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Unconventional oil and gas: compatibility with Scottish greenhouse gas emissions targets

Published: 8 Nov 2016

Research into the compatibility of unconventional oil and gas with Scottish greenhouse gas emissions targets.

92 page PDF

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92 page PDF

1.8MB

Contents
Unconventional oil and gas: compatibility with Scottish greenhouse gas emissions targets
Footnotes

92 page PDF

1.8MB

Footnotes

1. CCC (2016) Onshore Petroleum: The compatibility of UK onshore petroleum with meeting the UK's carbon budgets.
Available at https://www.theccc.org.uk/publication/onshore-petroleum-the-compatibility-of-uk-onshore-petroleum-with-meeting-carbon-budgets/

2. Underground coal gasification is being covered in a separate study:
http://www.gov.scot/Topics/Business-Industry/Energy/onshoreoilandgas

3. Davies et al. (2012) Hydraulic fractures: How far can they go?, Marine and Petroleum Geology, 43, 519-521.

4. King (2012) Hydraulic Fracturing 101,
http://www.kgs.ku.edu/PRS/Fracturing/Frac_Paper_SPE_152596.pdf

5. BGS (2014) The Carboniferous shales of the Midland Valley of Scotland,
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/360471/BGS_DECC_MVS_201 4_MAIN_REPORT.pdf

6. IDDRI (2014) Unconventional Wisdom,
http://www.iddri.org/Publications/Collections/Analyses/Study0214_TS%20et%20al._shale%20gas.pdf

7. Gény (2010) Can Unconventional Gas be a Game Changer in European Gas Markets?,
https://www.oxfordenergy.org/wpcms/wp-content/uploads/2011/01/NG46-CanUnconventionalGasbeaGameChangerinEuropeanGasMarkets-FlorenceGeny-2010.pdf

8. Department of Industry and Science (2015) Australian Energy Update,
http://www.industry.gov.au/Office-of-the-Chief-Economist/Publications/Documents/aes/2015-australian-energy-statistics.pdf

9. BGS (2014) The Carboniferous shales of the Midland Valley of Scotland,
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/360471/BGS_DECC_MVS_201 4_MAIN_REPORT.pdf

10. KPMG have authored a separate study in parallel to this one, on economic impacts and scenario development.

11. EIA (2015), Technically Recoverable Shale Oil and Gas Resources: UK,
https://www.eia.gov/analysis/studies/worldshalegas/pdf/UK_2013.pdf

12. ICF (2014), Macroeconomic impacts of shale gas extraction in the EU,
http://bookshop.europa.eu/en/macroeconomic-impacts-of-shale-gas-extraction-in-the-eu-pbKH0214481/

13. MacKay-Stone (2013), Potential Greenhouse Gas Emissions Associated with Shale Gas Extraction and Use,
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/237330/MacKay_Stone_shale_ study_report_09092013.pdf

14. Global warming is expected to lead to a decrease in the effectiveness of natural CO 2 sinks, and hence an additional increase in atmospheric CO 2 concentration. This feedback was not fully accounted for in IPCC AR4 GWP estimates. IPCC AR5 provides GWP estimates without and with this effect, the latter being arguably the more consistent approach.

15. For example Howarth et al. (2011), Methane and the greenhouse gas footprint of natural gas from shale formations, Climatic Change,106, 679-690.

16. Ikonnikova et al. (2015) Profitability of shale gas drilling: A case study of the Fayetteville shale play, Energy, 81, 382-393.

17. Oilfield Technology (2013) Taking Centre Stage,
https://www.slb.com/~/media/Files/completions/industry_articles/201302_ot_taking_centre_stage_bakken_ia. pdf

18. MITei (2015), The Salient Distribution of Unconventional Oil and Gas Well Productivity,
http://energy.mit.edu/publication/the-salient-distribution-of-unconventional-oil-and-gas-well-productivity/

19. Gény (2010) Can Unconventional Gas be a Game Changer in European Gas Markets?,
https://www.oxfordenergy.org/wpcms/wp-content/uploads/2011/01/NG46-CanUnconventionalGasbeaGameChangerinEuropeanGasMarkets-FlorenceGeny-2010.pdf

20. http://www.ineos.com/news/ineos-group/ineos-plans-25-billion-shale-gas-giveaway

21. HM Treasury (2016) Shale Wealth Fund: consultation.
https://www.gov.uk/government/consultations/shale-wealth-fund

22. A well casing is a large diameter pipe inserted into a recently drilled borehole and held in place with cement.

23. HSE Shale gas and hydraulic fracturing,
http://www.hse.gov.uk/shale-gas/assets/docs/shale-gas.pdf

24. Gény (2010).

25. In 2014 prices.

26. IDDRI (2014) Unconventional Wisdom,
http://www.iddri.org/Publications/Collections/Analyses/Study0214_TS%20et%20al._shale%20gas.pdf

27. Browning et al (2013), Barnett study determines full-field reserves, production forecast, Oil & Gas Journal,
http://www.ogj.com/articles/print/volume-111/issue-9/drilling-production/barnett-study-determines-full-field-reserves.html

28. Oilfield Technology (2013) Taking Centre Stage,
https://www.slb.com/~/media/Files/completions/industry_articles/201302_ot_taking_centre_stage_bakken_ia. pdf

29. MITei (2015) The Salient Distribution of Unconventional Oil and Gas Well Productivity,
http://energy.mit.edu/publication/the-salient-distribution-of-unconventional-oil-and-gas-well-productivity/

30. The economic impact and scenario development report assumes that wells would produce shale gas, similar in composition to natural gas, with 75% of wells also co-producing a range of other products grouped under 'liquids'. KPMG did not break down 'liquids' within their scenarios into specific products, as they consider that the mix of products to be speculative until further exploration has taken place. Based on experience elsewhere, alongside methane production co-producing wells are likely to include a range of other hydrocarbons, both liquids and wet gas ( e.g. comprising ethane, propane, butane and gas condensate), some of which could be used as petrochemical feedstocks rather than combusted (see Chapter 4). For our analysis, the precise mix of products is relatively unimportant, with the key distinction being between methane and non-methane hydrocarbons, due to methane being a potent greenhouse gas (see Chapter 1).

31. It is likely that the volume of gas produced in co-producing wells will turn out to be smaller on average than those producing gas only. The composition of co-producing wells is also likely to have a smaller percentage of methane in the gas when compared to gas-only wells.

32. The IEA 450 scenario is broadly compatible with limiting average warming to 2C, and with the UK 2050 target for at least an 80% reduction in greenhouse gas emissions on 1990 levels. IEA (2015) World Energy Outlook
http://www.worldenergyoutlook.org/weo2015/

33. For example, Pöyry found an impact of gas prices of 2-4% impact on gas prices in Pöyry (2012) How will Lancashire shale gas impact the GB energy market?
http://www.poyry.com/news/articles/how-will-lancashire-shale-gas-impact-gb-energy-market

34. These include studies by Allen et al. (2013), Zavala-Araiza et al. (2015), Pétron et al. (2014), Marchese et al. (2015), Karion et al. (2013), and Peischl et al. (2015).

35. JISEA (2015), Estimating US Methane Emissions from the Natural Gas Supply Chain,
http://www.nrel.gov/docs/fy16osti/62820.pdf

36. Peischl et al. (2015), Quantifying atmospheric methane emissions from the Haynesville, Fayetteville, and northeastern Marcellus shale gas production regions, J. Geophys. Res. Atmos., 120, 2119-2139.

37. Karion et al. (2013), Methane emissions estimate from airborne measurements over a western United States natural gas field. Geophys. Res. Lets, 40, 4393-4397.

38. Peischl et al. (2015), Quantifying atmospheric methane emissions from the Haynesville, Fayetteville, and northeastern Marcellus shale gas production regions, J. Geophys. Res. Atmos., 120, 2119-2139.

39. Turner et al. (2016), A large increase in U.S. methane emissions over the past decade inferred from satellite data and surface observations, Geophysical Research Letters, 43.

40. Hausmann et al. (2016), Contribution of oil and natural gas production to renewed increase in atmospheric methane (2007-2014): top-down estimate from ethane and methane column observations, Atmos. Chem. Phys., 16, 3227-3244

41. Brandt et al. (2014), Methane Leaks from North American Natural Gas Systems, Science, 343, 733-735

42. Zavala-Araiza et al. (2015), Reconciling divergent estimates of oil and gas methane emissions, PNAS, 112(51), 15597-15602.

43. JISEA (2015), Estimating US Methane Emissions from the Natural Gas Supply Chain,
http://www.nrel.gov/docs/fy16osti/62820.pdf

44. MacKay-Stone (2013), Potential Greenhouse Gas Emissions Associated with Shale Gas Extraction and Use,
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/237330/MacKay_Stone_shale_study_report_09092013.pdf

45. SGI (2015), Methane and CO 2 emissions from the natural gas supply chain,
http://www.sustainablegasinstitute.org/publications/white-paper-1/

46. Bond et al. (2014), Life-cycle Assessment of Greenhouse Gas Emissions from Unconventional Gas in Scotland,
http://www.climatexchange.org.uk/files/2514/1803/8235/Life-cycle_Assessment_of_Greenhouse_Gas_Emissions_from_Unconventional_Gas_in_Scotland_Full_Report_Updated_8.Dec.14.pdf

47. It is assumed that no additional refining capacity is required.

48. The frequency of one workover every 30 years reflects a situation in which some wells do not have workovers, while others have them within the well's economic life, which might be up to 20 years.

49. SGI (2015), Methane and CO 2 emissions from the natural gas supply chain,
http://www.sustainablegasinstitute.org/publications/white-paper-1/

50. SGI (2015).

51. Blowdown is the venting of gas remaining in a compressor when that compressor is shut down.

52. SGI (2015).

53. Zavala-Araiza et al. (2015), Reconciling divergent estimates of oil and gas methane emissions, PNAS, 112(51), 15597-15602.

54. SGI (2015).

55. Zavala-Araiza et al. (2015), Toward a Functional Definition of Methane Super-Emitters: Application to Natural Gas Production Sites, Environ. Sci. Technol., 49, 8167-8174.

56. Boothroyd et al. (2016) Fugitive emissions of methane from abandoned, decommissioned oil and gas wells, Science and The Total Environment, 547, 461-469.

57. Howarth et al. (2011), Methane and the greenhouse gas footprint of natural gas from shale formations, Climatic Change, 106, 679-690.

58. SGI (2015).

59. US EPA, Recommended Technologies to Reduce Methane Emissions,
https://www.epa.gov/natural-gas-star-program/recommended-technologies-reduce-methane-emissions

60. US EPA (2016), Best Management Practice ( BMP) Commitment Framework,
https://www.epa.gov/sites/production/files/2016-05/documents/methanechallenge_bmp_framework.pdf

61. The UK Government carbon values are broadly consistent with limiting average warming to 2ºC and reducing emissions by at least 80%, and reach £78/tCO 2e in 2030. DECC (2009) Carbon Valuation in UK Policy Appraisal: A Revised Approach.
Available at https://www.gov.uk/government/publications/carbon-valuation-in-uk-policy-appraisal-a-revised-approach

62. SGI (2015), Methane and CO 2 emissions from the natural gas supply chain,
http://www.sustainablegasinstitute.org/publications/white-paper-1/

63. US EPA (2011), Reduced Emissions Completions for Hydraulically Fractured Natural Gas Wells,
https://www.epa.gov/sites/production/files/2016-06/documents/reduced_emissions_completions.pdf

64. ICF (2015), Economic Analysis of Methane Emission Reduction Opportunities in the Canadian Oil and Natural Gas Industries,
https://www.pembina.org/reports/edf-icf-methane-opportunities.pdf

65. ICF (2015).

66. US EPA (2011), Install Electric Compressors,
https://www.epa.gov/sites/production/files/2016-06/documents/installelectriccompressors.pdf

67. US EPA, EPA Proposes New Commonsense Measures to Cut Methane Emissions from the Oil and Gas Sector/Proposal Cuts GHG Emissions, Reduces Smog-Forming Air Pollution and Provides Certainty for Industry,
https://www.epa.gov/newsreleases/epa-proposes-new-commonsense-measures-cut-methane-emissions-oil-and-gas-sectorproposal

68. CCC (2016), The compatibility of UK onshore petroleum with meeting the UK's carbon budgets,
https://www.theccc.org.uk/publication/onshore-petroleum-the-compatibility-of-uk-onshore-petroleum-with-meeting-carbon-budgets/

69. These Government values are broadly consistent with limiting average warming to 2ºC,
Available at https://www.gov.uk/government/publications/carbon-valuation-in-uk-policy-appraisal-a-revised-approach

70. For co-producing wells, the oil-to-gas ratio will vary and in some cases the volume of gas may be insufficient to justify its productive use ( e.g. piping to a processing facility and then injection into the gas grid) on an economic basis.

71. Scottish Government (2015) Moratorium called on fracking.
http://news.scotland.gov.uk/News/Moratorium-called-on-fracking-1555.aspx

72. Scottish Government (2014) Independent Expert Scientific Panel - Report on Unconventional Oil And Gas.
http://www.gov.scot/Resource/0045/00456579.pdf

73. CCC (2016) Scottish emissions targets 2028-2032 - The high ambition pathway towards a low-carbon economy.
Available at https://www.theccc.org.uk/publication/scottish-emissions-targets-2028-2032-the-high-ambition-pathway-towards-a-low-carbon-economy/

74. Scottish Government (2016) Letter from Roseanna Cunningham to Matthew Bell
http://www.gov.scot/Resource/0050/00502164.pdf

75. CCC (2016) CCC response to request for updated advice on Scottish emissions targets.
Available at: https://www.theccc.org.uk/publication/ccc-response-to-request-for-updated-advice-on-scottish-emissions-targets/

76. Jacobs (2012), EU Pathway Study: Life Cycle Assessment of Crude Oils in a European Context

77. Due to the limited spatial resolution of the model, which divides the world into 15 regions, Scotland is contained within the TIAM-Grantham model's 'Western Europe' region.

78. Few, Gambhir et al. (2016), The impact of shale gas on the cost and feasibility of meeting climate targets - a global energy system model analysis and an exploration of uncertainties - AVOID 2 report WPC6.
Available at http://www.avoid.uk.net/2016/10/the-impact-of-shale-gas-on-the-cost-and-feasibility-of-meeting-climate-targets-c6/

79. The TIAM-Grantham model does not seek to represent all greenhouse gas emissions directly, but instead allows for non-CO 2 emissions based on other modelling (including using IIASA's GAINS model), leaving a cumulative CO 2 budget across the 21st century of 1,340 GtCO 2 in the 2ºC run and 940 Gt in the 1.75ºC run.

80. The outputs of a model run include shadow prices associated with the emissions constraints imposed, reflecting the marginal costs in meeting the emissions constraint. Imposing these shadow prices in a second model run instead of emissions constraints would lead to an identical set of results within the model. However, doing so allows further changes made to the model set-up ( e.g. forcing in shale gas) to be reflected in the model outputs as a change to emissions. Conversely, under emissions constraints, by definition the emissions will not change but the costs of meeting the constraints would do.


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