Unconventional oil and gas research published

Reports will inform upcoming public consultation.

A package of six research reports have been published today to inform the Scottish Government’s position on whether or not to allow any Unconventional Oil and Gas (UOG) development in Scotland.

The Scottish Government put in place a moratorium on UOG in January 2015 and, while it is in force, this prevents the development of any project involving hydraulic fracturing, also known as ‘fracking’, or any coal bed methane extraction technologies.

This package of research, which addresses evidential gaps identified by the Independent Expert Panel established by the Scottish Government to look at the issues around UOG. The research will now inform a public consultation which will launch in tandem with the consultation on the Scottish Government’s draft Energy Strategy and the, parallel, Climate Change Plan, being published in draft form in the early New Year.

The independent research published today covers the following issues in relation to UOG:

  • Public health impacts
  • Economic impacts
  • Climate change impacts
  • Understanding and monitoring induced seismic activity
  • Understanding and mitigating community level impacts from transportation Decommissioning, site restoration and aftercare.

The moratorium on UOG which, through the Scottish Government’s environmental licensing and planning powers, prevents hydraulic fracturing taking place in Scotland will remain in place throughout this process, and Ministers will use the research and the views gathered though the consultation to inform its decision on the use of UOG technologies in Scotland.    

Minister for Business, Innovation and Energy Paul Wheelhouse said: “The extensive package of research published today will ensure the public has access to a comprehensive evidence base on the potential health, economic and environment impacts of UOG ahead of the launch of the Scottish Government’s public consultation in the early New Year.

“These studies are an important contribution to the examination of the potential impacts of unconventional oil and gas technologies, including ‘fracking’ and coal bed methane extraction, and underline the Scottish Government’s precautionary, robust and evidence-based approach to UOG.

“In taking this approach we are mindful that those areas of Scotland across which it has been suggested industry wishes to deploy either ‘fracking’ or coal bed methane extraction are located across the Central Belt of Scotland: one of the most densely populated areas of the country. Those communities would be directly affected by any unconventional oil and gas development, and must be given genuine opportunities to explore and discuss the evidence in depth and at length.

“This is a debate that has attracted strong views and much controversy and, unlike the gung-ho approach of UK Ministers, the Scottish Government’s consultation will give everyone who has an interest in this issue an opportunity to express their view. This is what the public and stakeholders expect, this is what we promised in our manifesto, and this is what we are delivering.

“Once the consultation closes and the results have been independently analysed and published we will make our recommendation on the future of Unconventional Oil and Gas and allow Parliament to vote on it. After which, the Scottish Government will come to a considered judgment on the future of unconventional oil and gas in Scotland. “

Notes to News Editors:

The full speech is available to view at: http://news.gov.scot/speeches-and-briefings/publication-of-unconventional-oil-and-gas-in-scotland

The following independent experts completed the research projects.

  • A Public Health Impact Assessment, undertaken by Health Protection Scotland and drawing on the expertise of others including NHS Health Scotland and the Scottish Environment Protection Agency (SEPA).
  • Economic impacts and scenario development: Undertaken by KPMG
  • Climate change impacts: Undertaken by the Committee on Climate Change.
  • Understanding and monitoring induced seismic activity: Undertaken by the British Geological Survey.
  • Understanding and mitigating community level impacts from transportation: Undertaken by Ricardo.
  • Decommissioning, site restoration and aftercare – obligations and treatment of financial liabilities: Undertaken by AECOM.

An overview of the current regulatory framework for UOG and a summary of a workshop held with the main regulatory bodies can be found at: http://www.gov.scot/Topics/Business-Industry/Energy/onshoreoilandgas

Summary of research findings:

The following summaries have been prepared by the research contractors. The summary of the Health Impact Assessment was confirmed with Health Protection Scotland.

Economic impacts and scenario development: Undertaken by KPMG.

The aim of this project was to better understand the potential aggregate impact of unconventional oil and gas development on the Scottish economy under a range of scenarios and consider key sectors and groups that are likely to be affected by each scenario. Three potential production scenarios were developed by undertaking a study of the existing evidence base, including estimates of potential UOG resources, and through discussions with stakeholders and by making number of assumptions including that each scenario was developed on the basis that exploration is successful. In the mid-range scenario it is estimated that the development of 20 well pads of 15 wells each could produce a cumulative 947 billion cubic feet of gas and 17.8 million barrels of associated liquids over the lifecycle to 2062. This could lead to direct expenditure of £2.2 billion in Scotland over the period, which could give supply chain benefits and other induced economic benefits of an additional £1.2 billion over the period and be responsible for the creation of up to 1,400 jobs at its peak in the Scottish economy. While not quantified in the study, the report highlighted a number of other potential economic considerations, including the use of gas as feedstock in the petrochemical industry, the impact on local house prices, road use, agriculture, visual amenity, environmental costs and health costs.


Decommissioning, site restoration and aftercare – obligations and treatment of financial liabilities: Undertaken by AECOM. 

The aims of this project was to better understand the steps that can be taken to ensure decommissioning, site restoration and aftercare of any potential unconventional oil and gas development can be undertaken in a way that minimises impacts on communities and the environment, and identify different models of financial guarantee that provide robust security against liabilities. The research finds that international and UK experience shows that the risk of leakage from abandoned UOG wells is likely to be low provided best practice is implemented during well construction and abandonment operations under a strong regulatory regime. There is a residual risk that a small proportion of wells may fail, and leaks may occur from these wells under certain circumstances. However, with appropriate regulatory oversight and monitoring, it is considered that, with minor modification to licensing powers, Scotland’s regulatory framework is sufficiently robust to manage risks of well leakage consistent with the aim of providing suitable protection for communities and the environment. The research also finds that, taking lessons from opencast coal mining, there are financial guarantees available which can minimise the risk of operators failing to honour their commitment to decommissioning and the risk of the costs of repair of leaking orphaned wells falling on the public purse.


 Climate change impacts: Undertaken by the Committee on Climate Change.

The aim of this project was to examine the impacts of extraction of Scottish unconventional oil and gas (UOG) on greenhouse gas emissions and climate targets. The Climate Change Committee’s (CCC) overall assessment is that if exploitation of UOG is to be pursued, it requires that a strong regulatory framework is put in place. Exploiting UOG on a significant scale is only compatible with Scotland’s climate change targets if (a) Emissions are limited through tight regulation, (b) Scottish UOG production displaces imports, rather than increasing domestic consumption, and (c) Emissions from production of UOG are offset through reductions in emissions elsewhere in the Scottish economy. In terms of potential implications for global emissions, the report found that the overall emissions footprint of Scottish UOG, if tightly regulated, is likely to be broadly similar to that of imported gas and that initial evidence suggests that tightly regulated shale gas production is likely to have a broadly neutral impact on global emissions, with emissions savings due to switching from higher-carbon fossil fuels approximately offsetting emissions increases due to increased use of unabated gas.


 Understanding and mitigating community level impacts from transportation: Undertaken by Ricardo.

The aims of the transport project were to improve understanding of the increased traffic volumes and associated impacts which would result from unconventional oil and gas (UOG) development, and to identify means of mitigating these impacts. The research finds that the additional traffic movements associated with onshore oil and gas resources are unlikely to be significant or detectable at a regional or national scale, in view of the much greater numbers of traffic movements resulting from other activities. Consequently, the key focus for consideration of potential community impacts of UOG development is the assessment and management of potential impacts on communities local to development sites. Assuming the appropriate strategic policies are put in place, and appropriate mitigation is carried out, local communities would nevertheless experience an increase in traffic numbers, potentially for a number of years. However, provided the planning and Environmental Impact Assessment is properly implemented, any significant impacts would be avoided through the use of appropriate mitigation measures.


Understanding and monitoring induced seismic activity: Undertaken by the British Geological Survey.

The aims of this project were to better understand the levels of induced seismic activity that could be associated with unconventional oil and gas activities in Scotland and better understand the robust regulatory and non-regulatory actions that can be taken to mitigate any noticeable effects on communities. The research has found that Scotland is characterised by low levels of earthquake activity and the risk of damaging earthquake is low. On average there are eight earthquakes of magnitude 2 or above in Scotland every year, which is approximately the magnitude above which earthquakes might be felt by people. Hydraulic fracturing to recover hydrocarbons is generally accompanied by earthquakes with magnitudes of less than 2 that are too small to be felt. Evidence from the United States and Western Canada suggests that the probability of induced earthquakes that can be felt is small, although there are a number of examples of earthquakes that were large enough to be felt. Improved understanding of the hazard from induced earthquakes and the successful implementation of regulatory measures to mitigate the risk of induced seismicity are likely to require additional data from a number of sources, including improved monitoring capabilities.


 A Health Impact Assessment, undertaken by Health Protection Scotland and drawing on the expertise of others including NHS Health Scotland and the Scottish Environment Protection Agency (SEPA).

Health Protection Scotland (HPS) has undertaken a Health Impact Assessment of the potential health consequences of developing unconventional oil and gas. Health issues considered were identified by interested stakeholders, including communities, industry, and experts, as well as via previously published reports. The evidence was assessed via a systematic literature review of peer-reviewed scientific publications, and categorised as being sufficient, limited or inadequate. The report concludes that overall there is inadequate evidence available to draw conclusions on whether development of shale oil and gas or coal bed methane would pose a risk to public health. If unconventional oil and gas developments were to take place, HPS discuss a precautionary approach based on a range of mitigation measures involving operational best practice, regulatory frameworks and community engagement could be adopted.


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