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More Deception From UKOOG

14th January 2017



UKOOG'S New Report on Fracking 10th January 2017

The press release highlights the assertion that 500 wells could reduce imported gas by 50%. This is so vague that we can't take that seriously, we have to look at the report itself. The interesting thing is the proposal of a scenario of 7-11 wellpads in a 10 km square, with ten wells per pad. This is, of course, wildly different from Cuadrilla's boast of up to 40 wells per pad, with 80-100 pads in PEDL165. On the UKOOG scenario Cuadrilla would need a mind-boggling 400 wellpads to provide 4000 wells, incidentally the figure that UKOOG estimate as necessary for the whole country. Impossible.

The press release is careful to state the ten well pad is only one scenario, but surely this is an indication that UKOOG do not perhaps themselves believe Cuadrilla's claim to be able to drill 40 wells from one pad. It certainly indicates they are not prepared to promote this as a scenario, surprising as it would help to promote their argument.

Equally or more significantly, what the press release claims is that rigs are on a site for a matter of weeks. In the case of PNR Cuadrilla say the first well will take five months to drill the first vertical and 3 months for a horizontal, and 3 months for each subsequent combination i.e. a total of 17 months. Ten wells on a pad would according to this take nearly three years. It is noted that the claim of weeks per pad is NOT contained within the report itself, it is a fiction of the press release. In addition, of course, we have the fracking itself, which in Cuadrilla's case is expected to take two months per well. So for a ten well pad that adds up to 35 months of drilling plus 20 weeks of fracking, 55 months or over four and a half years. In fairness in one place the UKOOG report does quote a year for a US pad completion, but admits that in the UK initially we will see longer times. Yet in another section the report clearly states for a pad "the drilling rig might be in place for the first few YEARS of operation". Regardless of which of the report accounts we believe, the press release talking of "weeks" is clearly a fabrication.

If drilling time can not be reduced significantly, this means we have to take the claim of reducing gas imports significantly (eg by 40% by 2025) with a pinch of salt. No way will pads be completed at the rate of 25 per year yielding 140 fully operational and producing pads by 2025, as the report suggests. The drilling time is only one factor affecting UKOOG's optimism. Planning constraints and community action against the prospect of fracking will make UKOOG's predictions unlikely. The introduction to the report makes a claim which is patently challengeable. Regarding shale production "It has been agreed by independent experts that this can be done safely, with respect and protection for the environment and with minimal effect on the communities that we will operate in". I doubt very much whether UKOOG could uphold that statement if challenged by a complaint to the ASA.

On the detail, firstly, UKOOG show an image of a wellpad they say is 200x100m (2 hectares). Yet their own photograph on the title page shows not only the wellpad itself but an ancilliary area plus access road. UKOOG have conveniently left out additional areas such as this from their 2 hectares per pad claim. They have left out consideration of other infrastructure necessary to support wellpads, including compressor stations. In Cuadrilla's PNR case, Cuadrilla not only have used 2.6 hectares for their site but achieved permission for around 90 seismic monitoring stations. Each of these measures 20m by 20m, or 400 square metres, and that excludes track access. 90 such stations themselves therefore will eat up another 3.6 hectares of countryside. The PNR pad is taking at least 6.2 hectares, three times the UKOOG claim. UKOOG also forget that all wellpads need connection to gas mains, requiring more upheaval, and, unless they are on a water main already, construction work to connect to water main, or face imposing huge numbers of traffic movements on local communities.

Moving on to their well estimates, UKOOG are using an estimate of 4bcf for the lifetime output of a well (over 20 years). The source they use for this is a US industry conference paper which is behind a paywall. The figure of 4bcf is higher than any EPA or USBGS average I have seen, and higher than the estimate used by the Institute of Directors in their notorious reports paid for by Cuadrilla. the Marcellus formation is the most prolific of the US production areas and is not representative, and there is no guarantee that such high estimates can be relied on in the UK. But even if we use UKOOG's new figure, there is difficulty in relating their well number claims to their import reduction claims.

UKOOG claim that US wells are usually closed after 20 years when they become uneconomic. But there is no reference quoted to support that, unsurprising as shale gas drilling is not old enough for such quotes to be more than estimates. It is suspected UKOOG have used a lifespan figure from conventional wells. According to a 2014 paper in Oil and Gas Journal, the best established estimates are for the Bakken formation, where the average life of a well has been 6 1/2 to 7 years. And a further consideration is that the life of a well is affected by economic factors. It is generally accepted that fracking will not be carried out as cheaply in the UK as in the US. If we take the 25 pads built per year scenario, resulting in 140 pads by 2025, these 1400 wells would in their lifetime produce (according to UKOOG's optimistic estimate) 5.6 tcf of gas. But by 2025, because of the sharp decline in shale well output after one year (estimated at between 60% and 80% drop), most of these wells would be played out by 2025. A further 240 wells up to 2035 might have helped produce a contribution to be set against import requirement, but by 2035 the vast majority of the wells drilled would no longer be economic. The UK would have to start all over again, with (assuming no drop in gas demand and imports accounting for 80% of demand) new drilling required of 4500 new wells to maintain the ambition of shale providing 50% of import requirement, not 100 additional wellpads but 450 by 2050. If we use the Cuadrilla./IoD estimates for well lifetime output we would need some 830 wellpads in total, if we use the US official figures from their geological survey or environment agency for EUR we could need a whole lot more.

Whatever the argument regarding pad and well numbers, the fact remains that if we believe the UKOOG figures, imports will rise to 80% This is a huge increase on today’s figures. It means even if we achieved to reduce this by half through shale gas, The gap left would still leave the need for 40% of our gas usage to come from abroad. This is not in any material way reducing our dependency on sources outside the UK. There is only one way to reduce our dependency, by increasing domestic electricity generation through alternative (greener) sources, and reducing our gas demand. The former requires a change of government policy. The latter is not a pipe dream. The official government figures show a downward trend in energy consumption over the last ten years. These are the priorities, not shale gas.

The main complaint, however, of the report is that it does not do what it says on the tin, or at least it does not do what the press release says. It does NOT show limited impact on the countryside. It focuses only on one aspect, visual intrusion. It brushes off environmental and social impact.

Even within its own parameters it picks an easy target, onshore windfarms. This is more significant than minor quibbles. But quibbles thgere are, for example the Mackay visual intrusion assessment (a blog entry not a peer-reviewed and published report) is based on a low rig height, and even using a minimum drill height Mackay says in the same blog from his look at only the three onshore options - there is NO "energy source with minor all-round enviromental impact". Mackay also notes if water is not available piped to a shale wellpad, shale gas results in the highest figure for traffic movements, and that for shale gas to be low-carbon electricity generation it would require additional plant, specifically new CCS power stations, which would add an extra 1.8 hectares to the shale pad footprint, nearly doubling the land take of 2 hectares.

In summary? This is one more misleading promotional article which in my view is challengeable on a number of accounts. But it raises the additional issue of the UKOOG scenario being in serious conflict with Cuadrilla’s. Personally I don’ty believe for a minute Cuadrilla are capable of 40 well wellpads They have yet to show competence in drilling one.

Press release
here

The report
here