UK 'Traffic Light System' Unsustainable: Cuadrilla (Update)
(Adds comment from regulator OGA)
The present traffic-light system of regulating hydraulic fracturing in the UK does not allow sustainable gas production, said Cuadrilla CEO Francis Egan October 30.
The company has had to stop production on several occasions in the past week owing to subterranean tremors, as the brittle shale is broken by fracturing to bring the gas up to the surface.
He told a '121' conference in London that the area's geology is very good, and the rocks are behaving as Cuadrilla had hoped they would. But thresholds for proceeding cautiously and suspending fracking (amber and red respectively) were both lower than in other regimes in the world such as in Canada; and having to stop drilling for 18 hours after a breach of the 0.5 tremor level meant progress is too slow.
However he conceded that while the attention is focused on headlines about Blackpool rocking, that is a conversation with the UK regulator – the Oil & Gas Authority – that will probably have to wait, he said.
Two weeks ago the Guardian newspaper reported that the 'traffic light system', introduced 2014, might be relaxed citing correspondence between junior energy minister Claire Perry and a pro-fracking parliamentarian Kevin Hollinrake who nonetheless wants the existing system maintained. On October 30, trade union Unite called for an immediate halt to fracking in Lancashire.
Otherwise, Egan said he is bullish about the prospects for UK shale gas production, in terms of the value it would bring the national and local economies in the coming five years or so. It will be cheaper to produce gas from the kilometre-thick Bowland shale and deliver it to a pipeline a few dozen kilometres away than it would be to import liquefied shale gas from the US, regasify it and inject it into the UK's national grid, he said, or else he was in the wrong job. Prior to joining Cuadrilla as its CEO in mid-2012, Egan had a 20-year career at BHP including as president of its worldwide oil and gas production.
Cuadrilla is a few years ahead of its competitors in the UK, which have yet to have permission to carry out hydraulic fracturing (known as fracking). It hopes to test flow rates this year and early next but it acknowledged that, until then, the operation it is carrying out is experimental rather than commercial.
In an October 30 statement saying fracking was continuing, OGA said it knew that very low level seismic events deep underground were entirely possible during fracturing operations and this is what has been happening recently at Preston New Road. There are several thousand minor seismic events like these occurring naturally in the UK every year and can only be detected at the surface with specialist equipment.
“We are taking a cautious approach and have strict controls in place so that even this low level seismic activity results in a pause in operations to allow us to review the event and ensure that the operator’s approved plan is still valid,” it said.
Cuadrilla CEO Francis Egan (Credit: the company)