At press time the DECC was readying to release a report on the shale gas reserves.

Given the big resource numbers being tossed around, it’s to be expected that big players appear eager to stake a claim.

ExxonMobil is chatting with United Kingdom hydrocarbon producer Igas Energy about possibly taking a stake in Igas’ Bowland Shale gas project in Lancashire.

Don’t be surprised to see a bidding war given that other large players are said to be eager to muscle their way in as well.

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