Mark Miller was looking to lead an energy revolution in the
U.K. Then, earthquakes intervened.
Mr. Miller, an oil-industry veteran from Pennsylvania, is one of a small band
of pioneers who are seeking to replicate North America's shale-gas boom in
Europe. His company, Cuadrilla Resources, has imported a technology used to
great effect in the U.S. to try to turn Blackpool, a seaside resort on the west
coast of England, into a new Klondike for gas.
The technique, called hydraulic fracturing, or "fracking," is
controversial. The process involves injecting huge volumes of water, sand and
chemicals deep into porous rock, creating fissures--or fractures--that allow
the gas trapped inside the rock to flow out. Critics worry that fracking can
contaminate ground water and even cause gas to leak from nearby household taps.
(This story and related background material will be available on The Wall
Street Journal website, WSJ.com.)
Mr. Miller, a 57-year-old petroleum engineer, thought he had managed to
persuade locals that fracking was safe. Then, this spring, the area around
Blackpool was shaken by two tremors. After the second one, Cuadrilla suspended
its fracking operations, pending an investigation.
If there were any connection between the quakes and Cuadrilla's activities, it
"would be the first time in history that an earthquake was caused by oil
or gas fracking," Mr. Miller says.
The quakes left Blackpool-area residents "angry and distressed," says
Philip Mitchell, chairman of the local Green Party. "They've told me they
feel like guinea pigs."
Others were more sanguine. "If they find gas then I don't think there's
anything wrong with what they're doing," says one elderly man who lives in
the small village of Singleton, a stone's throw from the Cuadrilla worksite. "I
worked for years in the nuclear industry, so I'm not bothered by these
things."
Cuadrilla's tribulations show the challenges of developing shale-gas deposits
in Europe, despite the continent's worries about the sharp decline in its
conventional gas reserves and rising dependence on imports from countries such
as Russia
and Algeria. Among the problems: Europe is more densely populated than the
U.S., meaning a greater number of people would be likely to live near fracking
sites.
Mr. Miller compares the county of Lancashire, where Singleton is located, to
the Barnett, Marcellus and Haynesville shales in the U.S., where vast new gas
reserves unlocked by fracking have transformed energy markets.
Europe, too, is thought to have huge potential. One London-based think tank
recently estimated that there were enough recoverable reserves of
unconventional gas in Europe to meet its gas demand "for at least another
60 years."
That potential has attracted some of the world's biggest energy companies. Exxon
Mobil Corp. (XOM) has been drilling for shale gas in northern Germany. ConocoPhillips
(COP) has teamed up with a small U.K. company, 3Legs Resources PLC (3LEG.LN),
to explore in Poland's Baltic Basin.
But there are obstacles. Environmentalists in several countries, including the
U.K., are pushing to restrict fracking. Though the U.K. government this week
rejected calls for tough new controls on the practice, France last month became
the first country to ban it completely.
Last year, Cuadrilla made the U.K.'s first shale-gas discovery near Blackpool.
The company said from the start that its procedures were entirely safe. To
prevent leaks into the local aquifer, it is drilling 1,000 feet below the
water table, underneath cap rock that has held back the gas for millions of
years. "It would defy physics" for any of that gas to seep into
ground water, says Mr. Miller.
But in the end, the biggest threat to Cuadrilla's operations came from an
unexpected source: the two small earthquakes that shook Lancashire on April 1
and May 27.
In Singleton, people had been generally supportive of fracking, but some
changed their minds after the tremors. "They should have investigated how
it could affect the earth before they went ahead," says one local woman.
Cuadrilla assembled a team of independent experts to determine whether there
was any link between fracking and the seismic activity, which it stressed had
caused no damage and no physical injury. Meanwhile, Mr. Miller began a series
of public meetings to try to calm local jitters. The Cuadrilla CEO says he
didn't expect to be quite so much in the public eye. "I thought it would
all be about well design and raising finance," he says.