Shale gas in the spotlight with fracking announcement

The utility company that supplies my gas and electricity wrote recently asking for a sum of money based on estimated energy usage in the last quarter.

The electricity side of the bill seemed reasonably fair but the gas element induced a rush to the meter and said utility company has now been supplied with a reading that will hopefully lead to a bill that is significantly lower than the estimate.

It won’t do, of course, and its moments like these that make you wonder if shale gas is key to bringing a slice of fiscal relief to squeezed households across the land.

Supporters of shale gas believe the untapped resource has the potential to reduce carbon emissions by replacing gas imports; will support manufacturing by providing secure energy supplies and raw materials for the chemical industry; and has the potential to benefit road transportation by replacing diesel and petrol.

London-based IGas owns licenses to explore 300 square miles of land in the north west England where an estimated 170 trillion cubic feet of gas awaits extraction. The company says it will commence drilling in the fourth quarter of this year and will further revise its estimates in due course.

In a recent report on the Electricity Market Reform, the Committee on Climate Change presented new analysis showing that there are ‘significant economic benefits from investing in a portfolio of low-carbon technologies through the 2020s rather than investing in gas-fired generation.’

They said, ‘Only if the world abandons attempts to limit risks of dangerous climate change would a strategy of investment in gas-fired generation through the 2020s offer significant savings.

‘This conclusion is robust when possible impacts of shale gas on the gas price are accounted for. Shale gas could play a role in the gas mix that helps to balance intermittent power generation, and meet demand for heat, provided appropriate environmental safeguarding regulations are put in place.’

The UK government has taken steps to regulate shale exploration, the details of which can be read here. The chancellor’s last budget also included a tax break for the early stage development of shale gas operations.

Extracting shale gas remains contentious and tremors felt in Blackpool in 2011 were attributed to drilling being conducted in the area by Cuadrilla, which said in its own report that an unusual combination of geology contributed to the event and that the chances of it happening again were unlikely.

Shale gas extraction - or fracking - uses a technique called hydraulic fracturing: a well is drilled through the upper strata into the shale bed and a mixture of water and solid particles is pumped down into the shale at high pressure to fracture rock and the solid particles hold the crack open.

This process, like other methods of unconventional gas extraction, can create significant volumes of flowback and produced water, which is the subject the of an event taking place tomorrow in Aberdeen.

The Unconventional Gas Water Management Conference will bring together regulators, operators, industry experts, services companies and academia to address the legislative and technological challenges brought about by unconventional gas.

Speakers will include the UK’s Environment Agency, Scottish Environmental Protection Agency, as well as operators Shell, Statoil and BG Group and featured topics include risk management; legislation and regulatory requirements; shale gas practices; flowback and produced water treatment technologies; and lessons learned from the USA.

Hosts NEL will also present the findings from a recently completed National Measurement Office study on water management of unconventional gas production.

In a joint event this week IET and IMechE welcome Alastair Dormer, chairman, Hitachi Rail Europe to discuss the Hitachi Super Express Train scheduled to operate on the Great Western Main Line and other inter-city routes in Britain.

The organisers say the talk will cover an introduction to Hitachi and to this project with an overview of the train’s design, manufacturer, operation, maintenance and servicing.

Last month Hitachi announced that it is to build its first European train factory following an agreement with Merchant Place Developments for the construction of a rolling stock manufacturing plant in Newton Aycliffe, County Durham.

The contract represents an investment of £82m to create an advanced manufacturing hub in the North East of England. Hitachi expects to create 730 long-term positions with around 200 positions created during the factory’s construction phase.

Construction of the plant is expected to start at the end of 2013, with the factory scheduled to go into production in 2016. The Super Express Trains will go into full passenger service in 2017.

More good news now with the latest Markit/CIPS UK Manufacturing PMI Data for May 2013 which has posted 51.3 for May compared to a revised 50.2 for April.

This renewed buoyancy has been attributed to growth of production and an acceleration in new orders, primarily in the domestic market but with exports contributing modestly also.

In a statement, David Noble, chief executive officer at the Chartered Institute of Purchasing & Supply said,

‘A strong improvement in domestic market conditions has boosted new business in the UK giving manufacturers the confidence to develop new products, clear backlogs of work and hire more staff. This is accompanied by higher demand in North America, East Asia and even parts of the Eurozone, which having been a drag on the sector for so long, now shows welcome signs of improvement.

‘To complete the good news, all three sectors of the market delivered solid growth, with consumer goods production leading the way once again.’

Finally, it really is your last chance to register for The Engineer Conference that takes place on Tuesday and Wednesday this week. Find out more here.