With earthquakes in Lancashire, flaming taps in the USA and concerns over pollution, 'fracking' has been in the headlines of late. Katy Brown looks at this unconventional method of fossil fuel extraction and the companies behind it...
What is it?
'Shale gas' is natural gas trapped in densely packed rock such as shale. It can be reached through 'hydraulic fracturing', commonly known as 'fracking'. This involves a bore hole being drilled first horizontally and then vertically and lined with concrete. A mixture of sand, water and proprietary chemicals are then pumped under high pressure down the well and into the holes where it fractures the shale forcing the gas from the rock back out into the well.
What's the problem?
Fracking has been linked with earthquakes, leaking gas, radioactive contamination and poisoned water supplies in other countries. In the US, contamination of the water table with methane has in some cases resulted in people being able to set the water coming out of their taps on fire.
Two small earthquakes that occurred in Lancashire earlier this year have been linked to the fracking activities of Cuadrilla Resources. Shale gas is being promoted in the UK by companies and the government as a major energy source and a greener alternative to coal, but there is an increasing body of evidence that suggests shale gas will substantially increase carbon emissions, perhaps even releasing more greenhouse gasses than other fossil fuels.
Fracking, like extraction from other unconventional fossil fuel sources, such as tar sands, is very carbon intensive. A large amount of energy may be used, and carbon dioxide released, in order to produce not a great deal more energy than is used to access it.
Fracking involves the drilling of a lot of wells, as each one only produces gas for a short while, making it energy intensive. In addition the method results in significant amounts of the methane being extracted leaking directly into the atmosphere. Methane is a more powerful greenhouse gas than the carbon dioxide emitted by burning it.
Enough conventional fossil fuels have already been discovered that if all are burned more than enough carbon dioxide will be emitted to cause runaway climate change. So why are we going to such lengths to find more?
Who is fracking?
Staffordshire based Cuadrilla Resources is the only company to be actively involved in fracking in the UK to date. Its main contracting partner in the UK is PR Marriott Drilling Ltd, based in Chesterfield. Derbyshire-based Greenpark Energy has been awarded the first license for fracking in Scotland for its site in Canonbie in Dumfries and Galloway, but has since indicated that it will not be taking the license up as it is not in a position to carry out the procedure at present.
In September of this year Cuadrilla announced to a media fanfare that its tests for shale gas had found an estimated 200 trillion cubic feet of gas “in place”, underground in Lancashire. What percentage of this can be classified as recoverable will not be known until some time next summer, when the exploration has been completed.
However, Cuadrilla already has plans to drill five to seven wells in the next year and has suggested 400 wells could be created in Lancashire over the next nine years, rising to a possible 800 wells over the next 16 years. Over-estimates are common in extractive industries, particularly as this can be necessary to attract initial investment to begin operations. But any amount of non-conventional fossil fuel extraction is cause for concern.
Another company with plans to commence fracking in the pipeline is Coastal Oil and Gas. The company has plans to drill exploration wells in South Wales for coal bed methane and shale gas, it says it has no current plans for fracking but according to The Department for Energy and Climate Change (DECC), Coastal Oil and Gas has also submitted a planning application for a test site in Kent where fracking could potentially be used if further phases of exploration are pursued. So one to keep an eye on.
Give it a rest
Cuadrilla had to suspend any fracking following the two small earthquakes in Lancashire which its activities have been blamed for. The DECC is currently reviewing the findings of a study indicating that fracking was the very likely cause of the quakes in conjunction with the Health & Safety Executive, Environment Agency and British Geological Survey.
So fracking in the UK is on hold at the moment while the DECC says it 'carefully reviews the findings'. The practice has been banned in South Africa, at least for the time being.
Who's backing fracking?
As stated on its website, Cuadrilla Resources, owned in turn by Cuadrilla Resources Holdings Ltd is registered in the UK, and is privately owned by its management team and two substantial investors, Australian AJ Lucas Group and American Riverstone LLC, which each own a 39% share in the company. Lucas Group describes itself as Australia's largest specialist coal seam gas (CSG) drilling company.
On its website it describes Cuadrilla Resources Holdings Ltd as the holding company it established to hold its investment for unconventional hydrocarbon exploration and development in Europe. Hong Kong-based private equity firm Kerogen Capital recently invested $110 million in the company. This was announced, incidentally, just two days before Cuadrilla announced its 'big find' in Lancashire.
Private equity fund Riverstone is owned in turn by Canada's Fairfax Financial Holdings. Riverstone's website boasts that the company invests across the entire energy and power industry. In February 2010 it invested US$58 million in Cuadrilla to fund the next stage of its development through Riverstone/Carlyle Global Energy and Power Funds IV - a group of energy-focused private equity funds it manages, apparently based in the Cayman Islands - a well known tax haven.
Cuadrilla directors include Lord Browne, ex head of BP. The company has yet to produce any profit but last year its 12 directors awarded themselves a total of $3,200,000 in wages and shares.
Greenpark Energy is owned by Gel/Gpel Ltd which is owned half by Grace Greenpark Ltd, registered in the British Virgin Islands, another known tax haven and half by Electra Private Equity Partners 2001-2006 Scottish L.P., a subsidiary of Electra Equity via its subsidiary Kingsway Equity Partners LP.
Coastal Oil and Gas, based in Bridgend Mid Glamorgan, is owned by Thistle Gas which is owned in turn by UK Onshore Gas Ltd. All three share the same director Gerwyn Williams who owns a 90% share in UK Onshore Gas Ltd.
What can we do?
Local and national opposition is building in the UK and there are a number of groups campaigning on fracking. Cuadrilla's announcement of its 'big discovery' came just days after the Camp Frack protest camp, which brought together over 100 people from around the country including locals, on a site close to Cuadrilla's operations, near Hesketh Bank Village, to the south of Blackpool. The camp, organised by a number of groups including Frack Off, Ribble Estuary Against Fracking and Campaign against Climate Change, saw a weekend of organising meetings, workshops and film screenings and culminated in a march on the drilling rig.
In early November nine activists occupied Cuadrilla's drilling rig in Blackpool, while 75 others held a 'frackmob' to disrupt the Shale Gas Environmental Summit, a conference sponsored by a host of companies involved in the oil and gas industry which are trying to spin the rapid expansion into the untapped fossil fuel as ‘green’.
Barbara Cookson, a nurse and trade unionist who lives locally was involved in the recent rig occupation. She explained to Ethical Consumer why she was there: “For starters the experimental drilling involves the use of millions of gallons of water, 1% of which is contaminated with chemicals, and brings up radon and other toxic chemicals from deep in the shale.
There is ten times the amount of shale gas under Lancashire than there was gas discovered under the North Sea. Extracting it will leave a legacy of poisoned water in the area, which is relatively densely populated, as well as being prime agricultural land. Fracking in the US has only been carried out in areas of low population. Carbon dioxide emissions are already at a record high - runaway climate change is already a very real possibility.
Shale gas extraction is actually more polluting that coal extraction because of escaping methane. We don't need toxic fossil fuel extraction. Rather than this scraping of the bottom of the barrel we need to be leaving conventional fossil fuels in the ground. The only energy exploration we should be doing is into genuinely green renewable energy.”
Barbara warns people to be vigilant: “Planning permission applications are going in all over the country. Shale oil has now been discovered in the Pennines. In Lancashire local councillors say they could have blocked Cuadrilla's planning permission if they'd known what it was about, so people need to raise awareness and object.”
Ribble Estuary Against Fracking REAF
Campaign Against Climate Change
Keep your eye on these campaign websites. Shale gas investigations are ongoing in South Wales, the Mendips, and Dumfries and Galloway. Frack Off flag up planning applications on its website. Be on standby to get involved with or start up a local campaign group!
The Co-operative Group has also been actively campaigning against unconventional fuel sources since 2009. They have funded research into shale gas.
There is also a film 'Gasland' describing the growth of the industry in the USA: