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Support to the identification of potential risks for the environment and human health arising from hydrocarbons operations involving hydraulic fracturing in Europe

Report for European Commission DG Environment - AEA/R/ED57281 Issue Number 11 Date 28/05/2012

Exploration and production of natural gas and oil within Europe has in the past been mainly focused on conventional resources that are readily available and relatively easy to develop. This type of fuel is typically found in sandstone, siltstone and limestone reservoirs. Conventional  extraction enables oil or gas to flow readily into boreholes.

As opportunities for this type of domestic extraction are becoming increasingly limited to meet demand, EU countries are now turning to exploring unconventional natural gas resources, such as coalbed methane, tight gas and in particular shale gas. These are termed ‘unconventional’ resources because the porosity, permeability, fluid trapping mechanism, or other characteristics of the reservoir or rock formation from which the gas is extracted differ greatly from conventional sandstone and carbonate reservoirs.

In order to extract these unconventional gases, the characteristics of the reservoir need to be altered using techniques such as hydraulic fracturing. In particular high volume hydraulic fracturing has not been used to any great extent within Europe for hydrocarbon extraction. Its use has been limited to lower volume fracturing of some tight gas and conventional reservoirs in the southern part of the North Sea and in onshore Germany, the Netherlands, Denmark and the UK.

Preliminary indications are that extensive shale gas resources are present in Europe (although this would need to be confirmed by exploratory drilling). To date, it appears that only Poland and the UK have performed high-volume hydraulic fracturing for shale gas extraction (at one well in the UK and six wells in Poland); however, a considerable number of Member States have expressed interest in developing shale gas resources. Those already active in this area include Poland, Germany, the Netherlands, the UK, Spain, Romania, Lithuania, Denmark, Sweden and Hungary.

The North American context

Technological advancements and the integration of horizontal wells with hydraulic fracturing practices have enabled the rapid development of shale gas resources in the United States – at present the only country globally with significant commercial shale gas extraction. There, rapid developments have also given rise to widespread public concern about improper operational practices and health and environmental risks related to deployed practices. A 2011 report from the US Secretary of Energy Advisory Board (SEAB) put forward a set of recommendations aiming at "reducing the environmental impact "and "helping to ensure the safety of shale gas production."

Almost half of all states have recently enacted, or have pending legislation that regulates hydraulic fracturing. In 2012, the US Environmental Protection Agency (EPA) has issued Final Oil and Natural Gas Air Pollution Standards including for natural gas wells that are hydraulically fractured as well as Draft Permitting Guidance for Oil and Gas Hydraulic Fracturing Activities Using Diesel Fuels. The EPA is also developing standards for waste water discharges and is updating chloride water quality criteria, with a draft document expected in 2012.

In addition, it is implementing an Energy Extraction Enforcement Initiative, and is involved in voluntary partnerships, such as the Natural Gas STAR program. The US Department of the Interior proposed in April 2012 a rule to require companies to publicly disclose the chemicals used in hydraulic fracturing operations, to make sure that wells used in fracturing operations meet appropriate construction standards, and to ensure that operators put in place appropriate plans for managing flowback waters from fracturing operations).The general European context
In February 2011, the European Council concluded that Europe should assess its potential for sustainable extraction and use of both conventional and unconventional fossil fuel resources.1 A 2011 report commissioned by the European Parliament drew attention to the potential health and environmental risks associated with shale gas extraction.

At present, close to half of all EU Member States are interested in developing shale gas resources, if possible. Member States active in this area include Poland, Germany, Netherlands, UK, Spain, Romania, Lithuania and Denmark. Sweden, Hungary and other EU Member States may also be interested in developing activity in this area. However, in response to concerns raised by the general public and stakeholders, several European Member States have prohibited, or are considering the possibility to prohibit the use of hydraulic fracturing. Concurrently, several EU Member States are about to initiate discussions on the appropriateness of their national legislation, and contemplate the possibility to introduce specific national requirements for hydraulic fracturing.

The recent evolution of the European context suggests a growing need for a clear, predictable and coherent approach to unconventional fossil fuels and in particular shale gas developments to allow optimal decisions to be made in an area where economics, finances, environment and in particular public trust are essential.

Against this background, the Commission is investigating the impact of unconventional gas, primarily shale gas, on EU energy markets and has requested this initial, specific assessment of the environmental and health risks and impacts associated with the use of hydraulic fracturing, in particular for shale gas.

Study focus and scope

This report sets out the key environmental and health risk issues associated with the potential development and growth of high volume hydraulic fracturing in Europe. The study focused on the net incremental impacts and risks that could result from the possible growth in use of these techniques. This addresses the impacts and risks over and above those already addressed in regulation of conventional gas exploration and extraction. The study distinguishes shale gas associated practices and activities from conventional ones that already take place in Europe, and identifies the potential environmental issues which have not previously been encountered, or which could be expected to present more significant challenges.

The study reviewed available information on a range of potential risks and impacts of high volume hydraulic fracturing. The study concentrated on the direct impacts of hydraulic fracturing and associated activities such as transportation and wastewater management. The study did not address secondary or indirect impacts such as those associated with materials extraction (stone, gravel etc.) and energy use related to road, infrastructure and well pad construction.

The study has drawn mainly on experience from North America, where hydraulic fracturing has been increasingly widely practised since early in the 2000s. The views of regulators, geological surveys and academics in Europe and North America were sought. Where possible, the results have been set in the European regulatory and technical context.

The study includes a review of the efficiency and effectiveness of current EU legislation relating to shale gas exploration and production and the degree to which the current EU framework adequately covers the impacts and risks identified. It also includes a review of risk management measures.Preliminary risk assessment.

The main risks were assessed at each stage of a project (well-pad) development, and also covered the cumulative environmental effects of multiple installations. The stages are:

1. Well pad site identification and preparation
2. Well design, drilling, casing and cementing
3. Technical hydraulic fracturing stage
4. Well completion
5. Well production
6. Well abandonment.

The study adopted a risk prioritisation approach to enable objective evaluation. The magnitude of potential hazards and the expected frequency or probability of the hazards were categorised on the basis of expert judgement and from analysis of hydraulic fracturing in the field where this evidence was available to allow risks to be evaluated. Where the uncertainty associated with the lack of information about environmental risks was significant, this has been duly acknowledged. This approach enabled a prioritisation of overall risks.

The study authors duly acknowledge the limits of this risk screening exercise, considering notably the absence of systematic baseline monitoring in the US (from where most of the literature sources come), the lack of comprehensive and centralised data on well failure and incident rates, and the need for further research on a number of possible effects including long term ones. Because of the inherent uncertainty associated with environmental risk assessment studies, expert judgement was used to characterise these effects.

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