Frack Attack: Application For Britain`s First Unconventional Gas Development

Nov 2014 UPDATE – For a full round-up of the situation in Scotland click here…

Dart Energy has submitted planning applications (see: P/12/0521/FUL and 12/00576/FUL)to Falkirk and Stirling County Councils, in Scotland, to build 14 new well pads with 22 new wells, around 20 km of pipelines to connect the sites, a gas processing facility and an waste outfall into the Firth of Forth, near Airth between Falkirk and Stirling. Their aim is to produce Coal Bed Methane (CBM) from coal seams around 850 metres below the farmland to the west of Airth. This would be the first serious unconventional gas development in the UK, which involves gas production rather than testing. Dart and IGas, in Cheshire, have been producing small amounts of gas from a couple of wells and burning it on site to produce electricity. However this development will involve producing gas from a number of wells and feeding it into the national gas grid through a network of pipelines. Dart, and its predecessor Composite Energy, have previously drilled a number of test wells at the Airth site and two of the test sites will also be redeveloped into production facilities. Dart own the PEDL 133 licence block which covers a large area between Stirling and Falkirk, on both sides of the Firth of Forth.

Location of proposed unconventional gas development by Dart Energy west of Airth in Falkirk (Blue squares indicate new well pads; Red lines indicate pipelines and well laterals)

While 14 well pads may seem fairly modest, especially if you don’t have to live next to them, this is just the thin end of what could become a massive wedge aimed at the heart of the British countryside. Investor documents mention 35-45 wells in the Airth development so it appears there are already plans to expand this initial development even further. Beyond the immediate vicinity of Airth the PEDL 133 block covers 367 square kilometres of central Scotland and Dart is bragging to investors that the block may contain 597 billion cubic feet (bcf) of CBM resources (2C) (also in 2012 presentation p19), which might require 600+ wells if it could all be exploited (Dart are claiming they could get 1 bcf out of each well in total). In fact, in their environmental statement for the planning application Dart say that other ‘clusters of wells are also planned for elsewhere in the License area’. On a larger scale Dart expects there to be around 4 times as much gas in its license blocks in the East Midlands, Cheshire, Staffordshire, Wales and Yorkshire, which could mean thousands more wells across Engalnd and Wales. Add on top of this potential CBM exploitation by other companies like IGas and a parallel wave of Shale Gas extraction and we are looking at the threat of the wholesale destruction of vast swathes of the British countryside.

Dart Energy is presently involved in a major battle with the community in Fullerton Cove, New South Wales where it is trying to drill 2 pilot CBM wells. In August residents blockaded the entrance to the Dart site for 9 days in order to halt construction. The blockade was only brought to an end when Dart called in police to violently break the blockade, arresting a number of residents. In September the residents gained a temporary injunction preventing drilling at the site. Dart have recently vacated the site and removed its signage and machinery from the area pending the outcome of the case.

Dart was split off from Australian CBM company Arrow Energy, as an independent entity, when Arrow was bought by Shell and PetroChina in 2010. It consists of Arrow’s international assets plus some areas in New South Wales. In early 2011 Dart bought Composite Energy which owned a number of licences across the UK including the PEDL 133 block. In late 2011 the also bought Greenpark Energy, making Dart by far the largest unconventional gas company in the UK. In August Dart secured a $100 million loan facility from HSBC to fund its operations. Interestingly though Dart is trying to sell its international operations, including those is the UK, and after failing to convince Australian investors is now looking to the City of London.

Coal Bed Methane extraction began in the US and has exploded over the last decade. More than 55,000 CBM wells have been drilled in the US and over 5,000 wells (with up to 40,000 wells expected) in Australia, where its is usually called Coal Seam Gas (CSG). This has resulted in a massive public backlash in both countries, particularly Australia where advanced warning of the negative effects has allowed communities to organise to resist it much earlier. CBM is a type of unconventional gas extraction, very similar in most respects to Shale Gas except the gas is extracted from a coal seam rather than a layer of shale. Coal, like shale rock, is not particularly permeable, and gas will not flow through the rock, so wells need to be drilled all across the landscape to get at the gas. In Australia around 10 percent of CBM wells are fracked at present but that is expected to rise to 30 percent or more as the easiest to extract gas is exhausted. Regardless of whether they are fracked, CBM wells are associated with a similar litany of negative impacts to Shale Gas, including water contamination, air pollution, toxic spills and emissions of gases causing climate change.

In the case of CBM, the seams tend to be much closer to the surface than shale rock and also differ in that they are flooded with water. The main method of stimulating CBM wells is de-watering of the coal seam, rather than hydraulic fracturing, though hydraulic fracturing may also be needed to increase the permeability of the seam. De-watering involves pumping out millions of gallons of contaminated water (which has been marinading in coal for years) and disposing of it. In many cases the cost of disposing of the produced water is the determining factor in whether the process is economic or not and there is a lot of pressure to minimise costs of disposal. The produced water can be up to 5 times more salty than sea water and may contain a variety of toxic and radioactive materials including heavy metals and hydrocarbons. In the US all sorts of scams have been used to dispose of produced water more cheaply, including spreading it on roads under the guise of dust suppression or gritting.

In Dart’s case they plan to dump all their produced water into the Firth of Forth via an outfall pipe, after minimal treatment. Dart are expecting to be extracting around 80,000 gallons per day of produced water once the proposed development is in operation. Dart plan to drill a number of multi-lateral horizontal wells with lengths of around a kilometre where each of 4 laterals runs through a different coal seam. Each of these horizontal wells will be intersected by a vertical production well through which the gas and produced water will flow to the surface. No mention of hydraulic fracturing is made but given the legal grey area that hydraulic fracturing occupies in the UK, it would seem impossible to prohibit it from happening in the event that it’s needed to enhance production. Dart envisage 2-3 work-overs of the wells per year where, in addition to other maintenance, hydraulic fracturing could potentially be performed. In any event the whole process of coal bed methane extraction has shown itself to be hugely damaging in Australia and the western United States, regardless of whether hydraulic fracturing is used. In the European context with much higher population densities the effect on nearby communities will greatly magnified.

As with all unconventional gas development the most important factor is the massive numbers and densities of wells that are needed to sustain production. Once production from a well has peaked, after about a year or so, it is all downhill from there with 45 percent declines per year to be expected. Dart will need to keep drilling new wells as production from older ones decline if it wants to maintain, let alone grow production. For this reason this proposed tumour in Airth would be bound to spread across central Scotland and other parts of the UK. With a Slumberger study finding that 6 percent of gas wells are showing signs of leaking as soon as they are drilled and this rises to 50 percent within 15 years, any sort of unconventional gas extraction which involves coating the landscape in wells will therefore create a legacy of thousands of leaking wells. Even if Dart drilled the hundreds of wells it appears to be hoping for in the PEDL 133 block, the total amount of gas it could produce, spread over many years, would only amount to a few weeks worth of UK consumption. Profitable for Dart no doubt, but at everyone else’s expense. It should also be noted that due to the high cost of CBM extraction the gas produced is always going to be expensive and is far more so when the environmental impact of this dirty industry is taken into account.

Nov 2014 UPDATE – For a full round-up of the situation in Scotland click here…