Highlights of the report on the climate impact of potential shale gas production in the EU

Highlights proposed by  GreenFacts of the report: Climate impact of potential shale gas production in the EU delivered to the  European Commission DG CLIMA by AEA, in collaboration with CE Delft and Milieu.

http://ec.europa.eu/clima/policies/eccp/docs/120815_final_report_en.pdf

1. Objectives of this report The objective of this study is to provide state-of-the-art information to the European Commission on the potential climate implications (via greenhouse gas (GHG) emissions) of possible future technically recoverable shale gas (gas reserves trapped within shale rock[1]) resources in Europe to produce electricity.  According to the report, these resources are of a similar scale to those technically recoverable in theU.S.

The study provides also an assessment of the adequacy of GHG emissions reporting frameworks to cover fugitive emissions of the production of shale gas and, if needed, propose measures for its improvement.

Drawing upon existing research this report provides an examination of the potential climate impacts of shale gas production in the EU. It begins with a review of existing estimates of GHG emissions from shale gas production and of the potential options for abating emissions from shale gas processes. This evidence is then used to estimate the potential emissions that might be associated with shale gas exploitation in the EU about 60-70 g CO2 /MJ, see graph in the report p 64) . The reports estimates also, through the use of appropriate models, each step of the lifecycle GHG emissions of electricity production from shale gas, taking into account the direct and indirect GHG gas emissions associated with gas extraction, transportation and use, including pre-production and production phases (excluding the exploration stage).

Due to the generally higher population densities in Europe, it is argued by some that shale gas developments might have a smaller overall land-footprint compared to US practices, or to conventional gas developments inEuropeas developers may be under more pressure to reduce the impact of well developments on the landscape, although this would require further analysis.

Finally the report provides an examination of the current EU GHG emissions reporting framework and explores the extent to which emissions from shale gas operations would be captured within the existing reporting requirements. Where there are identified gaps the report addresses the need for further reporting guidelines.

As highligheted by the authors of the report, the results provided can be used as inputs to discussions around the potential role of shale gas in the future energy supply mix, or any potential implications of the exploitation of indigenous shale gas resources on the development of renewable or other energy sources in Europe.

2. Evaluation of GHG emissions from E.U. shale gas production

 Drawing upon existing studies based on a narrow set of primary data from shale gas operations in the U.S, and their underlying data sources, a hypothetical analysis has been carried out of the potential lifecycle GHG emissions that may arise from shale gas exploitation within Europe. However, emissions from exploration have not been taken into account in any previous studies.

The majority of studies suggest that emissions from shale gas are lower than coal, but higher than conventional gas, based on other assumptions. Overall, the emissions from shale gas are dominated by the combustion stage (p 66).  However, emissions also arise from the pre-production, production, processing and transmission stages, but overall the significance of these stages is less. It is clear, according to the report (p 29) that the greatest next contribution to emissions comes from the well completion stage, whether this is assumed to happen only once at the beginning of the production cycle, or several times as the well is worked over. The second most significant source in this stage is drilling and hydraulic fracturing,

The comparison with conventional gas.  The authors have estimated the GHG emissions per unit of electricity generated from shale gas to be around 4% to 8% higher than for electricity generated by conventional pipeline gas from within Europe. However, a number of uncertainties remain including: 1.) the level of emissions associated with the well completion stage and  2.) the levels of water re-use and treatment of waste water. Overall, the emissions from shale gas are dominated by the combustion stage.

These additional emissions arise in the pre-combustion stage, predominantly in the well completion phase when the fracturing fluid is brought back to the surface together with released methane. Fugitive methane emissions from hydraulic fracturing and management of flow back waters are sources of GHG emissions that do not arise from conventional extraction. If emissions from well completion are mitigated, through flaring or capture and utilised, then this difference is reduced to 1% to 5%.

The analysis also suggests (but this conclusion is far from clear-cut) that the emissions from shale gas generation (base case) sources of gas outside of Europe which make a significant contribution to European gas supply are 2% to 10% lower than emissions from electricity generated from sources of conventional pipeline gas located outside of Europe (in Russia and Algeria), and 7% to 10% lower than that of electricity generated from LNG imported into Europe.

Under the  ‘worst’ case shale gas scenario used in the study, , emissions from electricity generated from shale gas would be similar to the upper emissions level for electricity generated from imported LNG and for gas imported from Russia and this suggests that in such cases  there may be no GHG emission benefits from utilising domestic shale gas resources over imports of conventional gas from outside the EU1. In fact, for some pipeline sources emissions from shale gas may exceed emissions from importing conventional gas.

The comparison with coal . This relative comparison, although still largely hypothetical, is clearer cut. Based on experiences drawn largely from the U.S, emissions from shale gas generation would be significantly lower (41% to 49%) than emissions from electricity generated from coal, a  finding consistent with most other studies into the GHG emissions arising from shale gas.

 3.  Best available technologies for reducing GHG emissions from shale gas production

The use of best practice techniques, one of the key assumptions which can influence the scale of emissions, has the potential to significantly reduce emissions relative to other practices. With respect in particular to emissions resulting from flow back from well completions, the application of Reduced Emissions Completions has the potential to reduce emissions by around 90%.

It seemed reasonable to the authors of this report to assume that a large proportion of the best practice techniques identified and that will be a regulatory requirement in the U.S. from 2015 will be applicable in Europe with some caveats related to:

-          Geology ; certain techniques requires sufficient gas pressure, which may not be the case at all locations inEurope;

-          Infrastructure: when the captured gas doesn’t meet the required natural gas specification and if the adequate processing infrastructure is not in place;

-          Availability and experience in equipment / technology

Further emissions reductions can be achieved at other stages in the gas life cycle. These measures are not specific to shale gas and are also applicable to conventional gas sources. These include measures such as: more efficient compressors; improved leak detection or utilisation of gas stemming from production testing.

4. Which E.U. legislation for controlling GHG emissions from shale gas production

The study underlined that there are very few requirements applicable specifically to GHG emissions from shale gas projects:

- The EIA Directive (85/337/EEC; 2011/92/EU (codified)) is the most relevant as it sets requirements as to the consideration of climate change effects and air emissions as part of a full EIA. However, despite the requirements of this Directive,  many uncertainties remain as to whether Member States would require an EIA for shale gas operations and if so how Member States should implement the EIA such as the methodology to be used to quantify GHG emission baseline scenarios.

-The EU ETS Directive (Directive 2003/87/EC) could provide precedents for the regulation of shale gas emissions, through its treatment of venting and flaring, and emissions related to carbon capture and storage processes.

- The Directive on Industrial Emissions (2010/75/EU) exists but is not clear in which circumstances it would apply to shale gas exploration and exploitation activities and whether its measures on air emissions would cover methane contained within flow back.

5. The report’s reccomendations

The first recommendation of the report (p 116), is that development of evidence based, reporting systems, estimation methodologies and emission factors should focus on the most significant and most uncertain new sources of GHG emissions from shale gas E&P sources, which are the fugitive methane emissions from well completions and well work-overs, including the management of hydraulic fracturing flow back fluids.

The report suggests thus regulatory constraints to be investigated that would encourage the application of best available techniques, among which[2] :

-          Consideration of the issues identified related to the scope of the EIA Directive with regard to shale gas
exploration and exploitation activities (Annex I or II);

-          Consideration of information requirements on measures taken by developers to limit GHG emissions under the
EIA Directive, or other pieces of relevant legislation;

-         Consideration of the need for measures to limit GHG emissions for shale gas exploration and exploitation;

-          Consideration of the issues identified related to the scope of the Industrial Emissions Directive with regard to shale
gas exploration and exploitation activities;

-           Consideration of the application of the emission limit values requirements under the Industrial Emissions
Directive to methane emissions from exploration and exploitation activities.

-          Consideration given to the application of emission limit values for methane emissions from exploration and
exploitation activities.

In principle, the legislation described above could provide a good approach with which to enforce best shale gas technologies, although this would likely need to be supplemented by BAT reference documents, guidance specific to shale gas technologies and clarification on the applicability of key directives.

Alternatives, such as voluntary agreements could also be considered, but additional measures would be required to ensure they are rigorously applied.

 5. Reporting the emissions data specific to shale gas production and the current E.U. GHG emissions
reporting framework

According to the report, no emission factors, GHG estimation methods, industry activity or emissions data specific to shale gas Exploration and Production (E&P) sources are included within the EU current GHG emissions reporting frameworks made under the auspices of the UNFCC and IPPC.

However, information and reporting protocols from regulators in Canada and the U.S.provide estimation methods and indicative emission factors for these sources that are specific to shale gas E&P which could be developed for application in the EU.

Several process stages in shale gas E&P, including processing and compressing the gas for distribution, require the same steps as with conventional gas. Therefore the current IPCC Guidelines and national GHG inventory methodologies should be adaptable to allow inventory agencies to derive complete and accurate estimates for these sources.

 Reference: Climate impact of potential shale gas production in the EU Final Report Report for European Commission DG CLIMA AEA/R/ED57412 Date 30/07/2012 Issue 2

http://ec.europa.eu/clima/policies/eccp/docs/120815_final_report_en.pdf

The report has been commissioned by DG Climate Action of the European Commission and delivered by AEA, in collaboration with CE Delft and Milieu. contact : Jonathan Perks, AEA Technology plc.Gemini Building, Harwell, Didcot, OX11 0QR   e-mail: jonathan.m.perks@aeat.co.uk


[1] ‘Gas shales’ (also known as shale beds) are formations of organic-rich shale, a sedimentary rock formed from deposits of mud, silt, clay, and organic matter. The low permeability of the rock means that substantial quantities of natural gas can be trapped within their pores, but the shales must be artificially stimulated (fractured) to enable its extraction. Techniques such as directional / horizontal drilling and hydraulic fracturing have been developed in order to facilitate the extraction of the gas from the shales.

[2] see table 27 of the report, pg 104

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