Shale Gas Exploration Update July 2016

I promised to update you with any news on shale gas exploration. You may have recently read the Climate Change Committee report on shale gas that provides a detailed independent assessment of its compatibility with our commitments to tackle climate change https://www.theccc.org.uk/wp-content/uploads/2016/07/CCC-Compatibility-of-onshore-petroleum-with-meeting-UK-carbon-budgets.pdf Their assessment is that exploiting shale gas by fracking on a significant scale is not compatible with UK climate targets unless three tests are met: 

Test 1: “Well development, production and decommissioning emissions must be strictly limited.  Emissions must be tightly regulated and closely monitored in order to ensure rapid action to address leaks.” 

The Environment Agency, which is responsible for monitoring and mitigating risk associated with this kind of gas drilling, has undertaken extensive work and studies on the issue of methane leaking into the atmosphere as a result of gas extraction. Oil and gas operators must minimise the release of gases as a condition of their licence from the Government. Operators have to submit detailed plans on how they will minimise waste gases, including methane, and the Environment Agency carries out spot-checks and unannounced inspections to ensure that companies are complying with their plans. 

Minimising waste gases can include controlling emissions by using 'green completions', which is equipment that collects and separates the gas from the frack fluid, so that it can be handled separately. Green completions can reduce methane emissions by as much as 95 per cent compared to venting. 

Test 2: “Consumption – gas consumption must remain in line with carbon budgets requirements.  UK unabated fossil energy consumption must be reduced over time within levels we have previously advised to be consistent with the carbon budgets.  This means that UK shale gas production must displace imported gas rather than increasing domestic consumption.” 

With North Sea production declining, there is considerable room for shale gas to replace imported gas.  In its UK Future Energy Scenarios report, National Grid stated this week that the UK could be importing 93% of its gas by 2040. The report also points out that the cheapest way to create low-carbon hydrogen is from gas with Carbon Capture and Storage (CCS), and I fully support efforts to develop this technology.   

Test 3: “Accommodating shale gas production emissions within carbon budgets.  Additional production emissions from shale gas wells will need to be offset through reductions elsewhere in the UK economy, such that the overall effort to reduce emissions is sufficient to meet carbon budgets.” 

The report states that with a high level of shale gas production, fugitive methane emissions would be around 11 million tonnes of CO2-equivalent per annum in 2030.  This is around 3% of the average annual allowance in the Fifth Carbon Budget period (the Fifth Carbon Budget recommends a level of 1,765 million tonnes of CO2-equivalent for 2028-32, an average of 353 million tonnes a year).  The Government has confirmed its commitment to meeting the Fifth Carbon Budget, and at up to 3% of the total, shale gas emissions can be accommodated.   

It should also be stressed that emission from UK production of shale gas are included within the carbon budgets, whereas emissions from the production and transportation of imported gas are not.  Therefore, shale gas does not add to the UK’s overall carbon footprint – indeed the report confirms that lifecycle emissions from shale gas are slightly lower than from imported LNG. 

I will continue to press the government to make sure that shale gas exploration meets our climate change obligations. If it is clear that exploration cannot be carried out whilst staying inside acceptable environmental limits then I will call for a moratorium.

 

Kevin Hollinrake MP