Fracking plans, bans and bangs
Drilling companies face losing licence areas this month
Oil and gas companies operating more than 40 onshore oil and gas licences face losing at least part of their acreage at the end of this month.
A group of licences issued in 2008 come to the end of their first term on 30 June 2016.
Under a requirement of the Petroleum Exploration and Development Licence (PEDL) operators must complete their work programme and give up half their licence area if they want to continue to a second term towards production. Details
Where operators have not completed their work programme the Oil and Gas Authority (OGA), which oversees licences, may refuse a second term and the operators must give up all their licence area.
According to data from the OGA, 45 licences are coming to the end of their first term this month. They are in the East Midlands, North West England, South Wales, Yorkshire, central Scotland and the Weald basin.
They include key licences, such as PEDL165. This is held by Cuadrilla in Lancashire and includes the sites at Roseacre Wood and Preston New Road, where the company wants to frack up to eight wells. A decision on these plans rests with the Communities and Local Government Secretary.
The licences affected are held by 21 companies.
More than a third (17 out of 45) are held by IGas or its subsidiaries (Dart Energy and GP Energy). Another six are held by companies run by Gerwyn Williams in south Wales (UK Methane and Coastal Oil and Gas).
The work programme for a PEDL licence usually includes a commitment to drill at least one well in order to go to the second term.
Celtique Energie faces losing three licences in the West Sussex Weald (PEDLs 231, 234 and 243) because it has not yet drilled a well.
A total of 30 wells (including sidetracks) were drilled in the affected areas since the licences were issued in 2008. But all the wells were in 19 licence areas and 6 of the 30 were drilled by Cuadrilla in PEDL165. No wells were drilled in the remaining 26 licences.
first term and notice period
All the licences initially had a first term of six years. But the government extended the term for a further two years under a Deed of variation. (Example here: PEDL189 executed Deed of Variation to increase the Initial Term for 2 years. The second terms were shorted by two years and are still due to expire in 2019.
Operators which want to move to a second term must give the OGA one month’s notice of the end date. That notice period ended this week on 31 May 2016.
We asked Cuadrilla whether it had given notice to the OGA of its intention to proceed to a second term, and which area of PEDL165 was it proposing to surrender. A spokesperson said:
“Cuadrilla can confirm that it has written to the Oil and Gas Authority regarding the second term of its PEDL 165 licence”.
But the spokesperson would give no further details. We’ve had no response to the questions we put to the OGA.
Licences which are relinquished usually go into the next government auction round. There are no details yet of when this will be.
IGas fracking plans
IGas has also announced it plans to frack and flow test wells in north west England. The company’s report for the nine months to 31 December 2015 said:
"We are in the process of identifying a number of sites for further appraisal drilling and hydraulic fracturing of the wells to determine flow rates and assess commerciality. The results from the 3-D survey will determine our future exploration and appraisal work programme in the area."
A spokesperson for the company said:
“The siting of the flow test applications will be dependent on the full results of the 3D [seismic surveying] interpretation later in the year.”
IGas has 14 current exploration licences in north west England. It drilled the Barton Moss (also called Irlam) exploration well in Salford (PEDL 193) in 2013/14, taking samples of rock from coal measures and the Bowland shales.
In Cheshire, the company drilled shale gas wells at Ince Marshes (PEDL190) in 2011/12, where it said it discovered shale about 1,000ft thick, and at Ellesmere Port (PEDL184) in 2014.
Comments on Nottinghamshire plans
A public consultation has opened into plans by IGas for a single shale gas exploration well at Tinker Lane, in Torworth, north Nottinghamshire. It runs until Friday 8 July 2016. A decision by Nottinghamshire County Council is not expected before September. The application does not include fracking but IGas has said it may apply for permission to frack the vertical well or drill and frack a horizontal well.
Scottish parliament votes in favour of a ban on fracking
An alliance of Labour, Greens and the Lib Dems has won a vote in the Scottish Parliament supporting an outright ban on fracking after SNP members abstained.
The motion, which was opposed by Conservative MSPs, called for the ban to “meet Scotland’s climate change goals and to protect the environment.
The vote was 32 in favour, 29 against and 62 abstentions. It is not binding on the SNP Government.
During the debate, Labour’s Claudia Beamish said:
“We must say no to fracking. No ifs, no buts, no fracking. Fracking is just another fossil fuel and we don’t need it.”
She has written to the Scottish economic secretary, Keith Brown, urging him:
“You have an opportunity now to reflect the new composition of the parliament and work with the centre-left parties to deliver an outright ban.”
SNP members said the party was “deeply sceptical” about fracking. They argued that a ban would be challenged by fracking companies if it were introduced before a research programme and public consultation were completed later this year.
There is currently a moratorium on shale gas, coal bed methane and underground coal gasification.
The vote was welcomed by Friends of the Earth, while INEOS Upstream, which hopes to frack for shale gas in Scotland if the moratorium is lifted, said the vote made little difference. More reaction
Aurora prepares for seismic surveys
Aurora Energy Resources is expected to begin seismic surveying in parts of Sefton and West Lancashire this month.
The company says the work, in its PEDL164 licence area, involves siting an array of geophones across the survey area. They record reflected signals generated by buried charges or vehicles, often called thumper trucks, fitted with vibrating plates (above). The work does not need planning permission.
Seismic surveying work in other parts of Lancashire led to allegations of trespass and damage to property.
The plans have prompted local opposition and councillors have organised meetings to inform residents. Cllr Maureen Mills said:
“Residents need to know they do not have to allow these people to gain access to their properties without consent.
“There is action they can take if this happens and at the public meetings as part of the presentations we will ensure people are fully aware of their rights.”
Ian Roche, Aurora’s managing director said:
“Local press notices and leaflets to residents and businesses in the survey area will go out in the period leading up to the survey”.
Aurora’s proposal to carry out seismic testing in the area (shaded brown above) dates back to 2014 but was delayed, partly because some landowners did not agree to agree to allow access.
Oil and gas companies can apply to the Secretary of State for Energy and Climate Change for what is known as ancillary access rights if landowners refuse.
A Freedom of Information Act request revealed that in Aurora’s case it had applied for access rights after being refused entry by 46 landowners. This number was later reduced to four and then to one. Court action by Secretary of State against a single landowner has been postponed pending negotiations with Aurora.
Aurora said the work was expected to last four to six weeks. The timing is critical because TESLA, the company carrying out the surveys, agreed in 2014 to complete the work by 15 August to protect sensitive wintering and migrating birds in the area.
£4m investment in drilling in southern England
UK Oil & Gas Investments, one of the companies with interests in the Horse Hill exploratory oil well near Gatwick, has announced it is to invest an extra £4m in the Weald basin in southern England.
The company said the money would be used to further its existing Weald Basin portfolio activities and for potential investment in new onshore oil and gas activities in southern England.
UKOG has a two-year plan for the Horse Hill well designed to establish whether it is commercial. The company has also said it would be involved in other wells across the Weald Basin
Its chief executive, Stephen Sanderson, told the Shale World UK conference:
“We have spoken to 10 Downing Street. They are quite supportive. The thing they like about this most of all is not just the fact that it provides indigenous hydrocarbon to give you ultimate energy security … but what they’re really interested in, I suppose, is the revenue to their Treasury.”
In February, UKOG tested the flow of oil from Kimmeridge and Upper Portland rock sections of the Horse Hill well. It described the results as “outstanding” and at rates equivalent to the North Sea.
Planning permission has now expired but UKOG is proposing to carry out production tests on two sections of the well, each of 90 days.
Mr Sanderson said:
“We plan to go in and do these long-term tests hopefully in the winter of this year. If that’s successful, we’ll immediately go in and drill a horizontal production well in one of the Kimmeridge limestones. We’ll be shooting 3D seismic so that we’re able to plan to drill more and locate more horizontal wells.”
Mr Sanderson said he envisaged between 20 and 100 well sites across the Weald, each of 4-6 acres. He said:
“Because of the ubiquitous nature of this type of deposit you can actually cherry pick for development sites in places that are less environmentally sensitive, such as brownfield sites and there are quite a number over the Weald that we could utilise.
“You could also site it away from villages and small roads. So you can minimise the actually day to day impact on the area.”
100,000+ demand government publishes fracking climate advice
More than 100,000 people have signed a petition calling on ministers to publish advice on the impacts of fracking on UK climate targets.
A report by the Committee on Climate Change was delivered to the Department of Energy and Climate Change (DECC) more than seven weeks ago on 30 March 2016.
But so far the government has not laid the advice before parliament, despite a legal requirement to do so as soon “as practicably possible”.
The 2015 Infrastructure Act requires the Energy and Climate Change Secretary to request advice from the Committee on Climate Change (CCC) every five years about fracking and onshore oil and gas. The advice should cover the impact of onshore oil and gas activities on meeting carbon reduction targets and the carbon budgets. Specifically, the advice should look at “combustion of, and fugitive emissions from, petroleum got through onshore activity”.
The act also requires the Energy and Climate Change Secretary to lay a copy of the advice before Parliament as soon as practicable after each reporting period. The current reporting period ended on 1 April 2016.
The petition, by 38 degrees, was launched late last month. At the time of writing, the number of signatures had reached more than 103,000.
The shadow Energy Minister, Barry Gardiner, asked a written parliamentary question on the when the report would be laid before Parliament.
The Energy and Climate Change Minister, Andrea Leadsom, replied:
“The Department [DECC] has received the Committee on Climate Change report. We are considering the report and will lay it before Parliament with our response in due course.”
A DECC spokesperson gave me a few more details:
“The Infrastructure Act clearly requires Government to consider the CCC report properly before responding, and that is what is happening.
“As such, if we had laid the CCC’s report before Parliament as soon as we received it we would not have met our legal requirements.
“We are carefully considering this report to ensure it is given the proper consideration it is due. It will be published as soon as that process is complete.”
Some opponents of fracking have argued that the advice should have been available to North Yorkshire County Council when it made its decision on 23 May 2016 about Third Energy’s plans to frack near Kirby Misperton. More details here.
Ruth Hayhurst is the only journalist reporting from the fracking front lines across the UK. Her website DrillOrDrop.com has daily updates and posts
Picture at top of post by Bassetlaw Against Fracking