The Government has launched a formal consultation on its proposals for large scale shale gas production in the UK by the 2020s - -however, the independent assessment accompanying the proposals has warned that it could also place a substantial burden on existing waste water treatment infrastructure capacity.
An independent assessment by AMEC for the Government concludes that shale gas production could boost the UK’s energy security, contribute to economic growth, create thousands of jobs and plough almost £1 billion back to local communities through benefit schemes.
The Strategic Environmental Assessment (SEA) report, produced by AMEC, sets out the potential economic and environmental effects of further oil and gas activity in Great Britain, including shale oil and gas production, comparing a ‘low activity’ and ‘high activity’ scenario. The assessment was carried out in preparation for the launch of the next round of licenses being made available for onshore oil and gas exploration and production.
The proposals would provide energy companies with the opportunity for rights to drill across more than 37,000 square miles, with every county in England except Cornwall could have shale gas exploration, according to the map showing areas the Government plans to offer for exploration.
The assessment warns that more than 650,000 cubic feet of waste water could be produced by each well, which could “place a substantial burden on existing waste water treatment infrastructure capacity". However, it also concludes that co-operation with local planning authorities and water companies could address the problem.
The Government has also published a regulatory roadmap for shale gas alongside the SEA which sets out the series of permits and permissions developers need to obtain prior to drilling for onshore oil and gas. This is to provide certainty to investors and local communities about what the permitting process entails.
The new consultation will now run until March to consider the findings of the SEA and how this affects shale gas production in the UK.
Energy Minister Michael Fallon said:
“There could be large amounts of shale gas available in the UK, but we won’t know for sure the scale of this prize until further exploration takes place. Today marks the next step in unlocking the potential of shale gas in our energy mix.
“It is an exciting prospect, which could bring growth, jobs and energy security.
But we must develop shale responsibly, both for local communities and for the environment, with robust regulation in place.”
The ‘high activity scenario’ in the SEA assumes that a substantial amount of shale gas is produced during the 2020s, (4.32–8.64 trillion cubic feet), which is up to three times current gas demand in the UK.
Under this scenario, there would be beneficial impacts to the economy, jobs and communities. Employment in the oil and gas industry could be increased by 7 per cent, with 16,000 – 32,000 full-time jobs created.
Local economies would benefit from receiving an initial contribution of £100,000 per hydraulically fractured site. They could then receive a further 1 per cent of the revenue of each well over its lifetime. Almost £1 billion could be paid out across the UK under a ‘high activity’ scenario.
High levels of shale gas production could however have some potentially adverse impacts on the environment and communities, including an increase in traffic congestion, emissions and more pressure on water resources. The SEA notes that existing regulatory controls, including the planning system, should ensure that any adverse impacts are minimised.
The Government will consider all responses to the SEA before any decision is made on further onshore licensing.
After the consultation responses have been considered, DECC will publish a post adoption statement, summarising the responses received and how these have been taken into account in deciding on further onshore licensing.
On 9th September 2013, DECC’s Chief Scientific Advisor Professor David Mackay and Dr Timothy Stone, Senior Advisor to the Secretary of State, published a report on the potential greenhouse gas emissions associated with shale gas. The report estimates that the carbon footprint of UK produced shale gas would likely be significantly less than coal and also lower than imported Liquefied Natural Gas.
It shows that with the right safeguards in place, the net effect on greenhouse gas emissions from shale gas production in the UK will be relatively small.