There is something seismic happening in the production of shale oil across the US. Could the UK soon follow suit, wonders Flemmich Webb.
According to a recent report from Citigroup, for the first time since 1949, the US has become a net petroleum product-exporting country and has overtaken Russia as the world’s largest refined petroleum exporter.
This is in part due to falling national demand — by about 2 million barrels a day since its peak in 2005 (the recession, energy efficiency policies, technology commercialisation) — but also to do with the increase in homeland oil production derived from the exploitation of shale oil.
This involves hydraulic fracturing, or fracking, — injecting water, sand and chemicals into a well, which opens fractures in the shale, allowing the extraction of the gas and oil contained within them.
In the past, low oil and gas prices meant it was uneconomical to exploit shale reserves but recent price rises have changed the economics in favour of exploitation, while energy security concerns have created the desire for more control over production. Shale oil production could more than triple to three million barrels a day by 2020, according to the Citigroup report.
However, as the report notes, this is potential growth only; much will depend on the success of the anti-fracking movement (see the film Gasland, filmed and produced by journalist and campaigner Josh Fox), public reaction to negative environmental impacts associated with the industry and whether politicians sanction shale gas and oil exploitation in their states.
In terms of UK reserves, it’s too early to say how much onshore shale oil there is, but one industry insider involved in the exploration for shale oil told 2degrees that he believed that there could be hundreds of millions of barrels of recoverable oil.
Professor Mike Stevenson, head of energy at the British Geological Society (BGS), said that the Barnett Shale in West Texas, one of the largest shale gas fields in the US and which may become a substantial shale oil resource, was similar to shale in this country and “if there is oil there, we might have it here".
Though it’s hard to gauge how the shale oil industry might develop in the UK, with global oil prices at $100-120 a barrel and rising, and with extraction techniques and technologies constantly maturing, it would be economical to extract it should they find oil reserves.
But will the UK public accept a shale industry? Though it’s a lot less developed than in the US, it has already run into controversy in the UK. Two earthquakes in the Blackpool area last year were linked to hydraulic fracture treatments at Preese Hall shale gas drilling site operated by Cuadrilla Resources. Generally, according to the BGS, "it is well known that injection of water or other fluids during processes such as oil extraction, geothermal engineering and shale gas production can result in earthquake activity”.
In response to subsequent public pressure, a temporary suspension on shale gas test drilling was agreed between the UK Department of Energy and Climate Change (DECC) and Cuadrilla, which is still in place, though there has been ongoing speculation that it will be lifted soon.
Harrying the industry are campaign groups, such as Frack Off, which is determined to prevent a fracking industry starting up in the UK, and other organisations expressing concerns about the environmental impacts, carbon emissions and potentially damaging effect on the country’s renewable industry, associated with shale oil and gas extraction.
“As a carbon-based fuel, shale gas is not a sustainable energy source,” says CIWEM’s executive director, Nick Reeves. “Pursuing shale gas will make it more difficult to reach our climate change commitments and renewable energy targets; its development must not become a distraction from the necessary drive for energy efficiency and clean renewable energy."
“There is a high local impact associated with fracturing: covering the landscape with pipes and well pads, a worsening of air quality and increased water contamination,” says Ed Lloyd-Davies, a Frack Off campaigner.
Supporters claim a fracking industry would be good for UK plc and energy security. A recent report from the Institute of Directors claimed a successful shale gas industry would create 35,000 extra jobs, and supply enough onshore supply to meet 10% of the UK’s gas demand for the next century, protecting consumers from the ever-increasing price of gas imports, claims that campaigners dispute.
Until more work is done on assessing the UK’s onshore shale oil reserves, a US-style boom remains a possibility only. But it’s not just about whether the resource is there or not, it’s about whether there is the political and social appetite for fracking in this country.
Judging by the initial skirmishes between supporters and critics of hydraulic fracture, the development of a UK shale gas and oil industry along the lines of that in the US is by no means a foregone conclusion — whatever the size and value of hydrocarbon reserves underground.
Flemmich Webb is a freelance journalist.