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Regulation of Shale Gas Extraction

In March 2012 Newsnight ran an investigation into fracking and interviewed Chartered Engineer and local resident Mike Hill

You can see the report by following this link


Mike has campaigned for a long time to ensure that if fracking is allowed to go ahead then we will be adequately protected by effective regulation.

Unfortunately, as things stand the current regulatory environment is manifestly inadequate. It doesn’t really matter whether you believe shale gas drilling could bring the economic advantages that Cuadrilla and their friends at PR company PPS Group are trying to persuade us are awaiting us. It would be a serious dereliction of duty if the government were to allow fracking to go ahead without a properly defined and implemented regulatory environment.

Speaking in the parliamentary debate on Shale Gas Profits on 19th December 2012 , Preston MP Mark Hendrick, accused the Government of allowing a “cavalier approach” by failing to introduce adequate new regulation when it gave the industry the green light to start work again.

He said

The Secretary of State has made it clear that the exploratory and experimental phase that has been given the go-ahead for the next two years may yield results that highlight the need for new regulation. However, that amounts to using Lancashire as a guinea pig for the rest of the country. That is a cavalier approach to serious industrial activity.

Across in Canada, where they have the dubious privilege of having much greater experience of the fracking industry, Alberta’s Energy Resources Conservation Board (ERCB) spokesman Darin Barter, stated in January 2013

“There is no amount of regulation that can overcome human error”

http://www.desmogblog.com/2012/12/22/alberta-finds-mismanagement-errors-causes-fracking-water-contamination-alberta.

He was referring specifically to an investigation report that cites inadequate management of risks as one of the main causes of a September 2011 accident that contaminated groundwater with toxic hydraulic fracturing chemicals, including the cancer causing agent known as BTEX (benzene, toluene, ethylbenzene, and xylene).

Cuadrilla meanwhile tell us that there is “no evidence of aquifer contamination from hydraulic fracturing” and that “All of our work is highly regulated”.


A typical shale gas well

A typical shale gas well


Here are some of the things that need to be looked at:

Specific On Shore Gas Regulations

There is a clear need of specific On Shore exploration regulations. At present there are none. The offshore regulatoins developed in the 1990s (Borehole Site and Operations Regulations (BSOR) 1995 & Offshore Installations and Wells (Design and Construction). 1996 (DCR)) in the wake of the Piper Alpha disaster are not sufficient to address the issues with on shore drilling, exploration and production.

Verification

Independent (financially and professionally) verification, testing and inspection of the wells to meet the required onshore regulations is a sine qua non of safe shale gas extraction . Presently virtually all testing & inspection is self –regulatory. What is now required is a ‘hands on’ inspection regime of a type similar to that a number of US states have adopted. Each well needs to be inspected with both random and pre-arranged trips – approx 10/15 times whilst the well is being drilled and then “fracked”.

Specific areas that need regulation

Regulations need to cover cement quality via on site sampling and laboratory testing , cement bond logs, annular pressure readings (instruments used, calibration, how recorded in SCADA etc.), examination of formation integrity tests as they are executed, seismic monitoring , surface methane detection (baseline and operational), post tremor actions, publication of which “fracking” chemicals used at each well with MSDS, flow back water storage and disposal (Permit), recycling of flowback (which is presently illegal – we need a regulation to define this process and legalize it), flowback water quantity verification, green tanking, fugitive emission monitoring and reduction, bond for abandonment, sourcing water from mains (pressure issues) and testing of local boreholes/wells.

Effective Co-ordination of Regulatory Bodies

Overview – DECC should appoint a person of suitable engineering background to oversee the regulation of the Shale Gas Sector in the U.K. Mike Hill has collated a number of examples of confusion and misunderstanding between the authorities with no one person taking on the responsibility. Each has a number of different roles to perform. To ensure all are performed an overview is needed so that the public can be given re-assurance and the regulators can be given logistical assistance when and where needed.

Compliance – The regulations should be implemented through random and agreed on site visits when key actions (like cementing) are happening. There needs to be serious repercussions if an operator is found to be in breach of the regulations. These might include fines, license revocation and criminal proceedings as required.

Funding – a seriously robust regulatory regime requires funding. Random inspections, frequent site visits to a rapidly expanding industry will mean a significant increase in costs to the HSE and EA. A new funding structure, negotiated with the industry, needs designing and implementing. Mike Hill has developed such a plan and discussed it with the industry. It must be done and soon to ensure we have not only the regulations but also the implementation of them at the well site.


What can YOU do?

Please write to your M.P. and to Simon Toole, DECC, Head Licensing Exploration and Development, Floor 3, Area B, 3 Whitehall Place, London. SW1A 2AW and make your views known.

Please use the material above as the basis for your letter.

If the status quo persists for the rest of exploratory phase and on to development, and if this lack of regulation continues then the local environment and economy will be at serious risk.

Until this situation is satisfactorily resolved the only sane course of action is to call for a moratorium on shale gas extraction in the UK.

Whilst we await our fate here in Lancashire, Fylde MP, Mark Menzies (and other conservatives throughout the country) seem strangely content to allow questions on this topic to go effectively unanswered by the Energy Secretary in parliament

Mark Menzies (Fylde, Conservative)

What steps his Department is taking to ensure that safety and environmental concerns regarding shale gas exploration and extraction are addressed before shale gas reserves are developed. [a promising start there]

Edward Davey (Kingston and Surbiton, Liberal Democrat)

Shale gas may prove to be a useful addition to the UK’s diverse portfolio of energy sources, and would be particularly valuable in replacing declining North sea supplies, with benefits to energy security as well as to the economy and employment — but its exploitation will be acceptable only if it is safe and the environment is properly protected. [Mr Davey – surely that wasn’t anything to do with the question]

Hydraulic fracturing operations for shale gas were suspended last year, pending consideration of seismic events in Lancashire. Based on the latest evidence and expert advice, and having considered the responses to a public consultation on that advice, I have concluded that, in principle, fracking for shale gas can be allowed to resume — subject to new controls to mitigate the risk of seismicity. I have made full details available to both Houses by means of a comprehensive written statement tabled this morning. [Mr Davey, if you believe that seismicity is the only safety and environmental concern you shouldn’t be allowed to do the job you are doing! Mr Menzies will now stand up again and point out that his question wasn’t properly answered. Oh no – He seems quite happy with that. Do you think he has no idea what problems really face his constituents either? Well we know he does know exactly what other risks exist, so his silence here was rather surprising.]

Andrew Selous (South West Bedfordshire, Conservative)

I want to see proper environmental safeguards and generous community benefits for the areas where fracking will take place, but does my right hon. Friend agree that shale gas has the potential not only to lead an industrial renaissance in this country but to play a serious part in dealing with fuel poverty? [We just love these questions designed to let a minister free-style on the “benefits” of a selected policy – you’d hardly realise that they were set up would you? – unless of course you had a brain.]

Edward Davey (Kingston and Surbiton, Liberal Democrat)

I agree that shale gas has an important part to play in our energy mix and in our economy, and I also agree that we must ensure that communities benefit and that there is proper environmental regulation. I have been very impressed by the way in which Members in all parts of the House have contributed to the debate and to the Department’s thinking, but I pay particular tribute to Mark Menzies, who, along with the independent experts, has really influenced our thinking. It is very important for us to take the public with us as we explore the potential for shale gas in the United Kingdom. [Well, when you say “really influenced” you obviously don’t mean enough to have convinced you that the “indepedent” regulatory panel he said was necessary was worth the candle do you?]

Mark Menzies (Fylde, Conservative)

I welcomed the announcement of the formation of the Office for Unconventional Gas last week, and I thank the Secretary of State and Ministers for all the work that they have done in that respect. However, some of my constituents have subsequently expressed concern about the possibility that the office is not fully independent. What assurances can the Secretary of State give that it will both improve regulations and be robust, transparent and able to respond to any concerns that Fylde residents may express? [Yes, bizarrely you did welcome it Mr Menzies. As you point out though some of us had to remind you that it wasn’t what you said very clearly was needed. Why did you not ask why it was not independent instead of giving Mr Davey this soft way out here?]

Edward Davey (Kingston and Surbiton, Liberal Democrat)

I repeat my thanks to the hon. Gentleman. The way in which he has stood up for his constituents provides a model for all Members [especially those who want to get on in the Conservative party?] . I can reassure him that the Office for Unconventional Gas will be a strong office, and that it will be in my Department and accountable to Ministers, so that Members can hold us to account in the House. One of its jobs will be bringing together the various regulatory bodies so that they are properly co-ordinated, and our work as we approach potential commercial development in a few years’ time will include ensuring that we have all the regulatory controls that we need. to accept. [but you haven’t explained why you didn’t set up the independent panel Mr Menzies asked about Ed – surely he’s going to point that out now… Oh no – ere comes Dennis Skinner with a question about methane – how does Mr Menzies characterise this exchange on his own website – “Mark Menzies MP, along with a number of other interested colleagues, used the opportunity to question the Secretary of State about the recent decision to permit Cuadrilla Resources to begin the process of Hydraulic Fracturing again.” But he didn’t get any real answers again did he? Do you think it would be unfair to suggest that we can and should expect better from Mr Menzies?]


Here is a video discussing the America Regulatory experience.

A Review of Regulatory Effectiveness in the USA and some of the issues they face over there.

Lou Allstadt spent 31 years working in the oil and gas industry. He was Executive Vice President of Mobile Oil Corporation responsible for exploration and production (drilling for oil and gas) in the US, Canada and Latin America. Previously, he headed Mobil’s worldwide supply, trading and transportation operations. He is a member of the US Oil and Gas Association.

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