Onshore Oil and Gas in the UK About UKOOG UKOOG is the representative body for the UK onshore oil and gas industry including exploration, production and storage. The organisation’s objectives are to: • enhance the profile of the whole onshore industry (both conventional and unconventional); • promote better and more open dialogue with key stakeholders; • deliver industry wide initiatives and programmes; and environment management and operations. Membership is open to all companies active in the onshore industry including those involved in the supply chain. Issue 1 October 2013 Contents The History of Onshore Oil and Gas .................................................................................................... A1 What is the history of the onshore oil and gas industry? ................................................................. A1 Onshore Oil and Gas Regulation .......................................................................................................... B1 Who regulates the onshore oil and gas industry? ............................................................................ B1 What is the process? ......................................................................................................................... B1 Who is responsible for what? ........................................................................................................... B2 What is the industry’s role? .............................................................................................................. B3 Natural Gas uses and Origins ............................................................................................................... C1 What do we use and gas for?............................................................................................................ C1 Where does the UK currently get its gas from? ................................................................................ C1 Why is natural gas from shale important? ........................................................................................ C2 Prices, Costs and Benefits ................................................................................................................... D1 What has been the impact of shale gas in the United States? ........................................................ D1 How are global gas prices determined and traded? ........................................................................ D1 What are commentators saying about UK prices and shale? .......................................................... D2 What would process be without shale?........................................................................................... D2 What is the Industry’s view on gas prices? ...................................................................................... D3 What does the Exchequer make out of oil and gas and will this continue? .................................... D3 What affects the cost of shale gas and what will the costs be in the UK? ...................................... D3 What will be the benefits? ............................................................................................................... D4 What will be the impact on jobs? .................................................................................................... D4 What is the estimated recovery rate from a well in the UK? .......................................................... D4 Geology ................................................................................................................................................. E1 Where do oil and natural gas come from and how is it formed? ..................................................... E1 Are there different types? ................................................................................................................ E1 What are the differences between conventional and unconventional hydrocarbons? ................... E2 Development and the Drilling Process ................................................................................................ F1 What are the different stages of development of an onshore oil and gas field? ............................. F1 How is gas extracted from the ground?............................................................................................ F2 How do you test and monitor the casing and cement? .................................................................... F5 Emissions ............................................................................................................................................. G1 Will the widespread extraction of shale gas help to reduce carbon emissions? ............................. G1 Issue 1 October 2013 How does shale gas compare to other fuels? .................................................................................. G1 What are fugitive emissions? ........................................................................................................... G2 What is the industry doing about fugitive emissions? ..................................................................... G2 What scientific evidence has been produced on emissions? .......................................................... G3 Water and Soil ..................................................................................................................................... H1 How much water is used? ................................................................................................................ H1 How is water usage managed and regulated? ................................................................................. H1 Can hydraulic fracture fluids leak into the water supply? ............................................................... H1 What is in hydraulic fracturing fluid? ............................................................................................... H2 Can methane leak into the water supply? ....................................................................................... H2 What about surface spills? ............................................................................................................... H3 Can oil and gas extraction cause naturally occurring radioactive material to leak? ....................... H3 How is NORM regulated? ................................................................................................................. H4 What happens to fracturing wastewater? ....................................................................................... H4 What does the industry do to prevent soil contamination? ............................................................ H5 Seismicity and Micro Seismicity ............................................................................................................ I1 What causes earthquakes? ................................................................................................................ I1 How are earthquakes measured? ...................................................................................................... I1 Are there earthquakes in the UK? ..................................................................................................... I1 What is induced seismic or micro seismic activity? ........................................................................... I1 Can hydraulic fracturing cause earthquakes? .................................................................................... I1 What is the industry doing to mitigate induced seismicity?.............................................................. I2 Will hydraulic fracturing affect my buildings insurance?................................................................... I3 Community Engagement ....................................................................................................................... J1 What will onshore oil and gas exploration mean for me? ................................................................. J1 How will community be defined? ...................................................................................................... J4 Issue 1 October 2013 Fact Sheet: The History of Onshore Oil and Gas What is the history of the onshore oil and gas industry in the UK? The onshore exploration of home-grown sources of oil and gas in the UK can be traced back to 1850. Despite some commentary the onshore oil and gas industry, and the techniques used by it, are not new. 1850 to 1918 1918 to 1934 Before the First World War, the UK’s total The first oil in England was discovered in 1919 petroleum requirements, at less than 50,000 at Hardstoft, in Derbyshire. Despite the 1918 barrels per day, were supplied almost legislation, only 11 wells were drilled between exclusively via imports. The only home-grown 1918 and 1922 with only one discovery supply came from the production of oil from proving to be commercial. shale, which started in 1851 in the Midland Valley of Scotland and at its peak in 1913 1934 to 1964 reached an average of 6,000 barrels of oil per day – and continued until 1962. In 1934, the Government produced the second major piece of legislation, The The earliest reports of hydrocarbons in Petroleum (Production) Act 1934, which southern England come from the Sussex area, effectively gave the ownership of petroleum with gas detected in water wells in 1836 and to the Crown and limited surface owner 1875. rights. In 1935, the first licences were introduced