This blog is based on a submission to Surrey County Council regarding application SCC Ref 2018/0152 for the drilling of four more hydrocarbon wells and one reinjection well, site expansion, workover and sidetrack drilling, and production from six wells for 25 years at Horse Hill.
- The strata targeted by the proposed wells are interbedded micrites (references to the “Kimmeridge Limestones” are misleading) and shales of very low permeability – an unconventional reservoir. Unconventional reservoirs likely require stimulation such as acidisation or hydraulic fracturing to produce commercial quantities of hydrocarbons.
- Current Surrey Minerals Plan was adopted in 2011, before unconventional hydrocarbon reservoirs were identified in the UK. It lacks specific policies, creating a void in the local planning system.
- The National Planning Policy Framework’s definition of fracking is broad and includes acid stimulation techniques, which are planned in the Weald according to an industry sponsored paper. One of the key planning policies developed elsewhere in the country for fracking sites is a min 500m buffer zone. Well density is also a key consideration given the requirement for back-to-back drilling to scale production.
- There are significant inconsistencies in the definition of fracking across the UK onshore oil and gas regulatory regime. This presents a challenge with respect to monitoring and enforcement of breaches.
Background – The Kimmeridge Clay Formation – Unconventional Target Reservoir
Three out of the four new production wells proposed in this application are targeting the so-called Kimmeridge limestones, which are inter-bedded with shale layers forming the Kimmeridge Clay Formation (KCF) hybrid reservoir. The KCF stretches across the Weald Basin and is currently pursued at various drill sites in Surrey and West Sussex including Brockham, Broadford Bridge, and Balcombe. David Smythe, Emeritus Professor of Geophysics in the University of Glasgow, points out that the so-called limestones of the KCF are very impure and have high content of mudstone (shale) and he concludes that “both the micrites and the shale have extremely low permeability, and will require to be fracked if oil is ever to be exploited commercially from the KCF”. Permeability (the ability to allow fluid to pass through it) is a key measure used to determine whether a reservoir is conventional or unconventional, i.e. requiring stimulation such as acidisation or hydraulic fracturing (fracking) to flow hydrocarbons. The permeability of the Kimmeridge micrites is between 0.02 and 0.032 mD (and that of the shale layers is even lower) – well below the generally accepted boundary of 0.1 mD below which a formation is considered unconventional.
In addition, according to a 2014 study of the Jurassic shales of the Weald Basin by the British Geological Survey and the Oil and Gas Authority (then Department of Climate Change), a close analogue to the KCF is the Bakken Formation of North Dakota – unconventional hybrid reservoir that requires fracking to produce commercial quantities of hydrocarbons.
Even if it is assumed that HHDL will contain their extraction to the so-called limestones (although from an engineering point of view it seems difficult if not impossible to limit extraction to these layers only, if oil is found in a single pool within the fracture network present across at least two so-called limestones separated by shale) which the company says will not require fracking, the micrites are only the first target, the main target being the entire Kimmeridge Clay Formation, as explained by Stephen Sanderson, Executive Chairman of UK Oil & Gas Investments PLC (HHDL’s parent company). However, once this application is approved, the planning authority is unlikely to be consulted on any changes to the target geological layers as this will be within the remit of the Oil & Gas Authority. Therefore, Surrey County Council (SCC) should consider that this application is for wells that will be used for the extraction of Kimmeridge shale oil from the entire Kimmeridge Clay Formation.
Policy for Shale Oil (Unconventional Oil Resource) and Fracking
SCC’s Q&A document Oil and Gas Development in Surrey classifies shale oil as unconventional oil resource which “has to be extracted using a technique known as hydraulic fracturing or, more commonly, as fracking.” The document says that shale oil is likely to be present in Surrey, citing the BGS/OGA study of the Jurassic Shales of the Weald Basin already mentioned above, but that none of the operations – either existing or planned – are for unconventional oil extraction. We propose that this is incorrect; both Horse Hill and Brockham are unconventional oil sites.
The Surrey Minerals Plan Core Strategy 2011 doesn’t offer any policies for unconventional reservoirs; it doesn’t even mention the words unconventional or fracturing. Therefore, if SCC recognised that this application is for unconventional shale oil extraction that will require fracking or acidising, it would have to look to the national planning policy, and to other local minerals planning authorities, which started developing policies for fracking sites. In particular, the North Yorkshire Minerals Plan is going to be the first plan in the country that includes policies on fracking. This plan was discussed in April 2018, when a planning inspector provisionally approved proposals for a minimum 500m buffer zone between fracking sites and homes or schools to protect against significant impacts such as noise, light pollution, negative health effects due to flaring for example, visual and other, unknown impacts.
According to the planning statement submitted as part of the Horse Hill application, there are 16 residential properties within 500m radius from the site: Wray’s Farm House, approximately 370m to the east, Five Acres approximately 410m southeast and High Trees Court (14 flats) approximately 350m to the north. The access road is in closer proximity to residential properties with the entrance being located near to Wray’s Farm House. The statement fails to mention the Lomond Equestrian Centre, which borders with the site, and which was significantly affected by flow tests at the Horse Hill site in 2016. Impacts included noise, lighting overnight, smells and health effects. Local press reported that “four people have had nosebleeds, two of whom have never had them before, while two horses in particular are suffering runny noses and eyes.” Clients as well as the business owner expressed concerns and worry.
The residential properties and the equestrian centre are at a high risk of significant negative impacts from this significantly expanded development.
Development of a shale reservoir is different from conventional oil and gas fields, where most of the development takes place up front ahead of any production. In shale, development is incremental, meaning that development and production progress simultaneously throughout the field life. Therefore pad density is another crucial consideration in terms of land use.
UKOG state in their Investor Presentation dated Nov 2018 that they plan 4 to 8 sites per 100km2, which is up to one site every 3.5km. Each pad would have multiple horizontal wells. The company also just announced a new proposed site in Dunsfold, Surrey and it said that it would submit an application to Surrey County Council in spring 2019 to drill, core and test the Godley Bridge Portland gas discovery and the underlying Kimmeridge. Therefore it would seem prudent for the planning authority to have a policy in place to manage long term land use and safeguard against potential significant cumulative effects arising from this incremental industrial development across the county.
“No Fracking” Condition
On the other hand, if SCC maintains that this application is for a conventional development, it might want to offer assurances that there will be no fracking taking place. The definition included in the National Planning Practice Guidance (NPPG) on minerals, paragraph 129 Reference ID: 27-128-20140306 is as follows:
Hydraulic fracturing is the process of opening and/or extending existing narrow fractures or creating new ones (fractures are typically hairline in width) in gas or oil-bearing rock, which allows gas or oil to flow into wellbores to be captured.
This definition covers not only the very high volume hydraulic fracturing, but also acid stimulation treatments such as acid fracturing and matrix acidisation – a process performed below fracturing pressure but which does extend existing fractures (through dissolving them with acid mixed with other chemicals). Acid stimulation is much less recognised and studied than high-volume hydraulic fracturing, but it has recently received increased attention; for example it is currently on route to being banned in the state of Florida, along with other forms of fracking. Acid stimulation uses lower volumes of fluid and lower pumping pressures than high volume fracking, but the number and concentrations of chemical is higher, raising concerns about the toxicity of this process. According to a paper commissioned by UK Oil & Gas Plc and authored by EY, a multinational consultancy, the Kimmeridge so-called limestones, even if naturally fractured, will require the use of acid stimulation.
In the event that SCC approves this application, the planning authority is likely to impose a condition that no fracking as defined in NPPG will be allowed under this planning permission (as it did for the Brockham wellsite). However, it is unclear how the planning authority would determine a breach of such a condition and how it would enforce it. The other regulators (i.e. the Oil & Gas Authority and the Environment Agency) define fracking in different ways. The NPPG definition of hydraulic fracturing used by planning authorities is very wide, whereas the volume-based definition in the Infrastructure Act 2015 (and its subsequent regulations) used by the OGA are very narrow. The Environment Agency has a different approach altogether. It uses a pragmatic assessment based on the materials, equipment and methods being used to determine whether hydraulic fracturing is taking place. Moreover, there doesn’t seem to be a mechanism anywhere in the current regulatory system for onshore oil and gas, by which it could be verified whether fracking operations that do not qualify under the volume-based definitions are actually taking place.