Independent advisors appointed by DECC have published a report confirming that Cuadrilla Resource's fracking operations caused earth tremors in Lancashire and recommending a precautionary approach to future operations. Meanwhile the US Geological Society has concluded that fracking is not the direct cause of earthquakes that have occurred in the mid-USA, Obama has created a new working group, and the US environmental regulator has issued rules requiring the use of emissions capture technology for fracking operations after 2015.

In this bulletin we examine the report produced by DECC's advisors, the recommendations for recommencing fracking work at Cuadrilla's Lancashire site, as well as suggested minimum seismic hazard assessments at other sites. On the US front, we look at the contradictory conclusion on the causes of tremors there with regard to any association with shale gas activity, moves to co-ordinate a federal response to the regulation of shale gas and the new requirement for "green completion".

Seismic activity near Blackpool

The report was commissioned by DECC following the voluntary suspension by Cuadrilla Resources of hydraulic fracturing operations at its well near Blackpool in the north of England following seismic activity in April and May 2011. Hydraulic fracturing is also known as "fracking", and is a process whereby large volumes of water, sand and chemicals are injected into the ground under high pressure to extract resources – most commonly natural gas – trapped within layers of shale rock at great depths below the earth’s surface. The largest tremor recorded had a magnitude of 2.3ML.  Studies commissioned by Cuadrilla concluded that the earthquake activity was caused by direct fluid injection into an adjacent fault zone during fracking, but that the chance of further tremors occurring was low.

DECC appointed experts from Keele University, the British Geological Survey and an expert in hydraulic fracture technology from G FRAC to review Cuadrilla's studies and other information put forward by the company. DECC has launched a consultation seeking views on the report which will close on 25 May 2012. DECC is to consider the responses to the consultation before deciding whether to allow Cuadrilla to recommence fracking at its Preese Hall site.

The report and supporting materials are available here on the DECC website.  

Could it happen again?

The report questions Cuadrilla's basis for concluding that the risk of further tremors is low. Cuadrilla's studies had failed to identify the particular geological fault that had produced the tremors. Available knowledge of faulting in the Bowland Shale basin was poor and it was entirely possible that there were other faults under stress which could be disturbed by fracking.

Cuadrilla had produced simulated models to estimate the maximum likely size of any future fracking induced tremors at Preese Hall. Given the limitations of modelling, DECC's advisors considered it more instructive to look to the historical record of tremors induced by coal-mining in the UK. Although these typically occurred at shallower depths, DECC's advisors felt they pointed to a realistic upper limit for shale gas operations of around 3.0ML. The report suggests that at 2-3km below the surface, a tremor of this size is unlikely to cause more than minor superficial damage to structures (eg, cracks in plaster), but it is strong enough to be detected by people up to a few kilometres from the epicentre.

Evidence evaluated by DECC's advisors showed a correlation between: (i) the volume of fluids used in the fracking process; and (ii) the rate at which the fracking fluids were allowed to flowback after injection, with the risk of seismic activity occurring. Some deformation of the well casing at the bottom of the well had occurred, but this had not compromised the integrity of the well. There was no potential for the escape of fracking fluids into the subsoil layers.  

Recommendations

Preese Hall

DECC's advisors recommended that any further fracking be done with caution and that Cuadrilla adopt measures for:

  • test injection and analysis before commencing full fracking;
  • microseismic monitoring of fracturing occurring during fracking; and
  • use of a seismic monitoring system capable of pinpointing and measuring quake activity almost instantly.

The report also recommends that fracking should be suspended if tremors of 0.5 ML or above are detected.

New well operations

The report laid down minimum recommendations for seismic hazard assessment prior to commencing operations elsewhere, comprising:

  • baseline seismic monitoring;
  • characterisation of possible active faults; and
  • modelling to predict the potential impacts of any induced tremors.

A cautious start

The 0.5ML trigger for the suspension of fracking operations was recommended with a view to keeping tremors well below the level at which they might be felt by local residents and cause alarm. The authors of the report acknowledge that this level should be open to review subsequently in light of more experience. Cuadrilla's proposals for resumption of drilling go out of their way to make the point that the additional mitigations they propose are for initial resumption only, and that these may need to flex to enable commercial rates of return once they move towards full production. Their "traffic light scheme" is a plan for fracking in stages with additional time delays between injections for monitoring, which is supported by DECC's advisors.

Parallels with the US?

In the US, different conclusions are being drawn with regard to whether fracking causes seismic activity. According to statements by the US Geological Survey on 18 April 2011 (as reported by the Guardian newspaper), America's oil and natural gas boom has led to a "remarkable" rise in earthquakes in the mid-USA. These, say the scientists, were not directly caused by hydraulic fracturing itself, although they were in a few instances triggered by injection of waste water from fracking into disposal wells:

"We don't find any evidence that fracking is related to any of these magnitude 3 earthquakes that we have been studying...We simply don't see any evidence that fracking is related to earthquakes that are of concern to people."

The US study did find a sixfold increase in man-made earthquakes spread over several States over the period 2001-2011, each of just over 3.0ML. The number rose after 2009, corresponding with a sharp rise in natural gas drilling around the country: 50 earthquakes in 2009; 87 in 2010; and 134 in 2011. However, the US geologists concluded that whilst the quakes are almost certainly man-made, it is not clear how they are related to either changes in extraction methodologies or the rate of oil and gas production.

DECC's advisors (whose report was published before the US statements were made) considered the usefulness of drawing parallels with the USA but decided that no analogy could be drawn, as geological conditions in the British Isles differ considerably from those in the US.

Federal intervention in fracking in the US

The degree of concern over the various alleged impacts of shale gas production in the US culminated on 13 April 2011 with the Obama administration's creation of a new "Interagency Working Group to Support Safe and Responsible Development of Unconventional Domestic Natural as Resources". This body is charged with pulling together the efforts of the various Government departments and the US Environmental Protection Agency (EPA).

Separately, the EPA has issued rules under the clean air regime that will require operators to capture fugitive emissions of methane and other gases. This follows a court ruling in 2009 in an action brought by an NGO and other campaigners. Operators have until 2015 to comply, which may require the installation of new technology, so called "green completion" - although the EPA estimates that half of all relevant wells already have this in place. The EPA believes this technology is capable of capturing up to 95% of fugitive gas emissions from fracking. In the meantime operators will be required to flare such emissions. The EPA also plans to issue minimum standards for the disposal of wastewater from fracking.