Last week, British Geological Survey finally published its assessment of what could be the most promising shale play in the UK … the Bowland-Hodder. However, the US Energy Information Administration has also published figures for wider area of the British Isles as part of a much larger global assessment.
The “risked”, technically recoverable shale resources in Britain are estimated by the EIA to be 26trillion cu.ft. of shale gas and 700million barrels of shale oil in two assessed regions. This is based on the much larger unrisked estimates of 623TCF (134TCF, risked) and 54billion barrels (17billion barrels, risked).
These estimates reflect only the higher-TOC (total organic carbons) of the Carboniferous and Jurassic shale intervals.
Compare this with BGS’s numbers, which suggest the Bowland-Hodder alone could hold from 822TCF (P90) to as much as 2.281quadrillion (2,281TCF) . . . P10 case.
Initial exploration drilling has confirmed the presence of thick, gas-bearing shale deposits in the Bowland Sub-basin in the west portion of the Pennine Basin of north-west England.
The EIA, which used consultants ARI to carry out the research, said the latest estimate of the UK’s shale gas resources is about 10% higher than its initial 2011 assessment. BGS’s figures appear to be based on only marginally newer data. Assuming both EIA/ARI and BGS used credible methodologies, it is hard to explain the massive difference between them.
The Pennine Basin, one of the most prospective areas, has been tested with five vertical wells which cored the Carboniferous Bowland shale.
Other prospective areas include the rest of the North UK Carboniferous Shale region and the liquids-rich Jurassic Shale region of southern England in the Wessex and Weald basins.
Shale testing is still at an early stage, in part because of issues associated with hydraulic fracking of a well, Preese Hall-1, drilled in the Bowland Shale by Cuadrilla, which led to localised earth tremors near the holiday resort Blackpool.
Following an 18-month moratorium, the Government concluded that the environmental risks of shale exploration are small and manageable. Shale drilling was allowed to resume in December, albeit with stricter monitoring controls. Current shale operators include Cuadrilla Resources, IGAS and Dart Energy. Centrica is also entering the quest via a deal with Cuadrilla that will give the energy major a 25% stake in the Bowland Shale.
Despite the huge North Sea offshore industry, Britain’s onshore oil and gas sector is small and this currently limits the shale hunt. A further challenge is that geologic conditions are much more complex than in the US. Then there is the issue of opposition from the public.
EIA notes: “Political opposition to shale development is greater in the UK than in Poland but less than in France or Germany.
“Hydraulic fracturing got off to an abysmal start. The UK’s first shale production test well triggered small local earthquakes during fracture stimulation and the vertical wellbore was deformed.
“This is perhaps unsurprising given the highly faulted nature of shale deposits in the UK (and generally in Europe).”
Eighteen months ago, in January 2012, BGS said the risks of shale development to groundwater and earthquakes had been exaggerated.
It was stated that minor earthquakes caused by Preese Hall-1 were “comparable in size to the frequent minor quakes caused by coal mining”. Moreover, they originated much deeper in the crust so have all but dissipated by the time they reach the surface.
According to the EIA, none of the approximately 50,000 horizontal shale wells drilled in North America during the past decade have generated significant earthquakes, although a few suspected seismic events are under review
Cuadrilla’s consultants concluded that excess fluid pressure exerted on the fault during the hydraulic stimulation overcame the rock friction containing this stress, which enabled the fault to slip and generate small earthquakes. Simultaneously, bedding plane slip up the hole caused the well’s casing string to deform.
Despite the Government lifting its fracking moratorium in December, Cuadrilla recently delayed its plan to resume fracture stimulation until next year at the earliest.
In the UK today, there are currently 334 Petroleum Exploration and Development licences (PEDLs) issued of which several dozen have recognised shale potential. However, proprietary shale data typically are kept confidential for a four-year period from the date of well completion.
At least six companies are targeting shale gas exploration in the UK but only two have actually drilled wells … all vertical.
Cuadrilla, which is 43% owned by Australian drilling company AJ Lucas, is the most active, drilling and coring four shale exploration wells in the West Bowland Sub-basin that confirmed the presence of up to 2km of gas-bearing organic-rich shale. At least one well encountered active faults and high-stress conditions. Cuadrilla talks of 200TCF of in-place reserves in its portion of the Bowland of which 10% may be recoverable.
IGAS Energy has drilled a well nearby, coring the 490m thick Bowland Shale. This company’s independent consultant has identified a 1,195sq.km prospective area within an average 250m thick organic-rich interval, constrained by geophysical logs from eight conventional petroleum wells that penetrated the Bowland.
After drilling its first shale appraisal well last year, IGAS estimated the shale gas in-place (GIP) resources within its licences to be about 9.2TCF.
Horizontal shale wells have not yet been attempted in the UK, nor have flow tests been reported. This type of well is fundamental to the success of the US shale gas industry.
Coastal Oil and Gas, Celtique Energie, Dart Energy, and Eden Energy also are evaluating their UK shale resource potential but haven’t yet drilled.
In summary, the Bowland is the only active shale drilling region in the UK, has had five shale exploration wells drilled to date. The main operators are Cuadrilla Resources (4 licences totalling 1,185sq.km; four wells), IGAS Resources (14 licences; 1,363sq.km; 1 well), and Dart Energy (11 licences; 1,041sq.km).
Another area of the UK examined by the EIA but not BGS lies in southern England in the Wessex and Weald Basins.
Celtique Energie has reported that the Liassic shale on its Weald Basin licences ranges from 2,745m to 3,960m within a 467sq.km prospective area.
The company estimated that the Liassic could have mean recoverable shale oil and shale gas resources of 125million barrels of oil and 10TCF of shale gas.
The EIA briefly covers the Forth-Clyde valley, referring to the presence of shales, but zero mention is made of the now defunct shale oil industry. BGS does, however, cover this.
Bathgate works, established in 1851, was perhaps the first site in the world where mineral oils were processed on an industrial scale. From this blossomed an extensive oil industry that competed successfully against cheaper imported petroleum for many years, and continued in operation until 1962.