Drill test wells to quantify shale gas economics says report

Task Force on Shale Gas says economic impacts of hydraulic fracturing can’t be quantified without exploratory wells to determine the recoverable volumes of gas

A typical fracking well sits 3000m below ground level

More information and clarity is needed to determine future economic impacts of a shale gas industry states the final report from the UK energy industry financed Task Force on Shale Gas. In seeking to determine financial implications for the UK economy, industries and local communities, the task force found that presently available predictions of job creation and benefits are based on “less than ideal amounts of factual data coupled with intelligent guesswork.”

“The Task Force urges that a sufficient number of exploratory wells be drilled, hydraulically fractured and tested under the strict and transparent conditions that we have recommended in previous reports in order to provide everyone – industry, Government and public with a more accurate idea of the amount of gas that is economically recoverable,” states the report. “Only by doing so can operators and other evaluate whether and where an industry might develop and at what pace.”

The Task Force on Shale Gas maintains that its position is independent despite being financed by energy firms, which it says have no influence over the findings. It was launched in September 2014 to provide an impartial, transparent and evidence-based assessment of the potential benefits and risks of shale gas extraction to the UK and its chairman Lord Chris Smith is the former chairman of the Environment Agency.

A series of recommendations around the community payments system are also made in the publication, which is the forth of a series of reports published by the task force this year. It calls on operators to outline exactly how the £100,000 of community benefits promised to local communities will be provided, and also asks government to provide a clear definition of communities. It also says that neither operators nor local authorities should be left to administer the community benefits and calls on the creation of local independent committees which include operators and local councils as well as residents. “The UKOOG Communities Charter and the pilot work that is being done alongside the UK Communities Foundation provides a welcome start to the process,” states the report.

Responding to the report the UK Onshore Oil and Gas (UKOOG) body said that the industry is committed to working with communities and enabling them to share in the economic benefits that flow from gas exploration and production sites located near to them. “The industry is in the process of setting up a number of pilot schemes with respect to initial communities in which we hope to learn exactly what works for those communities involved. It is clear that this needs to be community led. As the report concludes we now need to get on and find out how much shale gas we have beneath our feet and start building an industry that can provide thousands of highly skilled jobs across the UK as well as energy security for our country.”

Previous reports have focussed on climate change impacts, enviromental issues and regulatory needs. The third publication was printed in September and urged government to ensure revenues from a new shale gas industry be reinvested in carbon capture and storage and low carbon energy generation so that the UK meets its long term climate change commitments.  “Gas will be needed for several decades to come.  But we make two strong recommendations to make sure this happens in the right way,” said Lord Smith. “First, there must be immediate progress in developing carbon capture and storage for gas-fired power stations and industrial plant.  And second, we recommend that the Government should deploy revenue derived from a developed shale gas industry to investment in R&D and innovation in CCS and low carbon energy generation, storage and distribution.”

The third report followed on from findings reported in July which assessed potential impacts of the industry on local environments and health. This called for tighter standards and more rigorous regulation of the potential shale gas industry. An initial report into planning, regulation and local engagement, published in March called for the creation of a new independent regulatory body to bring together the current fragmented system.



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