Managing environmental risks from shale gas exploration – the UK’s experience so farDr Tony GraylingHead of Climate Change and CommunitiesEnvironment Agency of England and Wales

Bulgarian Energy ForumSofia, 11-12 December 2012

Overview of presentation

Current situation in the UK

Environmental risks and regulation

Next steps

State of play on shale gas in UKUK still at a very early stage: three wells drilled by Cuadrilla in Lancashire, one partly ‘fracked’Further fracking suspended for investigation of two small earthquakes at first wellIndependent review recommended fracking could safely resume with strict monitoring and controlsOther holders of petroleum licences showing interest, but have plans only for drillingToo early to speculate on reserves or possible production

UK Government perspectiveGas will continue to play a major role in UK energy on a path to decarbonisationIf it can be shown to be economic and safe, UK shale gas could offer a significant opportunityDepartment of Energy and Climate Change (DECC) will establish an Office of Unconventional Gas and OilTreasury consulting on tax regime for future productionAnnouncement on fracking expected shortly

Shale basins in Great Britain

Estimates of UK shale gas resourceBGS first estimate

150 billion m3 gas (recoverable resource) in Bowland shale – estimate made before any exploration

US EIA estimate

2,700 billion m3 gas in place in Bowland shale, of which 540 billion m3 technically recoverable;57 billion m3 gas in place in Weald/Wessex, of which less than half is technically recoverable

Company estimates

6,000 billion m3 overall estimate of gas in place for their concessions(c.f. UK annual gas consumption 90 billion m3)

Current proposals for shale and coal bed methane exploration in England and Wales

Five sites in Lancashire -

Cuadrilla Three sites in South Wales,

Neath, Maesteg, Llandow - Coastal Oil and Gas Ltd.

Woodnesborough, Kent + others?Coastal Oil and

Gas Ltd.

Possibly three sitesMendip Hills:

UK Methane and Eden Energy

Balcombe, W Sussex: Cuadrilla

Beverley Rathlin Energy

Public concerns

Energy firm Cuadrilla discovers huge gas reserves under Lancashire

theguardian

Shale gas drilling rig of Cuadrilla Resources near Blackpool. Photograph Christopher Furlong/Getty Images

GREEN Party leader Caroline Lucas is calling for licences for hydraulic fracturing, also known as fracking, to be withdrawn in the UK

Bath hot springs concerns on fracking proposal

Regulatory authorities in Great Britain

Department of Energy and Climate Change (DECC)Environment Agency (England and Wales) (EA)Scottish Environment Protection Agency (SEPA)Health and Safety Executive (HSE)Local Authorities (LA)

Regulation in Great Britain - exploration

DECC checks with HSE/EA/SEPA issues well consent

DECC: online well application for <96 hr testing

DECC: 90-day extended well test (EWT), if required, setting limit on hydrocarbons produced, vented or flared.

DECC: award of exclusive Petroleum Exploration & Development Licence after open competition

Local Authority Planning Permission

HSE 21 day

Notification/ Well integrity

EA/SEPA • Notices• Abstraction licences• Discharge & RSR permits

EA/SEPA Statutory Consultee

Exploration Well

Clean water

Possible Aquifer

Confining Layers

Water Table

To river or STW

Gas emissions to atmosphere

Well padStorage tanks

Production Zone

Environmental risks of exploration

Contamination of groundwater due to

mobilization of solutes or methane

Contamination of groundwater due to poor well design or

failure

Fugitive emissions of

methane

Contamination of soil, surface or

groundwater due to spills of

chemicals or return fluids

Inadequate transport or treatment of waste waters

Impact on water resources from water used in

hydraulic fracturing

Inadequate transport or

processing of produced gas

Inadequate treatment/disposal

of drill cuttings

Environmental controls (England and Wales)Risk ControlsGroundwater pollution

Water Framework Directive and Groundwater Daughter Directive through the Water Resources Act and Environmental Permitting Regulations (EPR): Regulate discharges to groundwater, require disclosure of chemicals. Borehole regulations (HSE) also protect the environment.

Surface spills Planning regime for site construction standards. EPR regulates discharges to surface water and groundwater.

Disposal of used fracking fluid

Mining Waste Directive through EPR: Waste management plan must be approved by the Environment Agency. Euratom Treaty if naturally occurring radioactive materials, via EPR.

Over abstraction of water

Abstraction licensing under the Water Resources Act.

Fugitive methane emissions

Mining Waste Directive through EPR. Conditions under Petroleum Licences (DECC) for flaring and venting. Borehole regulations (HSE).

Environment Agency position

All exploratory shale gas operations will require environmental permitsCurrent regulation is adequate for small scale exploration, but keeping under reviewWe are looking at ways to streamline the existing permitting processWe continue to work closely with the UK and Welsh governments and other regulators

Next steps for the Environment Agency

Publish our guidance note setting out our approach to regulating exploratory activitiesDetermine permits for Cuadrilla sites in LancashireDevelop detailed technical guidance for operatorsStreamline and strengthen the permitting processDevelop our position for full scale development