DECC Publishes Report Advising UK Government on Hydraulic Fracturing

This post was written by Lynne Freeman and Laura Riddeck

A report commissioned by the Department of Energy and Climate Change (DECC) advising the UK Government that the controversial process of hydraulic fracturing, or “fracking”, should be allowed to continue, was published today. This is likely to thrust the process back into the spotlight, with Cuadrilla Resources Ltd likely to resume its activities and other companies to look to get a piece of shale gas action.

Background

Cuadrilla Resources Ltd began using fracking to explore sites for shale gas in Lancashire, north England, in March 2011.In April and May 2011, however, two seismic tremors were detected in the Blackpool region. These were immediately suspected to be linked to fracking processes in wells operated by Cuadrilla during exploration of a shale gas reservoir. As a result of the tremors, operations were suspended and Cuadrilla commissioned a number of studies examining the relationship between the fracking operations and the seismic activity.
 

Findings & Recommendations

Cuadrilla’s report, published in November 2011, found that:

  • The seismic activity was caused by direct fluid injection into an adjacent fault zone during the treatments. The fluid injection reduced the normal stress on the fault, causing it to fail repeatedly in a series of small earthquakes. The fault location, however, was not identified.
  • The maximum likely magnitude resulting from a similar treatment is estimated as 3.0 ML. An event of this size is not expected to present a significant hazard.
  • There is a very low probability of other seismic events during future treatments of other wells.
  • The potential for upward fluid migration was considered low. In the worst case, fluid could migrate along the fault plane, but this would be limited due to the presence of impermeable formations along the Bowland shale.

Subsequently, the DECC commissioned a further report to review these findings and advise the government on the risks posed by fracking. The report agreed with the main conclusions of Cuadrilla’s study regarding the nature and mechanism of seismic activity, but had two concerns:

  1. The probability of future seismic tremors: The report considered that there is not enough data to justify from a simple statistical analysis of the geomechanical situation that there is a low probability of encountering a similarly unique scenario in any future wells; and
     
  2. The potential for upward fluid migration: The DECC considered that this was overstated in the initial studies, based on micro-seismic shale gas data from the main US plays. Further analysis seems to indicate that fracture containment was good, with little vertical height growth. However, the DECC report states that it is difficult to reach any concrete conclusions without confirmatory information from fracture diagnostics.

This long awaited report concludes that the risks posed by fracking are relatively small and that the use of fracking in shale gas exploration should be allowed to resume. However, the DECC have advised that several precautions should be adopted in order to mitigate the risks posed by fracking:

  • The fracking procedure should invariably include a smaller pre-injection and monitoring stage before the main injection;
  • Fracking growth and direction should be monitored during future treatments;
  • Future fracking operations in this area should be subject to an effective monitoring system that can provide automatic locations and magnitudes of any seismic events in near real-time; and
  • Operations should be halted and remedial action instituted if events of magnitude 0.5 ML or above are detected.

The report also published a best practice guide for fracking operations which is based primarily on experience in the US. This guide can be found at Appendix B of the report.

Reaction & Next Steps

Mark Miller, Cuadrilla's chief executive, welcomed the report and was quoted as saying: “We are pleased that the experts have come to a clear conclusion that it is safe to allow us to resume hydraulic fracturing, following the procedures outlined in the review.” He said that Cuadrilla had already begun to amend procedures in light of expert advice.

However, implementing these recommendations is likely to add significantly to the cost of drilling operations. Some experts estimate it could be more than £100,000; others have suggested it could be many times that for each well. This may have a bearing.

The report is now open for a six week consultation period, with the DECC issuing a firm set of regulations after that. It seems likely that the government will follow the DECC’s recommendations in the report, and Cuadrilla will be able to resume its exploration in Lancashire in a matter of months.
 

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