Britain looks to fracking

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BARTON, England -- Driving down a bumpy country road in northwestern England, one comes upon a bare patch the size of a soccer field at the edge of a peat bog. Workers are erecting a security fence and unrolling watertight film to protect the soil from chemical contamination. Near the middle is a big rectangular hole where a drilling rig will go.

Inauspicious as it may look, what happens on this patch of ground in coming months could help determine the future of Britain's, and even Europe's, approach to shale gas.

The energy source has made the United States, for one, suddenly self-sufficient in natural gas, but it raises environmental concerns that have made many nations on this side of the Atlantic dead set against it. Shale gas is extracted by the technique known as hydraulic fracturing -- or fracking, the harsh-sounding word that can stir the passions of the technology's harshest critics.

In France, the nation's highest court recently upheld the government's right to ban fracking. In Germany, fracking activity is suspended at least until a new government is formed.

But within the European Union, Britain -- struggling to confront its energy future as its North Sea oil reserves are depleted, dirty coal is demonized and nuclear power remains expensive and geopolitically fraught -- stands out as the country in which the government has officially encouraged shale gas development. Prime Minister David Cameron has thrown his support behind shale gas drilling, hoping to reap some of the benefits seen in the United States.

John Blaymires, chief operating officer of IGas Energy, said the government's support could reap big rewards for Britain, especially in the industrial Manchester-Liverpool region, where the soccer-field-sized bare patch is being readied in Barton. "There is another Aberdeen waiting to be created," he said, referring to Scotland's North Sea oil hub. "Manchester and Liverpool could be centers of excellence."

IGas, one of the small British companies chasing big dreams of shale-gas riches, has assembled a large package of acreage in an area that geologists say looks particularly promising. The company plans to drill an exploratory well in Barton before the end of the year. If it likes what it finds, the company would then probably apply for permission to hydraulically fracture that well, or others that it may also drill in the area, to find out whether there are strong enough gas flows from the shale rock to make further investment worthwhile.

IGas was founded in 2004 mainly to develop coal gas. But the company now reckons that shale gas, which it thinks can be found at greater depths than the coal in the area, may prove more promising.

Mr. Blaymires said 2014 and early 2015 were shaping up as a "critical period" for the company and the industry. "In all likelihood, a number of wells will be drilled and fracked, and that will determine the commercial potential of shale in the U.K.," he said.

If so, those will be the first tests of hydraulic fracturing in shale since another small company, Cuadrilla Resources, set off seismic and political tremors with fracking in 2011 at a site not far from Barton.

This summer, a well Cuadrilla drilled in Balcombe, in the commuter country south of London, set off protests from environmentalists and local opponents that received enormous attention from the media; the fact that it was a conventional oil well, not a fracking well for shale gas, almost seemed beside the political point.

The Cameron government is intent on encouraging development of Britain's energy resources, which is a reason the chancellor of the Exchequer, George Osborne, played a prominent role Thursday in announcing that Britain would welcome Chinese money into its nuclear power program. In support of shale gas development, the British government has established an office of unconventional oil and gas and has indicated that it will set up a favorable tax system and rewards to help overcome potential local opposition.

In addition, the government is preparing the first licensing round of onshore leases since 2008, with a possibility that bigger players with strong balance sheets will be persuaded to play. The government owns all mineral rights in Britain, although companies such as IGas lease individual sites from businesses and farmers.

This year, the British Geological Survey estimated that a strip across northern central Britain had a large amount of shale gas in the ground. The midrange figure was 1,300 trillion cubic feet. If even 10 percent of that gas could be produced, it could satisfy British natural gas consumption for about 45 years at current rates. But how much can be recovered, if any, is unknown.

IGas talks big numbers. Company chief executive Andrew Austin, a former banker, estimates that it has as much as 170 trillion cubic feet of shale gas under its northern acreage. If it could recover just 5 percent of that, it would have about the equivalent of three years of current British consumption, or about $85 billion worth at today's prices.

Mr. Austin and Mr. Blaymires say they think they may have a way of overcoming environmental concerns. They say that the British shale formations appear to be 3,000 to 4,000 feet thick -- several times as thick as those found in the United States. Because of the presumed greater production of the formations, the executives say they hope to be able to drill many wells from a single site to reduce the environmental impact above ground.

world - marcellusshale

First Published October 18, 2013 8:00 PM


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