Fracking in the UK – is this just a pipe dream?

At the dawn of the year, British prime minister David Cameron announced the UK would go 'all out' to exploit shale gas reserves and forge ahead with the controversial – and much maligned – practice of fracking. But could a combination of factors reduce it to pipe dreams before it even takes off? PIF investigates.

With rising geopolitical tensions engulfing Russia (who supply around 30 percent of Europe's gas supplies) raising the spectre of yet more price spikes, dwindling North Sea natural gas reserves, and Cuadrilla's upscaled estimates of 330 tcf worth of gas reserves in its Bowland Basin license area – it's easy to see what the big rush is about.

Clear and present stumbling blocks

The first clear and present stumbling block however is red tape. The Telegraph reports that, “Exploration plans must clear lengthy planning and permitting processes and face the threat of further delay from possible judicial review by environmental campaigners.” With that in mind, some industry insiders have speculated that only a handful of wells may be fracked in the forthcoming few years. A sharp contrast to the 20-40 wells predicted by energy minister, Michael Fallon earlier this year.

The long-term stability of wells, risk of leaks and inadequate monitoring of abandoned or 'orphaned' legacy sites also pose a question. "Data from the monitoring of active wells and periodic surveys of abandoned wells would help assess the impact of shale exploitation'” according to a study led by ReFINE (Researching Fracking in Europe), reported by the BBC recently.

Worryingly, “Datasets from eight countries published between 1989 and 2013 revealed highly variable well barrier and well integrity failure rates of 1.9%-75%,” say the broadcaster.

But, perhaps most unexpectedly, a lack of a viable homegrown supply chain for innovations – such as industry-specific pump solutions – may well drive up the price of fracking and could ultimately be the Achilles heel of the UK fracking industry, according to a recent report in The Engineer.

Fracking News US

The onset of horizontal drilling in America meant that pumps needed to “evolve to be bigger, stronger and more reliable” to operate from anything between eight hours at a time, up to several days consecutively, to access more natural gas from thin shale deposits.

“This led to a new generation of ‘super duty’ pumps designed specifically for tough unconventional gas plays, such as Baker Hughes’ Centrilift FLEX pumps,” say the Engineer. Self-reliance based on similar leaps in homegrown advancements is key to UK success.

With twenty years of experience exploiting shale gas reserves, the US is some way ahead of Great Britain in this specialised field, with fracking interests in at least 17 states, amounting to more than 82,000 operational wells nationwide. In a recent Bloomberg Brief, entitled 'Oil Buyer's Guide Shale and the Economy' Judith Dwarkin, Chief Energy Economist and energy research analyst with ITG Investment Research Inc underlined the remarkable progress across the pond.

Dwarkin says, “Since the North American shale-a-thon began, the producing industry has steadily improved drilling, production and well completion practices, dramatically lowering costs and expanding the economically recoverable resource. In the early days [...] it took 25 to 30 days to drill and complete a horizontal gas well. Now, it takes 10 days.”

Fracking news UK?

As the US moves to becoming a “more energy-independent nation,” with oil from shale rock jumping by 39 percent since 2011 (a 28-year high), can the same be forecasted for the United Kingdom? Not unless offshore expertise can be translated onshore and fast, according to the Engineer.

They say, “The country lacks an extensive onshore supply chain that could work on innovation in pump technology. Unlike the offshore sector, demand for onshore rigs and drilling services has been low. While innovation in pump technology in the US could prove to be a useful lesson, its success is unlikely to be replicated in the UK.”

For more information on Fracking, read our expert opinion article from Ross Topcliffe - My view on Fracking

Other relevant articles:

An Infographic on Fracking

Fracking Facts as Cuadrilla Upscales

The concerns of Fracking - A study

Fracking - A 'Buy cheap, buy many' approach

What do you think? Do the risks of fracking outweigh the benefits? Or is shale gas worth the effort and investment?

Give us your thoughts #justPIFit.