Saturday, 24 August 2013

Fracking for Beginners (Part Two)

In Part One, we examined the basics involved in setting up a well site and the impact on local communities. This time we have a closer look at fracking and the possible impact the process has on the environment. If you have not read Part One and only have a vague idea what happens on a well site, you would be well advised to read that one first then come on back here. I have tried to keep technical terms to a minimum but unless you know what the basics are, some of what follows below may be lost.

As stated in Part One, a well bore is cased and cemented and this is no small thing as the cost of casing is often as much as fifty percent of the entire well. Usually that is enough to prevent sub-surface fluids migrating up the outside of the casing and reaching upper rock layers or even the surface. This is still important whether a well is to be fracked or not. Unfortunately not all cement jobs are tip-top. On a well offshore Angola, I once identified a zone devoid of cement, over which the client intended to perforate the well. If they had done so, at best some oil would have been wasted as it migrated up the outside of the casing and into upper formations. (Not that I got any thanks for telling them of course, you’re welcome). Bad cement jobs can be fixed though. After cement has been allowed to set, acoustic logging tools should be run, which will tell the company whether their casing has a good bond with surrounding rock. If it is found that there is bad cement contact, the well can be repaired (known in the business as a “squeeze job”). Of course, this is an extra expense but given the risk to surface waters, a necessary procedure. Thus the wells used in fracking should be surveyed for cement bonding and repaired if necessary. In addition, it is standard practice that all cased wells should be pressure tested to prior to being perforated to ensure structural integrity. It cannot be emphasised enough as to the importance of the casing and its bond with the formation.

Fracked wells are different from standard wells though insofar that in a usual reservoir, the oil and gas has already migrated from a source rock and have been accumulated naturally. So when a well bore pierces an accumulation, there is only one way for the hydrocarbons to go – up the well. An artificially fractured formation on the other hand releases its gas and it goes in the direction of low pressure – into the well bore again or, if the pressure difference is not enough, upwards. After all, gas and oil are less dense that water and therefore floats, even up through a column of rock unless it meets an impassible barrier. It is suspected that this has been the issue in Pennsylvania where some fracked wells have been accused of polluting water supplies. In those cases, the wells have been extremely shallow, less than half a kilometer deep, so it can easily imagined that extra release of gas would rapidly make its way to surface. One of the problems with the US is that there was no measured baseline that could tell consumers what was in their water before fracking started so it cannot be ascertained what levels of natural gas were making its way to the surface before fracking began. That should not be the case in the UK where water supplies are well monitored and companies ought to know already what is coming out of our taps.

If I might be allowed a digression, I would like to illustrate the point of gas migration. Natural gas (methane) is produced from both shale rich in organic content and coal. As you know, accumulations of methane in a coal mine are extremely dangerous so the British Coal Board used to syphon off the methane and it would end up in the national gas grid, providing the tax payer with a nice little extra income. When the mines closed, so did much of the gas collection associated with them. That means for nearly thirty years now, that gas has just been naturally dissipating up through the surface layers and into the atmosphere. What a waste, especially since methane is ten times more potent than CO2 as a greenhouse gas.

This small tale of woes illustrates however that gas migration is a natural event. With this in view it would be unwise to frack shallow formations. Gas from deeper formations has far more chance of being trapped against higher, impermeable layers of rock. The same can be said for the fracking fluid. A shallow target is far more likely to pollute shallow ground water. It has to be pointed out though that deep ground water has often been down there for millions of years and as a result can be pretty nasty stuff itself, often rich in salts and dissolved metals. Any fluids coming to surface from the well bore will have to be treated as industrial waste. I believe at this time most of it is reused in the drilling / fracking process. Of course, fracking water is unlikely to migrate as quickly as gas but one must be alert to the possibility. Such risks have already been recognized by the British Geological Survey; in their paper THE UNCONVENTIONAL HYDROCARBON RESOURCES OF BRITAIN’S ONSHORE BASINS - SHALE GAS certain potential targets in Midlands have already been ruled out of development owing to their near-surface position. Drawing on analogies from the USA, the BGS have identified that potential target shales should be at the depth of at least 1000m, with most of them being a lot deeper.

Earthquakes have also been fretted over as a potential threat from fracking. Let me be very clear: fracking causes earthquakes. In fact, almost by definition, fracking is the artificial inducement of localized earthquakes but of a magnitude so small as to be undetectable by human senses. The recorded earthquakes caused by fracking activity, those nearby Blackpool in 2011, were of magnitudes 1.5 and 2.3. My theory of what happened is that the fracking pumps introduced additional energy into a system that is metastable. What does that mean? Let me illustrate it by comparing it to settling alight a lump of coal. If one was to strike a match under a coal and expect it to burn, it will be a cold night. There isn’t enough energy to start detaching the hydrogen atoms from the carbon – it is this breakage that releases additional energy in the form of heat. So a fire of tinder then of wood kindling is built up first, then the coal is introduced. The energy now available is enough to set up a chain reaction in the coal and release the energy within. It is the same principle with the Blackpool earthquakes – energy which was stored up in that part of the earth was released when the addition energy from the fracking was introduced. So can it happen again? The answer is yes. It should however be put into context.

A couple of years ago I was in a hotel in Haifa when, closed to ten o’clock in the evening, my bed started to sway gently. At first I thought I was imagining it but no, it really was happening. After ten seconds or so it stopped. I had just survived my first earthquake. It was a magnitude 5.5 with the epicenter in Cypress where it measured 5.9 on the Richter scale. Although no longer used by geophysicists, the Richter scale remains the public benchmark of earthquake intensity. It is logarithmic, which means a magnitude 2 earthquake is ten times more powerful that a magnitude 1, and likewise a 3 is ten times stronger than a 2. So that 5.5 Haifa quake was 2000 times stronger than the Blackpool earthquake at 2.3 on the scale (10x10x10x2). What is accounted as a large earthquake, a magnitude 7, would be 70,000 times stronger and the Tōhoku earthquake in 2011, which led to tragic Japanese tsunami and the destruction of the Fukushima nuclear power plant, was a magnitude 9.1 (8x10x10x10x10x10x10), eight million times stronger that the strongest Blackpool event. The energy involved in such large events are almost beyond human imagination; certainly beyond all nuclear arsenals owned on the entire planet. Wikipedia gives it at 600 million times stronger that the atomic bomb that wiped out Hiroshima and fair play to you if you can encompass that in your imagination because I cannot. I can see though that the energy provided by thirty or so pump trucks used in fracking is miniscule by comparison. That is not to say though that we are totally in the clear however. A recent paper in Science suggests that larger earthquakes far from fracking sites could trigger smaller but still quite powerful (magnitude 4 to 5) quakes around fracking sites, along the principle of the extra energy introduced could lead to greater local instability. If that is the case there is still the possibility of some damage to property. On that basis, it would be sensible for the government to ensure that license holders are suitably insured to cover potential claims.

None of this answers the basic question of “Does the UK need fracking?”

The graph above is based upon figures from the Department of Energy and Climate Change and is worth a moment’s consideration. The first peak in oil production (in blue) coincides with the miners’ strike of the 1980s and the subsequent need to pay the resulting unemployment and disability benefit, as well as replace coal as Britain’s major source of fuel. This replacement of coal also explains the “dash to gas” (in red). Giving up coal though is not a bad thing as far as greenhouse gases are concerned because of all the fossil fuels, coal is the dirtiest. As is painfully clear from the graph, production from the offshore has been consistently falling from the turn of the century and despite the promise of new finds in the future, this trend will continue unless new sources are discovered. At this time, coal still makes up 30% of how our energy is produced and coal imports are rising, as are imports of both oil and natural gas. From its peak in the late 1990s, UK oil production is down 67% and gas has fallen 66%.

New sources should certainly not be restricted to hydrocarbons. In government figures published in 2012, the UK is slightly under-achieving on our renewable targets but I would make the point that if the focus of both private and public investment is switched purely into fracking, the nation will miss the modest target of fifteen percent renewable energy by 2020. The current total of wind and solar is 4.5%, with the remaining five percent being made up by hydro-electricity. Germany on the other hand is looking towards a 35% target for renewables by 2020. Cynics might say “Good! Let Britain compete with cheaper energy costs” but the retort is “what happens when the hydrocarbons run out?” Germany will have already made the investments necessary to keep the lights on and the factories working.

Another important question is will fracking result in cheaper energy? I doubt it; the promise of free electricity was first made with nuclear power in the 1950s. What will definitely happen, if the promised levels of gas can be produced, is that price-rises will be slowed. It is simple economics, demand for energy is rising globally but meeting some of that demand locally will give some counter-balance to that trend. Nuclear power will also have a role to play in the future as it is clear that Britain’s old nuclear power stations are at the end of their respective lives. I am no fan of nuclear energy (mainly for its waste and the weaponisation of by-products) but the new generation seem to offer less waste and there is potential in thorium-based technologies, which is easier to obtain than uranium and far less useful to designers of nuclear weapons.

At this time it is not possible to know how many new jobs will be created due to fracking because, as I pointed out in Part One, it is impossible to know for sure what is down there until the hole is drilled. It is known though that at this time about 85,000 jobs are linked to offshore work and that we are an aging workforce. Certainly those with technical skills, engineering and science-based degrees will be demand by both the fracking and renewable industries. This has the potential to be a golden time for UK colleges and universities but one can be sure if the people here do not possess the necessary skills, the posts will be filled somehow.

The government should not leave it up to private companies to enforce their own safety standards, especially when the results of a large accident are so potentially damaging, in terms of the danger to human life and environment yes, but also in terms of public relations. Few blowouts that occur offshore make it into public consciousness but it would not be difficult to imagine the outcry if images of a well out of control on land would make on the television screens. Cuadrilla, the main player in the infant UK fracking field at this time, claim on their website they are subjected not only to careful planning regulations but also to unannounced site visits. I sincerely hope that public staff in this area has not been cut back in recent years because if the projections for the number of wells are accurate, there will be a need for a knowledgeable and well-funded (no pun intended) governmental inspection regime.

While on the topic of government intervention, I am somewhat nonplussed by the Conservative’s tax break for fracking companies and the reason for my puzzlement is this: despite the fact it is in its infancy, drilling on land is much cheaper than drilling offshore. Rigs are less expensive to rent than their offshore counterparts and the logistics are far easier. So why would companies need large incentives to open up land operations and in comparison making offshore investment less attractive?

During a Twitter exchange and subsequent blog, a friend offered the view that the Conservatives were pushing for fracking purely to preserve the South East from development by renewables such as wind farms. I thought this “wonderfully cynical” until proved wrong the very next day by Lord Howell speaking in Parliament. What is evidently clear is that the whole issue of energy supply is too important for short-term politics. A single technology does not hold the key to securing our energy future. It is vital that as much investment as possible is put into renewables now; to look ahead to 2050 still relying primarily upon fossil fuels would be irresponsible in the extreme. Nuclear too will have a role. When it comes to electricity generation, gas-fired power stations are the cleanest option that fossil fuels gives us so fracking will play an important part in making our greenhouse gas targets by replacing coal. Wide-scale activity such as fracking and renewables could also herald the re-industrialisation of the United Kingdom.

But maybe people prefer to leave the money-making to the City and the global banks nowadays? If that is the case, let me know how it works out.


Anonymous said...

Think the 30% tax break is simply an onshore extension of the offshore, small field tax break, and, as offshore amount taxable increases with size of field.

Martin Veart said...

I can see the logic of that tax break for offshore fields and I appreciate the explanation! Thank you.

Martin Veart said...

An update on regulation and inspection. I read that the government are in talks with Norwegian company DNV to provide the necessary inspection regime. If confirmed, this is good news. DNV are a well-respected global company and in my personal experience uphold the highest standards.