Frack to the future

Frack to the future

Extraction estimates of 10% would generate an energy boost for the UK of 130 trillion cubic feet, enough to power the nation for the next 50 years.

What is fracking?

Fracking is short for hydraulic fracturing. It is the process of extracting gas from the ground using a highly pressurised mixture of water, sand and chemicals. This concoction is injected into layers of rock to release the gas inside.

Hydraulic fracturing is not simply a drilling technique, but a means for enhancing the production of oil and gas reserves, from both new and existing oil and gas wells. Use of a high pressure water mixture injected into rock formations, both vertically and (more commonly) horizontally, creates small fractures within the rock. This allows for previously untapped gas and oil to be released and extracted. Carried out at depths typically between 5,000 – 20,000 feet, fracking is required to enhance the permeability of the more unconventional shale rock and allow for a
more efficient flow of natural gas and oil.

Commercial Development

The process has been commercially operational in the United States since the 1950s and commonplace in the North Sea since the 1970s. However, fracking has only recently attracted nationwide attention, following the application for shale gas exploration licenses across the UK.
Shale gas reserves have been identified across the UK, particularly northern England, with exploratory drilling being carried out since 2007; however no fracking has taken place as yet. Whilst the UK has so far refrained from fully embracing the technology due to their environmental concerns, recent studies have shown the potential for substantial energy production. Precise figures on shale gas reserves are difficult to obtain, however, estimates from the British Geological Survey have suggested around 1,300 trillion cubic feet of shale gas in the north of England alone, double the quantity previously thought to be available. Extraction estimates of 10% would generate an energy boost for the UK of 130 trillion cubic feet, enough to power the nation for the next 50 years.

One major concern for the UK is that as yields from wells decline over a very short timescale, a large number of new wells are required to maintain production. This issue may be more problematic for the densely populated UK, than those experienced in sparse US states such as North Dakota.

An American success

In the United States, where fracking is more advanced, there has been a raft of economic benefits from the increased gas yields, which supporters believe the UK could emulate. By 2012, the United States had surpassed Russia as the world’s largest producer of natural gas, helping to drive down US gas prices to less than a third of the gas prices in Europe. The resulting energy boom has bolstered the manufacturing sector, generated over 2 million new jobs and added $75 billion in tax revenues. Overall, shale gas reserves in North America are estimated to provide energy security for 100 years.

Frack-to-the-future---Utilitywise

Recent progress

The controversial process of fracking is set to remain at the forefront of energy conversations in 2016 as the UK Government presses ahead with plans to utilise the process.

The identification of new shale gas reserves since 2013 has the potential to provide energy security across the UK for the next 50 years. However, concerns lie in the controversial method of extraction. Fracking in the US began amidst a backdrop of environmental protests. Two years on from the initial UK discoveries, the Conservative Government has pushed forward with plans to develop a shale gas industry as energy security becomes the focus of policy ahead of decarbonisation.

Want the full report?

Get Frack to the Future - download the full report

Ross Moffat

Posted by on Friday, the 20. May at 16.42

Ross Moffat has been a part of the Market Intelligence team at Utilitywise since early 2014. His responsibilities include delivering Market Intelligence reports to clients and managing the Utility Insights Twitter account. Ross has a first class Honours degree in Business and Marketing from the University of Stirling.