Weighing up the case for shale gas after government gives green light to fracking

By Prof. Benjamin K. Sovacool and Suzanne Fisher-Murray

If they knew about it, what would the residents of Pawnee, Oklahoma in America have thought about Communities Secretary Sajid Javid’s decision to approve plans for fracking at Cuadrilla’s site at Little Plumpton in Lancashire, UK? Due to the government’s landmark decision, UK shale rock will be fracked horizontally for the first time.

Oklahoma’s residents experienced the largest recorded earthquake to date on Saturday 3 September. The 5.8 magnitude earthquake tremors were felt from Dallas to Chicago and a state of emergency was declared. Many smaller aftershocks have been registered since then, including a 3.8 magnitude quake on 9 September and another on 26 September.

image of a shale rig and gas well

Shale rig and gas well in America. The number of earthquakes has dramatically increased in the central USA over the past 6 years. Photo credit: Penn State outreach (CC BY-NC-ND 2.0)

A new study by the US Geological survey, which looked at both induced and natural earthquakes for the first time, said the risk of earthquake hazards in the central US has undergone the “most dramatic increase in seismicity over the past six years”. The 7 million people who live and work in central and eastern U.S. now face a level of risk similar to that posed by natural earthquakes in California. Oklahoma’s Office of the Secretary of Energy & Environment agrees that the state is experiencing a rise in earthquakes due to the disposal of wastewater generated by the fracking wells.

Given the earthquakes and potential future risks, Oklahomans might be ruing the State government’s decision to invite shale gas investment to the area. Production in Oklahoma has more than doubled since 2005 to more than 128 million barrels in 2014, making it one of the top five oil-producing states in the US.

Gas Security and Policy in America

Business is booming in the the US, which is now sometimes referred to as ‘Saudi America’. It could become a net exporter of oil and gas by 2017 thanks to new technological breakthroughs, such as seismic imaging, horizontal drilling and hydraulic fracturing or ‘fracking,’ the process of injecting a mixture of water, sand and chemicals, some of them toxic, into underground rock formations to blast them open and release natural gas. US shale gas production started to expand rapidly in the mid-2000s, growing at more than 45% per year between 2005 and 2010. [PDF]

Shale gas is reversing the decline caused by conventional gas and oil reserves drying up. It is abundant and relatively cheap, reducing electricity and heating costs for consumers and making the US more attractive to manufacturers. It’s cleaner, with half the carbon footprint of dirtier oil and gas, and with lower emissions of sulfur oxides, nitrogen oxides, and mercury. Shale gas is phasing out coal. It has already reduced overall US carbon emissions – which is good from a climate standpoint. In addition, combined with renewables, it could provide a path to a low-carbon future, by bridging gaps with more intermittent renewable sources of energy, such as wind and solar power.

Despite the advantages, Oklahoma’s dramatic rise in earthquakes shows that shale gas comes at a cost.

Weighing up the case for shale gas

It’s difficult to do a holistic risk assessment of shale gas because there are different winners and losers in different locations and at different times. It’s not just about costs, but about their timing and their distribution. A lot of the benefits brought by shale gas are immediate: jobs and energy supply. But a lot of the costs are delayed: climate impacts, polluted water, earthquakes that happen a few years later.

The beneficiaries are the companies investing in shale gas, or those connected to the gas transmission grids who benefit from cheaper energy bills. The losers are local communities and communities and species – often thousands of miles away from the drilling site – impacted by climate change.

As set out in Fact and Fiction in Global Energy Policy, the only way to solve global energy issues is to have reasoned, evidence-based debates of the pros and cons. Shale gas brings many benefits, but in order to ensure that we minimise environmental damage, it must be properly governed and it must act as a bridge to helping us adopt renewable technologies.

As with many things, you can do things poorly or properly. It can work if there are stringent safeguards in place, and operational data is transparently shared about water use, volumes and the characteristics of waste water. Many countries, such as China and the USA are struggling to regulate the shale gas industry, and little transparency exists.

In the US, the Haliburton legal loophole prevents fracking companies from being subject to the same level of scrutiny as other energy companies. Inserted into the 2005 energy policy act on the behest of US Vice-President Dick Cheney who had been the Chairman and CEO of Haliburton Company from 1995 to 2000, it strips the US Environmental Protection Agency of its authority to regulate hydraulic fracturing. As a result, it’s far easier to frack than it is to do practically anything else in oil and gas.

Innumerable American companies are not disclosing what they are re-injecting back into their seams. They use a trade secrets argument that if they suddenly disclosed their ‘secret recipe’ that they would go out of business. But that doesn’t hold a lot of weight because fracking is very location specific and each of those wells will have unique characteristics that require different formulas.

These ‘secret recipes’ – often a chemical cocktail – may not remain contained underground. Earthquakes and changes in geology can also change water flows.

Higher standards are needed

The International Energy Agency has set out some ‘golden rules’[PDF] in a report that shows that there are companies operating to high environmental standards, with good synergies with renewables. They can have a positive overall impact on decarbonising the electricity sector. However, there are just as many poor performers in the mix. The shale gas industry needs to need to get rid of the Haliburton loopholes and follow the IEA guidelines. It needs to be properly regulated on the materials and chemicals used and follow stipulated regulations for the disposal of polluted water and for wastewater treatment.

Handmade sign saying frack free

Protest against proposed fracking plans near Blackpool. Photo credit: Victoria Buchan-Dyer (CC BY-NC-ND 2.0)

In the UK, following small tremors in 2011 at a fracking site near Blackpool, the then Department of Energy and Climate Change introduced new controls and checks for fracking, which include monitoring seismic activity during and after fracking and stopping operations if a tremor of magnitude 0.5 or greater is detected. These stronger regulatory standards show more promise in protecting public safety and the environment than in the US, but they have yet to be put to the test. Until now. Of course, it’s likely that anti-fracking campaigners will delay the process by asking for a judicial review, but it’s a costly process. Cuadrilla says it expects to begin fracking by the end of 2017.

In the meantime, if the residents of Pawnee, Oklahoma are wondering who was responsible for triggering the latest earthquake, where are they likely to find answers? This is part of the problem itself: more wells bring greater risks and less accountability. Companies will say: ‘It wasn’t me. It was her.”

It’s a diffusion of responsibility almost as diffuse as the gas itself.

Read Fact and Fiction in Global Energy Policy

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