HSE's role in regulating onshore shale gas and hydraulic fracturing
Who regulates shale gas activity?
Operators can only drill petroleum wells if they hold a licence from the Department for Energy and Climate Change (DECC). DECC issues a licence in licence rounds which grant exclusivity to operators in the licence area. Operators also have to negotiate access with landowners for the drilling pad area.
Planning permission must be sought from the local authority, and operators must obtain appropriate environmental authorisation or permits from the Environment Agency (EA) in England, Natural Resources Wales in Wales, or the Scottish Environment Protection Agency (SEPA) in Scotland. These bodies regulate and monitor the environmental impacts of shale gas operations.
Operators must notify HSE, at least 21 days before drilling is planned, of the well design and operation plans to ensure that major accident hazard risks to people from well and well related activities are properly controlled.
If hydraulic fracturing (or 'fracking') is intended, DECC will require that a fracturing plan to address the risk of induced seismicity is submitted, and will review this plan before these operations are permitted. Finally, DECC will check that neither the Environmental regulator nor HSE have any objections to the proposed operations, before consent is given.
The Office of Unconventional Gas and Oil (OUGO), which sits within DECC, has been set up to co-ordinate the activity of the regulatory bodies and Departments.
Commitment to 'joined up' working
HSE is committed to joined up working and has long established arrangements to ensure joint working with DECC, EA, (or SEPA in Scotland), OUGO, and the relevant planning authorities. This is supported by a Memorandum of Understanding with EA.
HSE works closely with these bodies to share relevant information and to ensure that there are no material gaps between the safety, environmental protection and planning authorisation considerations, and that all material concerns are addressed.
What is HSE's role?
HSE has no role in setting energy policy and deciding what is the right mix of energy sources. Instead, HSE's role is to ensure that operators of shale gas activities are adequately controlling risks to the health and safety of people, whether workers, contractors or members of the public.
For shale gas operations, HSE focuses on ensuring wells are designed, constructed, operated, maintained, and ultimately abandoned to ensure that the flow of fluids in the well, whether fracking fluids or produced gas or water is controlled and stays within the well. This is called 'well integrity' and is equally important for safety and environmental protection.
What are the health and safety risks?
The main hazard is uncontrolled release of hydrocarbon gas due to a failure of the well structure which may then reach a source of ignition leading to a fire or explosion. A well designed and constructed well will reduce the risks of a release of fluids to as low as is reasonably practicable. The actual level of risk varies, depending on how quickly and easily any release can be controlled, and on geological conditions. Where there is a loss of well integrity, there is also the possibility of fracking fluids or produced water being released to the surrounding rock strata or at surface, which may have environmental consequences depending on the location of water aquifers.
The health and safety regulatory regime
HSE's regulatory regime is long established. It sets a general goal to be achieved and supplements this with more specific regulations that are particular to extraction of gas and oil through wells, which includes shale gas operations. The general goal is set by the Health and Safety at Work Act 1974 (HSWA) which requires risks to workers and the public to be reduced so far as is reasonable practicable.
The specific regulations are:
- the Borehole Sites and Operations Regulations 1995, known as BSOR. These regulations require notifications to be made to HSE about the design, construction and operation of such wells and a health and safety plan which sets out how risks are managed on site
- the Offshore Installations and Wells (Design and Construction etc) Regulations 1996, known as DCR. These regulations, include specific requirements for all wells, whether onshore or offshore, and include well integrity provisions which apply throughout the life of shale gas wells. They also require a well operator to provide HSE with regular reports of any activities on the well and to appoint an independent well examiner to undertake regular assessments of well integrity.
This combination of duties ensures that HSE is provided with information at key stages in the life cycle of a well and allows us to assess whether risks are being adequately controlled and, if not, to intervene.
How does HSE conduct its interventions?
HSE's intervention approach has two elements. The first has been to contribute to the development of best practice standards for the industry as a whole with the United Kingdom Onshore Operators Group which were published in February 2013. Such guidance, and existing industry codes dealing with well design and operations, sets clear expectation between HSE and operators as to how the general goal of reducing risks so far is reasonably practicable can be met.
The second element is to focus HSE interventions with particular sites and operators on the key risk control measure of ensuring well integrity. For this, HSE uses its team of expert wells engineers who cover all types of hydrocarbon wells both on and offshore. As an oil or gas well is a complex engineered construction, most of which is not accessible to visual inspection, HSE takes a life cycle approach to well integrity.
This life cycle consists of:
Well notifications submitted to HSE
This allows HSE to assess the well design before construction starts. This is a key phase of work where the vast majority of issues likely to have an impact on well integrity, will be identified and addressed by the well operator. It includes ensuring that safety features are incorporated into the design.
Weekly operations reports submitted to HSE
This provides HSE with the assurance that the operator is constructing and operating the well as described in the notification and when they are not, HSE can take the appropriate action.
Meetings with well operators, prior to and during the operational phase
This includes site inspections to assess well integrity during the operational phase and for new, and first time shale gas operators HSE and EA will meet and advise them of their duties and conduct a joint inspection of their key operations.
The independent well examiner
This approach is supplemented by the requirement for an independent well examiner to assess design, construction and maintenance. The well examiner is an independent competent person separate from the immediate line management of the well operations he is examining. The well examiner can be an employee of the operating company or a contractor (the latter is usually the case for UK onshore wells). The examiner's task is to review the proposed and actual well operations to confirm they meet the operator's policies and procedures, comply with DCR and follow good industry practice. This may include periodic site visits, at the well examiner's discretion.
During assessment and inspection activities, HSE checks that the operator has these arrangements in place. The well examination scheme and involvement of the well examiner is for the complete lifecycle of the well from design through to final plugging and decommissioning.
HSE has sufficient wells expertise to cope with the current exploratory phase of shale gas but would need to reassess the situation if it moved into large scale production.