COLUMN-Fracking beneath southern England's rolling hills: Kemp

Thu Jun 6, 2013 7:49am EDT

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(John Kemp is a Reuters market analyst. The views expressed are his own)

By John Kemp

LONDON, June 6 (Reuters) - Britain has had small but significant onshore oil and gas production for over 60 years. Ironically, most of the output has come from fields in prosperous and environmentally sensitive parts of southern England, where hostility to new drilling and hydraulic fracturing is strongest.

"It's one thing to have fracking in the vast plains of America," according to one Conservative Member of Parliament quoted in the Financial Times recently. "It's a whole different matter when people will see gas production in the rolling hills of Surrey."

The newspaper noted the petroleum-rich Wessex Basin corresponds with the heartland of Britain's ruling Conservative Party. "No fewer than 38 out of 62 MPs in the region have land with existing oil and gas drilling licences - and 35 of them are Conservatives" ("Britain's Tory MPs face fracking challenge" May 19).

The political subtext is that while fracking might be acceptable in northern counties that have struggled to recover from the collapse of the coal industry and heavy manufacturing in the 1980s, which tend to support the opposition Labour Party, it may not be welcome in prosperous rural areas of the south.

The recent Institute of Directors' report on "Getting shale gas working" concentrated on the benefits in the north, and was silent about the south. It noted "jobs could be created in parts of the country that need them most," contrasting the 15 percent rate of out-of-work benefit claims in the north west with less than 9 percent in the south east.

So it might come as a surprise to many people that southern England is already the largest producer of onshore oil and gas in the United Kingdom.

ONSHORE OIL AND GAS

More than 2,000 onshore wells have been drilled across the country, with major drilling booms during the Second World War and then again in the 1980s after the oil shocks, according to well records published by the Department of Energy and Climate Change (DECC).

Onshore fields have produced more than 500 million barrels of oil, although that compares with 23 billion barrels produced offshore since 1975, and the pattern is repeated for natural gas.

Onshore fields tend to be small by offshore standards. But the capital expenditure required to develop them is also smaller and they continue to provide economically attractive targets, according to the British Geological Survey (BGS) in a report on "Onshore oil and gas" published in March 2011.

Onshore petroleum output is dominated by fields in the Wessex Basin underneath the counties of East and West Sussex, Hampshire, Dorset and the Isle of Wight, extending into the English Channel.

Oil has also been produced from the East Midlands underneath Lincolnshire, Leicestershire and Nottinghamshire, and gas from North Yorkshire and the West Lancashire Basin (Charts 1 and 2).

By far the largest onshore field, however, is Wytch Farm, in the heart of the Wessex Basin, discovered in 1979, with estimated recoverable reserves of almost half a billion barrels of crude.

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UK onshore oil and gas wells: link.reuters.com/ryq68t

Location of wells by county: link.reuters.com/tyq68t

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WESSEX/CHANNEL BASIN

Wytch Farm's output peaked at around 100,000 barrels per day in 1996. It is the largest onshore field in Europe, and ranks in the top 10 UK oil fields, including those offshore, according to BGS.

Located on the edge of the Jurassic Coast World Heritage Site, production comes from dozens of wells on several sites, including some of the longest horizontal wells in the world, stretching up to 11 kilometres underground beneath Poole Bay, beneath some of the most expensive real estate in the country.

Wells are screened by thousands of trees to minimise the visual impact.

Some employ traditional nodding-donkey beam pumps, carefully painted in forest colours to camouflage them, and with sound boxes to limit noise to less than 33 decibels. Most, however, use downhole electric submerged pumps and are virtually invisible on the surface.

Oil is transported to a loading terminal by a 90-kilometre pipeline that skirts the southern fringes of the New Forest National Park.

Wytch Farm is on a unique scale, but there are other oil fields in production elsewhere in the Wessex Basin, stretching from Wareham in Dorset to Goodworth, Stockbridge, Avington, Horndean and Lasham in Hampshire, and Singleton and Storrington in West Sussex.

Other reservoirs in use for gas storage and/or oil production stretch as far north as Palmers Wood, Bletchingley and Lingfield in the county of Surrey.

These reservoirs are small but not negligible. Estimates put oil originally in place at 170 million barrels at Stockbridge, 70 million at Singleton and 43 million at Lasham, though the amount of oil that will eventually be produced will be much smaller.

Most reservoirs lie within the boundaries of the South Downs National Park or Areas of Outstanding Natural Beauty (AONB), where development is strictly controlled. But well sites are so well camouflaged they are invisible and virtually unknown, even to local inhabitants.

More onshore wells have been drilled in the southern counties of Dorset (264), Hampshire (117) and Sussex (82) than other part of Britain except Nottinghamshire (575), Lincolnshire (343) and Lancashire (115), according to DECC.

The full extent of oil and gas production across southern England is revealed in an extraordinary blog compiled by geologist Ian West, retired from the University of Southampton (www.southampton.ac.uk/~imw/Oil-South-of-England.htm).

NOT IN MY BACK YARD

Given that southern England is one of the biggest existing centres of oil and gas production, it is ironic that it has also become a centre of opposition to hydraulic fracturing for shale gas.

Balcombe in the middle of the South Downs National Park has become a cause celebre for environmentalists and residents' groups opposed to fracking. It is also in the heart of the Wessex Basin and one of the most promising sites for shale gas.

One well has already been sunk in Balcombe, by Conoco in 1986, but it was plugged and abandoned after initial flows proved disappointing and amid depressed oil and gas prices in the late 1980s and 1990s. Now Cuadrilla Resources has a petroleum exploration and development licence covering the area and hopes to achieve better results by drilling and fracturing the formation.

The company suspended its fracturing programme after pressure pumping one well at Preese Hall in the northern county of Lancashire, near to a faulted area, triggered a series of small earth tremors. But it has announced plans to resume fracturing at another well in the county, and wants to drill, but not yet fracture, an exploration well in Balcombe later in 2013.

"Drilling work will commence in the summer," the company announced on May 8. "Cuadrilla plans to drill and take samples of the underground rock in a vertical well drilled to approximately 3,000 feet. A possible horizontal leg of 2,500 feet may also be drilled ... neither ... will be hydraulically fractured," the company added.

There is intense concern about the impact that widespread drilling and fracturing might have on local communities.

"Because of the much more intense nature of the shale gas extraction process it is associated with much more negative impacts than conventional drilling. These include leaking methane, water contamination, air pollution, radioactive contamination, massive industrialisation of the landscape, worsening climate change and earthquakes," the Frack Free Sussex campaign complains on its website.

But given the intense care local authorities have taken to ensure that conventional oil and gas drilling does not blight local communities, it seems unlikely they will be any less careful with unconventional shale production.

Drilling multiple wells from the same site, and employing long laterals with multi-stage fractures, with careful screening and camouflaging, could in theory enable relatively large volumes of oil and gas to be recovered in an acceptable manner. The main problem is likely to remain traffic management.

There is some doubt about whether shale oil and gas could ever be produced on a sufficiently large scale to transform Britain's economic prospects, but there ought to be no barrier to developing a small but significant industry, even in the sensitive political and natural landscapes of southern England. (Editing by Anthony Barker)

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