Shale gas industry says Medact report fails to understand UK regulatory system and lacks credibility
30 March 2015
UKOOG, the representative body for the onshore oil and gas industry, has today responded to the report by Medact “Health & Fracking: The impacts and opportunity costs”.
Ken Cronin, CEO of UKOOG, said:
“Medact’s report fundamentally fails to understand the regulatory system put in place in the UK to cover shale gas exploration. The Medact report does not recognise the UK regulatory assessment and permitting process for onshore oil and gas which has been created to protect the environment and health; the authors ignore and fail to heed warnings by recognised experts of the dangers of incorrectly and inappropriately applying experiences from other countries to the UK; and the report is at odds with recognised, authoritative experts such as Public Health England (PHE) and the Scottish Government Independent Expert Scientific Panel on Unconventional Oil and Gas.
“The report concludes several times that fracking itself is a new activity. Even if you were to restrict the definition to high volume this is simply not the case.
“Furthermore we are concerned that Medact sent letters to councillors in certain regions with the conclusion of the report three months prior to the report being published. I urge those in local communities who wish to know the facts to read the independent scientific and peer reviewed work of expert organisations that have looked at the evidence in the context of the UK regulatory system.
“In addition we are concerned that Medact says it ‘declared no conflict of interest with regard to any of the issues discussed in this report’ yet three of the six chapters have contributions from a consultant who has produced studies for Friends of the Earth and is standing for parliament on an anti-fracking platform.”
Summary of key issues within the Medact report:
· The report fundamentally fails to recognise how health is already addressed through the regulatory assessment and permitting process in the UK;
o Ignores the founding principle and purpose of Environmental Impact Assessment (EIA) which is to investigate potential environmental effects that may pose a risk to environment and health at a development planning stage.
o Ignores the fact that environmental permitting exists to regulate industrial processes to ensure that they operate within defined environmental standards and a raft of wider regulations set to protect health.
· The report misunderstands the current regulatory regime in the UK particularly around well examination, environmental regulation, liabilities and local impacts both direct and cumulative (see appendix 1 for a thorough review)
· It is at odds with the conclusions of independent expert reports in the UK and Europe
· It uses inappropriate comparison with different projects, applying different techniques and practice, under different planning and permitting regimes on different continents
· Ignores the other uses of gas – including heat, where the UK is 84% dependent; feedstocks, which for example are needed to make medical equipment and medicines; and transport
There have been a number of truly independent reports published over the last 12 months, which include the report for the UK Government by Public Health England and for the Scottish Government by an Independent Panel of Experts. Both have concluded that in the context of UK regulation the risks are minimal:
“An assessment of the currently available evidence indicates that the potential risks to public health from exposure to the emissions associated with shale gas extraction will be low if the operations are properly run and regulated” Public Health England June 2014.
“Many of these social (and environmental) impacts can be mitigated if they are carefully considered at the planning application stage. Added to which there are already considerable legislative safeguards to ensure such impacts are not realised” Independent Panel of Experts for the Scottish Government June 2014.
Public Health England, incorporating the Centre for Radiation, Chemicals and Environmental Hazards (Wales) and World Health Organisation Collaborating Centre for Chemical Incidents (formerly the UK Health Protection Agency) is a recognised authoritative body.
UKOOG: Ken Cronin 0207 680 6550
Notes to Editors
1. Comparison of Regulatory Systems
One of the fundamental flaws of the Medact report is that it attempts to transpose situations in other countries onto a different regulatory system, geology and geography that exist here in the UK.
For example, there are a number of practices that are used in other countries that could never be allowed in the UK:
· The use of open pit lagoons to store fluids. This has the potential for not only fugitive emissions but also the endangerment of wildlife. As a result this practice is not allowed in the UK, where all fluids have to be contained within double skinned tanks sitting on protective bunds.
· In some countries flow back fluids have been used as dust suppressants on roads. Again this is a practice that is not allowed in the UK.
· Most of the studies from other countries lack the original baseline data for comparison with the current position making it impossible to identify if there is an issue or not. In the UK baseline monitoring, operational monitoring and post decommissioning monitoring are all standard practice and are now covered additionally by the infrastructure Act.
· All chemicals used in the UK have to be approved by the Environmental Regulator as being non hazardous to groundwater.
Independent reports comment on the risk of this transposition:
“Caution is required when extrapolating experiences in other countries to the UK since the mode of operation, underlying geology and regulatory environment are likely to be different.” Public Health England
“Evidence from active shale has and CBM (Coal Bed Methane) sites come particularly from the USA and Australia. Caution is required when trying to extrapolate evidence because these developments occur under very different regulatory and economic conditions than are likely in the UK. Therefore conclusions drawn from these studies should be only be applied to the UK or Scotland very carefully” Independent Panel of Experts for the Scottish Government
The Independent Panel goes on to note:
“the contrasts in geology and source material are such that fugitive emissions profiled from the US cannot be assumed to represent the Scottish situation”
2. UK Regulatory Regime
The Medact report completely misunderstands the regulatory regime in the UK. Appendix 1 discusses how environmental and health issues are addressed in the UK and outlines the regulatory system.
There is also a misunderstanding of how the regulatory system deals with well examination, liability and cumulative impacts.
Liability is covered in other sections of this document.
In terms of cumulative impact the local mineral planning authority, as directed by the recent Infrastructure Act, is under a duty to look at cumulative impacts. This position has not fundamentally changed.
We note the following inaccuracies in the Medact report:
· The Medact report states “Plugged and abandoned wells will be monitored for only one year after abandonment”. This is simply not correct. Permits issued by the environmental regulator for shale gas wells can only be surrendered once they are satisfied that any residual risk is sufficiently low to do so. The regulator can in effect require post abandonment monitoring for an indefinite period.
· The Medact report states “There is no mandatory and fully independent oversight of actual construction of wells and no provision for unannounced and appropriately frequent spot checks”. Again this is not correct. HSE inspectors have the authority to come whenever they please and do so on a risk basis.
· The Medact report states “Limited sanction regime in event of non-compliance”. Again incorrect: reference should be made to the EA website on sanctions for example sanctions up to and including criminal prosecution.
· The Medact report states “Detail about the quality, frequency, amount and comprehensiveness of pollutant monitoring is unclear”. Again wholly incorrect; details are all set out in Environmental Permits and the Environmental Management Plan that has to be approved by the EA.
There is a basic lack of understanding around process and regulations in how health is addressed within the planning and permitting system.
For all sites involving hydraulic fracturing in the UK an Environmental Impact Assessment (EIA) is completed and is used as part of the planning system in order to achieve planning consent and is also used in the environmental permitting system. Both these systems allow for significant public consultation and also involve public health bodies as statutory consultees.
The founding principle and purpose of an EIA is to investigate potential environmental effects that may pose a risk to health at a development planning stage. Equally environmental permitting exists to regulate industrial processes to ensure that they operate within environmental standards set to protect health.
An EIA is to investigate environmental effects that may pose a risk to health including environmental health pathways. Health pathways for example include air quality and water quality and therefore an EIA examines a health pathway before it becomes a public health issue
The regulatory system in this country and the best practices of the industry follow international standards around the source – pathway – receptor model, i.e. it is not sufficient to have a hazard source alone; there must be a source-pathway-receptor linkage – there must be a plausible means whereby humans may be exposed to the hazard in sufficient quantities to cause harm. For instance a harmful substance (source/hazard) may not represent a significant possibility (risk) of causing harm to humans (or other receptors) if:
· There is no pathway (exposure route) by which receptors (humans) may encounter the substance physically or
· The concentration of the pollutant in the environment is so low that the substance cannot be inhaled/ingested or otherwise absorbed in a dose big enough to cause an adverse physiological or clinical impact to humans
For example, approval by the environmental regulator for the use of chemicals in the UK will only occur if consideration of the likely concentrations and pathways from a source to a given receptor is minimal. This is also why the environmental regulator insists on the use of non hazardous products.
The Independent Panel for the Scottish Government summarises “ it should be noted that the existence of a potential problem does not mean it will occur. There are numerous regulations and assessments in place to reduce or eliminate adverse occurrences”.
The industry is regulated by four separate regulators and has to adhere to 17 EU directives and up to eight environmental permits that span before, during and after operation. In addition to this there are numerous points for public consultation during the pre-consultation, planning and permitting processes.
3. Baseline Monitoring
One of the major issues about the research in other countries is that there has been a lack of baseline data by which to properly compare operational results. The industry believes through the establishment of a scientific based and transparent Environmental Baseline Assessment, the embedded control measures can demonstrate that the protection of the natural environment and disruption to local community is minimised during hydraulic fracturing operations. UKOOG has worked with the industry to develop a set of guidelines for the establishment of environmental baselines; such guidelines enable a ‘site condition schedule’ to be established against which permits can be granted and monitored for compliance by the regulators. This guidance has been scientifically reviewed by an independent group provided by the Society for the Environment and is now backed by the Infrastructure Act.
A number of the independent reports caution that reports and research often do not look at all the contributory factors to the results of post operational monitoring activities:
“Environmentally associated disease is rarely a case of single hazard-single impact. In general, environmental factors are on of several factors that interact to determine the probability of developing a clinical illness.” The Independent Panel for the Scottish Government
This is why it is critical to obtain proper baseline and operationally monitoring results in order to really understand what is causing what.
4. Independent Reports
There have been a number of truly independent reports published over the last 12 months, which include the report for the UK government by Public Health England and for the Scottish Government by an Independent Panel of Experts. Both have concluded that in the context of UK regulation the risks are minimal:
“An assessment of the currently available evidence indicates that the potential risks to public health from exposure to the emissions associated with shale gas extraction will be low if the operations are properly run and regulated” Public Health England June 2014
“Many of these social (and environmental) impacts can be mitigated if they are carefully considered at the planning application stage. Added to which there are already considerable legislative safeguards to ensure such impacts are not realised” Independent Panel of Experts for the Scottish Government June 2014.
Public Health England, incorporating the Centre for Radiation, Chemicals and Environmental Hazards (Wales) and World Health Organisation Collaborating Centre for Chemical Incidents (formerly the UK Health Protection Agency) is a recognised authoritative body.
The European Parliament found that “possible health effects are mainly caused by the impacts of the relevant emissions into air or water,” but added that these are “potential effects” with actual effects “rarely documented”. Another European Parliament report concluded that: “No official or other reputable sources have demonstrated any systematic connection between shale gas and shale oil extraction and human or animal health." There have also been reports by the Royal Society and Royal Academy of Engineering and the Chartered Institution of Water and Environmental Management that have also concluded that risks are minimal and manageable.
UKOOG acknowledges that there are many reports in existence but cautions, as do independent experts, that many of the reports suffer from a number of issues including self-selection of sites, lack of peer review, size of surveys, leading questions, ignoring other influences within the same geography, anecdotal evidence and short term measurements against long term thresholds.
In addition many reports seek to rebut other reports. This must be very confusing and concerning for the general public and we therefore urge that reports from independent experts with no axe to grind are clearly the best route for the best information.
The Independent Panel of Experts for the Scottish Government commented:
“At the present moment in time many of these reports are ‘anecdotal’ in the sense that the observations have not been corroborated by objective study using factual evidence or properly quantified”.
5. Financial capacity and environmental liability
There are a number of measures in place to ensure that operators have adequate financial capacity which have been ignored by the Medact report.
The first set of these measures is at the licence approval stage. DECC’s guidance on operatorship states that the following assurances will be considered in applications for onshore operatorship: “In considering any request for operatorship, DECC will look at the competence of the company – more specifically the following factors: technical experience and capability to supervise, manage and undertake the proposed operation, their risk-assessment and hierarchy of decision-making, plans for public engagement and scope of relevant insurance coverage for operations and well abandonment activity. In some cases, DECC may request independent verification.”[i]
The second set of assurances is at the well consent stage. DECC’s “UK Petroleum Licensing: Financial Guidance” document states: “DECC’s policy requirement is to ensure that no well consents are issued unless we are satisfied that the licensee(s) has (have) access to sufficient funds to meet its(their) share of the actual drilling costs, the plugging and abandonment of the well if it is proven to be ‘dry’ or otherwise non-viable and a minimum contingency of 50% of the drilling costs.”[ii]
Secondly, there are a number of measures with respect to environmental liabilities that are worth highlighting.
The Environmental Regulator (EA in England, SEPA in Scotland and NRW in Wales) has the power to enforce the conditions in the environmental permits for a well or wells until the point in time that it accepts a surrender of those permits – the operator is not simply at liberty to hand back the permit. For England and Wales, the permit surrender process is agreed with the Environmental Regulator, and for wells that are hydraulically fractured this is likely to include the need for a period of aftercare and monitoring of any potential residual environmental impacts. The regulator may require the operator to supply a financial bond or other form of security for performance of its permit obligations.
With respect to the Minerals Planning Authority, planning consent for the site may also include planning conditions (which are legally binding) designed to ensure that the site is restored to its original surface condition at the end of operations.
DECC's consent is required under the terms of the operator's petroleum licence before a well can be decommissioned. The decommissioning process must be done in accordance with a specification agreed with the HSE, with reference to the Oil & Gas UK best practice on well abandonment and with the oversight of the HSE and an appointed Well Examiner.
If a well is not decommissioned in line with the approved plan, the licence holder or well-operator at the time of decommissioning can be prosecuted by the HSE for non-compliance with HSE regulations, and this could be pursued even after the petroleum licence and environmental permits have ceased to exist.
Taken together, if a company causes damage, harm or pollution to the environment, they can be required under these regimes to remediate the effects and prevent further damage or pollution. This is the same approach that applies to other industries. Environmental regulators and planning authorities have the power to require upfront financial bonds to address these risks. The industry does not wish to leave this to the taxpayer or the landowner. As a less expensive alternative to upfront bonds, UKOOG is working with Government on the development of an industry scheme that will step in and pay for liabilities.
Finally, the Infrastructure Act makes clear that landowners are not liable for any loss or damage which is attributed to the exercise of the right of underground access.
6. Use of Gas
The Medact report ignores the many uses of natural gas outside of power generation, the jobs that these industries support and the vital part it plays in all our lives:
· Heat: Natural gas is an excellent heating source and, per unit of energy, it is around a third of the price of electricity. It accounts for around 80% of UK domestic, commercial and industrial heating, with 84% of UK homes heated by gas.
· Food production: Natural gas is the main component of ammonia (the hydrogen (H) in ammonia (NH3) comes from natural gas), which is widely used in nitrogen-based fertilisers that are needed for food production. Nitrogen fertiliser was applied to 75% of all farmland (both crops and grass) in Great Britain in 2013.
· Manufacturing feedstock: It is hard to find a manufactured product where natural gas has not been used at some point in the production process. The most common process is the ‘cracking’ of ethane (which comes from natural gas) into ethylene, which is then used as a building block for everyday products such as food packaging, textiles, adhesives, tyres and window frames. More than 800,000 people work in the UK’s energy intensive industries and their supply chains. Petrochemicals are used to manufacture analgesics, antihistamines, antibiotics, antibacterials, rectal suppositories, cough syrups, lubricants, creams, ointments, salves, and many gels. Processed plastics made with oil are used in heart valves and other esoteric medical equipment. Petrochemicals are used in radiological dyes and films, intravenous tubing, syringes, and oxygen masks.
· Transport: Natural gas can also be used as a transport fuel, in the form of compressed natural gas (CNG) and liquefied natural gas (LNG). Compared with diesel, natural gas-powered vehicles emit less CO2 and fewer harmful air pollutants, and are quieter. Reading now has a fleet of CNG-powered buses, and there is great potential to expand the number of buses and trucks powered by natural gas rather than diesel.
Take into account that nearly 300,000 km of pipelines move the gas to more than 20 million British homes and businesses where it is needed, it becomes clear how important natural gas is to the UK and how deeply ingrained it is within society.
This becomes even more important when you consider that within 15 years over 70% of our gas will come from outside the UK potentially from areas where environmental safeguards are not as high as they are in the UK.
7. Climate Change
Whether shale gas development will actually reduce GHG emissions and slow climate change will depend on several variables, including which energy sources it displaces, including imports and the volume of methane emissions from the wellhead and in the gas distribution system.
According to figures from DECC, of the electricity generated in the UK in 2013 (where most recent figures are available), coal accounted for 36.3% and gas 26.8%. In addition, natural gas heats 84% of the UK’s homes.
When working towards a more decarbonised economy, the use of natural gas for electricity production forms a vital bridging fuel. This is a view shared by several influential bodies and individuals:
The United Nations’ Intergovernmental Panel on Climate Change (IPCC) Working Group 35th Assessment Report, published in April 2014 said “GHG emissions from energy supply can be reduced significantly by replacing current world average coal-fired power plants with modern, highly efficient natural gas combined cycle power plants or combined heat and power (CHP) plants, provided that natural gas is available and the fugitive emissions associated with its extraction and supply are low or mitigated”. Avoiding climate change will mean reducing coal use before reducing the use of gas.
The UK’s Committee on Climate Change, which advises the Government on meeting the country’s carbon reduction targets, concluded: “UK shale gas production would reduce our dependence on imports and help to meet the UK’s continued gas demand, for example in industry and for heat in buildings, even as we reduce consumption by improving energy efficiency and switching to low-carbon technologies.”
Stephen Tindale, a former director of Greenpeace, said in May 2014 that climate campaigners should support fracking for shale gas. He says that the reason for this is that the use of shale gas would enable the UK to reduce the burning of coal.
The recent report from the Lord’s Economic Affairs Committee on shale gas and oil, which looked at extensive evidence from all sides, concluded “We consider that development of shale gas in the UK is compatible with the UK’s commitments to reduce greenhouse gas emissions. There is an acknowledged role for gas in the UK’s energy mix as it moves towards fulfilment of its commitments. The carbon footprint of home-produced shale gas would be smaller than that of imported LNG (which needs to be processed and transported). Substitution of home produced shale gas for imported LNG should therefore make a positive contribution to achievement of the UK’s commitments on climate change.”
The findings of the IPCC made in the recent Fifth Assessment Report are also relevant. In this report, the IPCC states that “in mitigation scenarios reaching about 450 ppm CO2eq concentrations by 2100, natural gas power generation without CCS acts as a bridge technology, with deployment increasing before peaking and falling to below current levels by 2050 and declining further in the second half of the century”. The IPCC has made it clear that it sees natural gas extracted from shale as a key component of greenhouse gas mitigation strategies from now until 2050.
A study by AEA Technology for the European Commission concluded that the liefcycle CO2 emissions for shale gas could be 2-10% lower than emissions from electricuty generated by from conventional pipeline gas located outside of Europe and 7-10% lower than that of electricity generated from LNG imported into Europe.
In its report the aforementioned Lord’s committee made reference to the DECC commissioned MacKay Report which found that the carbon footprint of shale gas extraction and use is comparable to gas extracted from conventional sources and lower than the carbon footprint of liquefied natural gas (LNG).
In addition Professor MacKay told the Lord’s committee that large fugitive emissions would be “extremely unlikely to occur in the UK because of the much stronger regulation”, for example, unlike in the US, the venting of methane would not be permitted in the UK except in an emergency.
Added to this the largest source of methane emissions in US shale operations was from flowback water being stored in open pits on the sites. This practice would not happen in the UK as flowback water would be held in fully enclosed tanks prior to being taken to an offsite treatment plant.
The shale gas industry in the UK is developing “green completion” based on industry best practice, to reduce the emissions of gases into the air, and this is emphasised in UKOOG’s “UK Onshore Shale Gas Well Guidelines”. This involves using specialist equipment to collect and separate the initial flow of water, sand and gas, so the gas can be prevented from escaping.
According to Professor David MacKay, (DECC’s Chief Scientific Advisor), and Dr Timothy Stone (the Senior Advisor to the Secretary of State), “green completions” should be adopted at all stages following exploration. According to the Government’s Department of Energy and Climate Change “Green completions and flaring can reduce methane emissions by as much as 95% versus venting straight into the atmosphere.”
To ensure that methane leakage from a well is prevented the existing methane concentrations in the near surface soils and groundwater are measured before operations commence as part of a Baseline Monitoring Survey.
Methane leakage from a well can then be prevented by a well construction design that includes multiple layers of casing which is checked by the Health and Safety Executive and then integrity tested before operation commences. Then during and after operations independent environmental monitoring will be carried out to check that no leakage has occurred.
UKOOG has developed guidelines for comprehensive baseline monitoring of soil, air and water before and during operations. These will be mandatory for UKOOG members. Once these guidelines have been published, UKOOG will develop guidelines for the monitoring of the local environment after wells have been decommissioned.
UKOOG is the representative body for the UK onshore oil and gas industry including exploration, production and storage. The organisation’s objectives are to enhance the profile of the onshore industry, promote better and more open dialogue with key stakeholders, deliver industry wide initiatives and programmes and to ensure standards in safety, the environment and operations are maintained to the highest possible level. Membership is open to all companies active in the onshore industry including those involved in the supply chain.
Appendix 1 - Managing Environmental Risk in the UK
Transparency and Environmental Monitoring
Where hydraulic fracturing is planned, DECC requires an environmental risk assessment (ERA) to be carried out. This is an early stage assessment that assesses environmental risks over the full cycle of the proposed operations with the participation of stakeholders, including local communities. DECC recommends this as a starting point for early engagement by operators with local authorities and other regulators as it can subsequently inform more detailed permitting, environmental impact assessment process and minerals planning consenting.
Further to the ERA process, the submission of planning applications and environmental permits required by Statute ensures the public and statutory stakeholders are consulted. Detailed assessment through an Environmental Impact Assessment and a range of environment permits provides a comprehensive assessment of both risks and impacts.
The industry believes through the establishment of a scientific based and transparent Environmental Baseline Assessment, the embedded control measures can demonstrate that the protection of the natural environment and disruption to local community is minimised during hydraulic fracturing operations. UKOOG has worked with the industry to develop a set of guidelines for the establishment of environmental baselines. Ssuch guidelines enable a ‘site condition schedule’ to be established against which permits can be granted and monitored for compliance by the regulators.
Well Integrity and Barrier Assurance
The Health and Safety Executive (HSE) regulates onshore oil and gas operations for well integrity and occupational health and safety. Prior to any drilling activity, the operator must send its proposed well design to an independent well examiner. Once the design has been satisfactorily assessed by the examiner, the operator must then notify the HSE of the well design and operation plans. The HSE carries out its own review of these plans, taking into account any comments or recommendations made by the independent well examiner. The design of wells is regulated by the Offshore Installations and Wells (Design and Construction, etc.) Regulations 1996 (DCR). These regulations include specific requirements for all wells, whether onshore or offshore, and include well integrity provisions which apply throughout the life of wells. The design and construction of the well is key to subsurface environmental protection. Through the use of multiple physical barriers of casing and cement, as well as utilising natural impermeable geology layers as protection, the well will protect any migration of hydrocarbons or well fluids into the surrounding rock formation. Before hydraulic fracturing commences, the well will be tested for integrity and suitability for fracturing.
The DECC will only allow operations to proceed once the HSE has assessed the drill programme, all relevant environment permits have been granted and planning permission is satisfied.
A weekly report is sent to the HSE showing progress with the well, as well as the results of integrity testing that is completed as part of the drill plan. (See also: - Independent Well Examiner section 22.214.171.124). The HSE visit well sites on both an announced and unannounced basis to review operations as it deems necessary.
Water is a critical component in Hydraulic Fracturing and an important resource in facilitating onshore oil and gas in general. The industry believes water should be considered holistically throughout the planning, operational and waste management stages. The industry has established close relationships with Water UK and British Water, having also recently commenced an initiative to consider ‘Integrated Water Management for Onshore Oil and Gas’.
The Environment Agency (EA), which regulates shale extraction, has investigated the likelihood of groundwater contamination in detail and judged that the environmental risks at each individual stage of exploratory shale gas operation, after proper management and regulation, are “low”. The EA will not permit activities if they are close to drinking water sources, such as groundwater from aquifers.
According to a joint Royal Society and the Royal Academy of Engineering report the risk of water contamination is very low provided that shale gas extraction takes place at depths of many hundreds of metres or several kilometres – which would be the case in the UK.
The Chartered Institution of Water and Environmental Management (CIWEM) also agree that risks to groundwater quality are generally considered to be low in the UK where the shale rock in question often exists at considerable depths below aquifers and gas would be required to migrate many hundreds of metres between source rock and sensitive groundwater.
With regards to interaction between shale and overlaying aquifers, a study by the ReFINE (Researching Fracking in Europe) project found that there was a less than 1% chance of a stimulated hydraulic fracture propagating upwards more than 350 metres, and that the maximum recorded distance was 588 metres. This study recommended that all horizontal fracking wells are drilled at least 600m below aquifers to minimize the risk of stimulated hydraulic fractures providing a pathway for natural gas to migrate upwards into aquifers.
Fears of water shortages arising from shale gas development have been overstated. The demand for water from onshore shale operators, even at high levels of activity, would be comparable to demand by other industrial useRs. The Strategic Environment Assessment undertaken for the 14th Onshore Oil and Gas Licensing Round predicted that under a high activity scenario, annual water use could be up to 9 million cubic metres, representing far less than 1 per cent of total UK annual non- domestic mains water usage. Abstraction from other sources e.g. groundwater is assessed on a case by case basis by the Environment Agency only permitted in non-water stressed environments. Technological advances are already being commercially utilised in the USA enabling recycling/re-use of Flowback fluid, subsequently reducing the water footprint.
Groundwater and Surface Water Environment
Hydraulic Fracturing Fluids
Concerns about pollution of groundwater by hydraulic fracking fluidS are largely based on reports of past practice in the US. The regulatory position in the UK is very clear and operators are required to fully disclose all chemicals used in hydraulic fracking fluid to the Environment Agency under the Environmental Permitting Regulations 2010 (as amended). Well pads are required to have secondary containment to prevent spills and leaks entering groundwater. Regulators do not permit use of hazardous chemicals, which must be assessed on a case by case basis via the JAGDAG assessment methodology (examines persistency, bioaccumulation and toxicity). The composition of hydraulic fracturing fluids pose a very low risk to groundwater in the UK as they will only be permitted by the environmental regulator if determined as non-hazardous to groundwater.
Methane in Groundwater
As part of the establishment of a Site Condition Report, as required within the Environmental Permits, groundwater boreholes are sunk to establish levels of naturally occurring methane levels in groundwater and potentially their origin e.g. biogenic or thermogenic. Methane is naturally occurring in many groundwater deposits across the UK. The weight of scientific opinion is that the risk of methane migrating from shale rock many thousands of feet up natural faults and into aquifers is highly unlikely due to the impermeable layers above the target zone and also the requirement in regulation to provide assessment of the risks on a case by case basis. The risk of methane migrating into aquifers through natural fractures is also very low4. As part of a DECC approved Hydraulic Fracturing Plan (HFP), the plan is also reviewed by the Environment Agency to review the geological target zone and potential risk to groundwater. It should be noted that methane is not a pollutant and can be readily removed from groundwater in a water treatment process.
The British Geological Survey, through its work in establishing a national picture of the background methane in groundwater has initially concluded that natural methane levels in groundwater are widely prevalent, generally low and that surface seasonal changes have very low impact.
Waste Management - Disposal and treatment of flow-back water
Flowback fluid contains very low levels of Naturally Occurring Radioactive Material, minerals and salts which returns to the surface inside a multi- barrier well and is stored at surface within secondary containment. Flowback fluid has been assessed by the Environment Agency as a non-hazardous waste stream and can be controlled by operators at the surface with redundant storage capacity that complies with local permitting. Specific control measures are described in detail as part of an approved Waste Management Plan and Radioactive Waste Arrangements by the Environmental Regulator in accordance with the Environmental Permitting Regulations 2010 (as amended).
Disposal of fluids, derived from Oil and Gas activities, has been an accepted activity, where treatment and disposal in the UK has taken place for many years. The industry is fully committed to storing of flowback fluids in sealed tanks as stated in UKOOGs Shale Gas Well Guidelines.
Surface Water and Spills
The management of surface water on a site must comply with permitting arrangements established with the environmental regulator and with any conditions imposed by the minerals planning authority through planning consents. Operations must be designed to avoid any discharge of surface water into the local environment through appropriately designed bonding and near/sub-surface barriers. Localised spills must be contained within the site, such that they do not pose a danger to the local environment. A site must be designed such that any natural occurring surface water (rain/run-off) is captured and captained within the site, where it can be suitably treated or taken away to a designated waste treatment facility.
Natural and Built Environment
Habitats and Biodiversity
The industries commitment to ensuring a transparent approach through the establishment of environmental baselines includes appropriate site selection. Sites where the natural habitats or biodiversity interests are of major importance will be avoided where possible, with such locations being identified by early Environmental Risk Assessment (ERA) as required by DECC, and through early engagement with environmental regulators and minerals planning authorities for the purposes of screening and scoping for Environmental Impact Assessment (EIA). The industry has committed to undertake an EIA (and equivalent studies) on all sites where hydraulic fracturing for shale gas/oil is proposed.
Where impacts cannot be entirely avoided, suitable mitigation and/or compensation will be established through full agreement with the appropriate regulators.
Assessment of Habitats and Biodiversity forms part of the planning application and supporting Environmental Impact Assessment. The assessment involves the identification of the likely zone of influence of the proposed development (study area); identification and evaluation of ecological resources and features likely to be affected (the baseline environment); identification of the biophysical changes likely to affect valued ecological resources and an assessment of whether these biophysical changes are likely to give rise to a significant ecological impact. Each operation is assessed on a case by case basis with embedded mitigation and control measures drawn on similar temporary industrial/ construction activities e.g. pre site checks by ecologist, enhancing the surrounding biodiversity.
Site selection by operators has due consideration for minerals planning practice guidance. In considering applications for unconventional hydrocarbon development in National Parks, the Broads and Areas of Outstanding Natural Beauty, mineral planning authorities will give great weight to conserving landscape and scenic beauty.
Where applications represent major development, planning permission may be refused in National Parks, the Broads and Areas of Outstanding Natural Beauty except in exceptional circumstances and where it can be demonstrated they are in the public interest. DCLG has published guidance for minerals planners, which can found via the following link.
Development and the build environment is regulated by local Minerals Planning Authorities (MPA). The development of onshore oil and gas, like any other industrial activity, will cause an increase in traffic and disruption in some locations, particularly during the periods when wells are drilled or hydraulically stimulated. Planning controls, established by the Minerals Planning Authority will mitigate disturbance along with the demonstration via a traffic management plan how the operator plans to manage routes, traffic safety and amenity of introducing new traffic to an area. The industry’s community benefits scheme will compensate those communities affected.
Geology and Induced Seismicity
The Government has introduced stringent planning and monitoring requirements controlling activities which might lead to induced seismicity. DECC has developed a live monitored ‘traffic light system’, which will significantly reduce the risk of any seismic activity caused by hydraulic fracturing being of sufficient magnitude to constitute any risk to people and property.
DECC requires operators to submit a Hydraulic Fracturing Plan prior to operations outlining the following:
· A map showing faults near the well and along the well path, with a summary assessment of faulting and formation stresses in the area and the risk that the operations could reactivate existing faults;
· Information on the local background seismicity and assessment of the risk of induced seismicity;
· Summary of the planned hydraulic fracturing operations, including stages, pumping pressures and volumes;
· A comparison of proposed activity to any previous operations and relationship to historical seismicity;
· Proposed measures to mitigate the risk of inducing an earth tremor and monitoring of local seismicity during the operations; and
· A description of proposed real-time traffic light scheme for seismicity, and proposed method for fracture height monitoring.
The plan is assessed and approved by DECC to allow operators to proceed with hydraulic fracturing.
Public Health England conducted a comprehensive review of the potential health impact of shale gas extraction. The review found that the potential risks to public health from exposure to the emissions associated with shale gas extraction will be low if the operations are properly run and regulated.
As part of this, the Department of Energy and Climate Change (DECC) insists that operators must minimise the release of natural gas into the atmosphere and, when gas can’t be economically used, it must be captured and “flared” to reduce its global warming emissions.
Beyond exploration, operators will have a commercial incentive not to flare gas, as the gas could otherwise be sold. It is also important that methane does not leak from the well, and escape into the environment that way.
For this study and, in addition to the natural gas released in the process, they noted that extraction will produce emissions because of the industrial processes on site such as engines to power drills and compressors to compress gas. Methane emissions from shale gas sites in the US have fallen by 73% since 2011/2. It is important to note that many of these emissions are also produced in significant quantities from other sources, including industry and transport, and from atmospheric processes. There will also be an existing background level of both primary and secondary pollution. Professor Richard Selley from Imperial College London said: “Whilst there are cases of ill health in the USA related to hydraulic fracturing for shale gas, these result from unsafe practices, such as storing flow back fluids in open pits; and using them to de-ice roads; practices that would never be allowed in the UK.”
Methane leakage from a well can be prevented by a well construction design that includes multiple layers of casing which is checked by the Health and Safety Executive and then integrity tested before operation commences. Then during and after operations independent environmental ‘compliance’ monitoring will be carried out to check that no leakage has occurred.
Further demonstrating the commitment of the UK onshore oil and gas industry to mitigate these risks, and complementing existing UKOOG “UK Onshore Shale Gas Well Guidelines”, UKOOG is also developing “green completions guidance “ based on industry best practice, to reduce the emissions of gases into the air.”
“Green completion” involves using specialist equipment to collect and separate the initial flow of water, sand and gas, so the gas can be prevented from escaping. According to Professor David MacKay, (DECC’s Chief Scientific Advisor), and Dr Timothy Stone (the Senior Advisor to the Secretary of State), “green completions” should be adopted at all stages following exploration. According to the Government’s Department of Energy and Climate Change “Green completions and flaring can reduce methane emissions by as much as 95% versus venting straight into the atmosphere.”
When discussing emissions associated with the onshore oil and gas industry it is vital to recognise that gas and oil are naturally mobile in the UK subsurface with around 200 natural hydrocarbon seeps, mainly of oil, known onshore in UK. A small number of natural gas seeps from shales have also been recorded, with notable occurrences in the Weald Basin of south-east England.
To fully understand emission levels caused by our operations, it is essential that any baseline levels of methane are recorded. UKOOG has developed guidelines for comprehensive baseline monitoring of soil, air and water before and during operations. Adherence to these guidelines will be mandatory for UKOOG members. Once these guidelines have been published, UKOOG will develop guidelines for the monitoring of the local environment after wells have been decommissioned.
There are many regulations in place covering different aspects of the shale development process, which provide safeguards for environmental protection.
The main regulators are the Environment Agency, the Department of Energy and Climate Change, Public Health England, and the Health and Safety Executive. In addition to this, local planning controls (through the Minerals Planning Authority) must be satisfied before operations can begin. There are also 17 separate pieces of European legislation covering the process. The UK Government has also published the UK Regulatory Roadmap.
Department of Energy and Climate Change (DECC)
DECC issues a ‘Petroleum Exploration and Development Licence’ (PEDL), giving a company or group of companies (a joint venture) exclusive rights to explore for, and develop, the resource in a particular geographic location.
An operator is approved for each licence with the responsibility for managing all activity on the PEDL. An approval can be made at any time but is usually made at licence award rounds, at field development approval or at approval of a licence assignment.
In considering any request for operatorship, DECC will look at the technical competence of the operator – more specifically the following factors:
- · capability to supervise, manage and undertake the proposed operations
- · scope of relevant insurance coverage
In addition to licensing duties, DECC is required to give final consent for drilling. DECC checks that the proposals make efficient use of the nationally owned resource, and it will impose limits on flaring if proposed. For shale wells where an environmental risk assessment (ERA) is required, DECC is charged with reviewing this. If hydraulic fracturing is intended, DECC will require that a fracturing plan to address the risk of induced seismicity is submitted, and will review this plan before these operations are permitted. Finally, DECC will check that the Environmental regulator and Health and Safety Executive have no objections to the proposed operations, before consent is given.
The role of environment regulation is handled by the Environment Agency (EA) in England, Natural Resources Wales (NRW) in Wales and the Scottish Environment Protection Agency (SEPA) in Scotland. A broad description of the environmental regulator is given here.
In England & Wales, onshore oil and gas exploratory activities require environmental permits issued under the Environmental Permitting Regulations (EPR 2010) and other permissions from the Environmental Regulator, depending on the methods used and the geology of the site. In Scotland, SEPA requires a construction licence for any borehole greater than 200 metres, under the Water Environment (Controlled Activity) (Scotland) Regulations 2011 and for a water features survey up to 1.2km from the well trajectory.
Environmental Regulation requires the following:
· A notice to be served on the Regulator under section 199 of the Water Resources Act 1991 to ‘construct a boring for the purposes of searching for or extracting minerals’
· Environmental permits for:
– groundwater activity – where the regulator considers that the risk of inputs to groundwater requires this
– mining waste management– likely to apply in most circumstances
– Industrial Emissions Directive – when the intention is to flare more than 10 tonnes of natural gas per day (generally applies to exploration phase only)
– radioactive substances activity – likely to apply where low level Naturally Occurring Radioactive Material (NORM) is contained in the rock cuttings or fluid returned to the surface from the well
– a water discharge activity – if surface water run-off from the site becomes polluted, for example, due to a spill of diesel
· A groundwater investigation consent – to cover drilling and test pumping where there’s the potential to abstract more than 20 cubic metres per day (m3/day) of water
· A water abstraction licence – if the plan is to abstract more than 20m3/day for own use rather than purchasing water from a public water supply utility company
· A flood defence consent – if the proposed site is near a main river or a flood defence.
The Environment Agency has published draft technical guidance for onshore oil and gas exploratory operations, conventional and unconventional.
The Environment Agency has announced that it will develop a single application pack for mining waste and radioactive substances permits, to streamline the existing processes.
The Environmental regulator is also a statutory consultee during the planning application conducted by the MPA and also in the assessment of the Environmental Impact Assessment if this is required.
Health and Safety Executive (HSE)
The Health and Safety Executive (HSE) monitors oil and gas operations from a well integrity and site safety perspective. It ensures that safe working practices are adopted by onshore operators as required under the Health and Safety at Work etc Act 1974, and regulations made under the Act. These specifically are:
· The Borehole Site and Operations Regulations 1995 (BSOR) – These regulations are primarily concerned with the health and safety management of the site for onshore wells.
· The Offshore Installations and Wells (Design and Construction, etc) Regulations 1996 (DCR) – Apply to all wells drilled with a view to the extraction of petroleum regardless of whether they are onshore or offshore and are primarily concerned with well integrity and well control.
Note these regulations are “goal setting” and define what the operator must achieve, rather than what they must do – this philosophy has been copied around the world.
HSE works closely with the Environment Regulator and the Department of Energy and Climate Change to share relevant information on such activities and to ensure that there are no material gaps between the safety, environmental protection and planning authorisation considerations, and that all material concerns are addressed.
The HSE initially scrutinises the well design for safety and then monitors progress on the well to determine if the operator is conducting operations as planned. During drilling activities, the HSE requires a weekly drilling completion and workover report focusing on well control and well integrity.
During assessment and inspection activities, HSE checks that the operator has independent well examination arrangements in place.
Independent Well Examiner
The Operator is required to set up a Well Examination Scheme and appoint a Well Examiner. The Well Examination Scheme and involvement of the Well Examiner is for the complete lifecycle of the well, from design through to abandonment. The Well Examiner is an independent competent person who reviews the proposed and actual well operations to confirm they meet the Operator’s policies and procedures, comply with the Offshore Installations and Wells (Design and Construction, etc.) Regulations 1996 and follow good industry practice.
The well examination scheme requires the Operator to send the following documents to the Well Examiner:
· The well construction programme and any material changes to it
· Regular reports on how the well is being constructed
· Reports on how the well is being monitored
· At the end of the well’s life, a plan for how it will be abandoned.
Shale gas well operators will ask their well examiners to examine certain well integrity and fracturing operations in real time, especially during the early stages of a development, to provide a further level of independent assurance. Such periodic site visits will be made at the discretion of the examiner, in addition to assessing documentary evidence of well integrity, to observe and verify that such operations have been executed satisfactorily in accordance with the approved programme.
Minerals Planning Authority
Minerals Planning Authorities (as part of local councils) grant planning permission for the location of any wells and well pads, and impose conditions to ensure that the impact on the use of the land is acceptable.
The planning system controls the development and use of land in the public interest; this includes ensuring that new development is appropriate for its location taking account of the effects (including cumulative effects) of potential pollution on health, the natural environment or general amenity, and the potential sensitivity of the area or proposed development to adverse effects from possible pollution. In doing so the focus of the planning system is on whether the application is an acceptable use of the land, and the impacts of those uses. Any control processes, health and safety issues or emissions themselves are subject to approval under other regimes.
The principal issues that mineral planning authorities address, bearing in mind that not all issues will be relevant at every site, to the same degree, include:
- · noise
- · dust
- · air quality
- · lighting
- · visual intrusion into the local setting and the wider landscape
- · landscape character
- · archaeological and heritage features
- · traffic
- · risk of contamination to land
- · soil resources
- · flood risk
- · land stability/subsidence
- · internationally, nationally or locally designated wildlife sites, protected habitats and species, and ecological networks
- · nationally protected geological and geomorphological sites and features
- · site restoration and aftercare.
The Department of Communities and Local Government (DCLG) has recently issued planning guidelines with respect to the sector and they can be found here: https://www.gov.uk/government/policies/providing-regulation-and-licensing-of-energy-industries-and-infrastructure/supporting-pages/developing-shale-gas-and-oil-in-the-uk
 Department of Energy and Climate Change, Quarterly Energy Prices, September 2014, Tables 2.2.3, 2.3.3 and 3.1.3 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/368077/qep_Sep_14.pdf
 Department of Energy and Climate Change, The Future of Heating: A strategic framework for low carbon heat in the UK, March 2012 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/48574/4805-future-heating-strategic-framework.pdf
 Department of Energy and Climate Change, United Kingdom housing energy fact file 2013, Tables 6a, 6b and 6d – data for 2011 (most recent year available) https://www.gov.uk/government/publications/united-kingdom-housing-energy-fact-file-2013
 Department for Environment, Food and Rural Affairs, The British Survey of Fertiliser Practice: Fertiliser Use on Farm Crops for Crop Year 2013, Table ES1 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/301474/fertiliseruse-report2013-08apr14.pdf
 TUC, Building our low-carbon industries: The benefits of securing the energy-intensive industries in the UK, Published in association with the Energy Intensive Users Group, June 2012 http://www.tuc.org.uk/sites/default/files/tucfiles/buildingourlowcarboninds.pdf
 AEA, Climate impact of potential shale gas production in the EU: Final report, Report prepared for the European Commission, July 2012 http://ec.europa.eu/clima/policies/eccp/docs/120815_final_report_en.pdf