UK Task Force Concludes that Shale Gas Drilling Can Be Safely Conducted and Recommends Exploratory Drilling with Tight Regulation

What are the Task Force’s Key Conclusions?

Echoing the conclusions of recent academic and governmental studies in the U.S., the Task Force found that any risk to the local environment or public health associated with gas extraction is not a result of “issues with the process of hydraulic fracturing itself”; rather, such risks relate primarily to well construction. Like USEPA before it, the Task Force concluded that recent U.S. studies show “an extremely low likelihood of contamination of aquifers” from the upward migration of fluids and gas through rock formations at depths where the separation distances are greater than 1000 meters. Accordingly, the Task Force declined to include such fluid migration among the four pathways to contamination it identified.

The Task Force went on to conclude that “[s]hale gas can be produced safely” in the UK. It further concluded that the “risk from shale gas to the local environment or to public health is no greater than that associated with comparable industries provided, as with all industrial works, that operators follow best-practice.” Accordingly, the Task Force presented a number of recommendations to ensure that shale gas drilling in the UK occurs safely, including recommendations for:

• Baseline monitoring at drilling sites;
• An emphasis on the “highest standards” for well integrity;
• Mandating “green completions” for production wells;
• “[F]ull disclosure” of the chemical content of substances used in shale gas exploration and production; and
• “[A] risk assessment of aquifer contamination . . . where appropriate, with the level of detail increasing as the separation distance decreases,” presented in an earlier Task Force report.

The Final Conclusions and Recommendations further recommend that “[o]perators . . . agree that the specific composition [of materials used in shale gas exploration and production] will not exceed levels mandated by the Environment Agency,” suggesting a more prescriptive approach to the regulation of fluids used in the fracturing process than the disclosure-based system employed by U.S. jurisdictions.

What is the UK Task Force on Shale Gas?

The UK Task Force was created “to provide a transparent, trusted, independent and impartial platform for public scrutiny, discussion and information about shale gas exploration and production in the UK.” Though it was funded by six companies, its Task Force Constitution mandated that the Task Force operate independently of its funding organizations. To ensure that this mandate was achieved, Lord Chris Smith, former Chair of the UK Environment Agency, led its efforts and composed a panel of academics with expertise in geology and engineering especially relevant to shale gas exploration and production, industry advisors with expertise in oil and gas exploration and production, and environmental professionals.

Over the course of a year beginning in September 2014, the UK panel assessed the potential environmental impacts, regulatory systems, best management practices, and economic consequences associated with shale gas exploration and production in an effort to help enable “well informed decisions on the future of shale gas in the UK.” The process included public meetings and the publication of four interim reports: (1) Planning, Regulation and Local Engagement; (2) Assessing the Impact of Shale Gas on the Local Environment and Health; (3) Assessing the Impact of Shale Gas on Climate Change; and (4) The Economic Impacts of a UK Shale Gas Industry.  

What is the Path Forward for Shale Gas Drilling in the UK after the Task Force Report?

The work of this Task Force coincides with a strong push by the UK government for onshore shale gas drilling. Following the release of the Task Force’s report, the UK’s Oil and Gas Authority announced on December 17 an offering of new licenses for onshore unconventional exploration of oil and shale gas. Companies receiving the licenses will need to secure approvals, including applicable permits from the UK’s Environment Agency, and it may take several years before drilling begins under these licenses. The current government has expressed strong support for promoting shale gas exploration, and the offer of new licenses is the latest in a series of government actions to further that end, including the recent approval of a measure to allow shale gas drilling below national parks in the UK.

Details regarding the Task Force and its findings and conclusions may be found here. 

For further information, please contact Vinson & Elkins lawyers Chris, Strong, Jay Rothrock, or one of the members of V&E's Shale and Fracking practice group.