Social License to Operate: Hydraulic Fracturing-Related Challenges Facing the Oil & Gas Industry

The crossroads of urban development and improved technology allowing oil and gas development in new areas can result in contentious community issues. The debate over one of the improved technologies – i.e., hydraulic fracturing – can be highly emotional. Consequently, industry must address community issues, earning trust and therefore a “social license to operate.” This paper provides fundamental knowledge of the social license to operate concept, validates its application to the oil and gas industry, particularly with respect to shale gas development, discusses the current status of social license in the unconventional development sphere, analyzes current ongoing efforts for shale gas developers to monitor and establish a social license, and identifies potential new methods of encouraging, establishing, and monitoring a social license to operate. The paper also proposes a new institutional framework in which to promote the social license to operate, “The Center for Social License to Operate in the Oil & Gas Industry.”

Structural evolution of the Lesser Himalayan fold-thrust belt of west central Nepal

The Lesser Himalayan fold-thrust belt on the south flank of the Jajarkot klippe in west central Nepal was mapped in detail between the Main Central thrust in the north and the Main Boundary thrust in the south. South of the Jajarkot klippe, the fold-thrust belt involves sandstone, shale and carbonate rocks that are unmetamorphosed in the foreland and increase in metamorphic grade with higher structural position to sub-greenschist facies towards the hinterland. The exposed stratigraphy is correlative with the Proterozoic Ranimata, Sangram, Galyang, Syangia Formations and Lakharpata Group of Western Nepal and overlain by the Paleozoic Tansen and Kali Gandaki Groups. Based on field mapping and cross-section construction, three distinct thrust sheets were identified separated by top-to-the-south thrust faults. From the foreland (south) to the hinterland (north), the first thrust sheet in the immediate hanging wall of the Main Boundary thrust defines an open syncline. The second thrust sheet contains a very broad synformal duplex, which is structurally stacked against the third thrust sheet containing a homoclinal panel of the oldest exposed Proterozoic stratigraphy. Outcrop scale folds throughout the study area are predominantly south vergent, open, and asymmetric reflecting the larger regional scale folding style, which corroborate the top-to-the-south deformation style seen in the faults of the region. Field techniques were complemented with microstructural and quartz crystallographic c-axis preferred orientation analyses using a petrographic microscope and a fabric analyzer, respectively. Microstructural analysis identified abundant strain-induced recrystallization textures and occasional occurrences of top-to-the-south shear-sense indicators primarily in the hinterland rocks in the immediate footwall of the Main Central Thrust. Top-to-the-south shearing is also supported by quartz crystallographic c-axis preferred orientations. Quartz recrystallization textures indicate an increase in deformation temperature towards the Main Central thrust. A line balance estimate indicates that approximately 15 km of crustal shortening was accommodated by folding and faulting in the fold-thrust belt south of the Jajarkot klippe. Additionally, estimations of shortening velocity suggest that the shortening velocity operating in this section of the fold-thrust belt between 23 to 14 Ma was slower than what is currently observed as a result of the ongoing deformation of the Sub-Himalayan fold-thrust belt.

The 2030 framework on climate and energy - Getting Europe on the right track? EPC Commentary, 30 January 2014

Climate vs competitiveness? The European Commission published its proposal on the 2030 climate and energy framework on 22 January. Reflective of the current economic climate, it was accompanied by a report on energy prices and the Commission decided not to propose regulation on shale gas but to issue recommendations on environmental standards. The same day also saw the publication of a communication “For a European Industrial Renaissance”. Climate considerations no longer drive the agenda. The enthusiasm of 2007, when the “20/20/20” climate and energy targets were set for 2020, has diminished. The new reality has brought competitiveness to the top of the EU’s priority agenda.

Kyiv's gas strategy: closer cooperation with Gazprom or a genuine diversification. OSW Commentary No. 110, 2013-07-16

In recent months Kyiv has been intensifying its efforts to diversify Ukraine’s gas supply routes with a view to reducing the country’s dependence on imports from Russia. One of the steps which Kyiv has taken has been to make the unprecedented decision to start importing gas from its Western neighbours. In November 2012, Ukraine’s state-owned Naftogaz began importing gas through Poland under a two-month contract with RWE (the imports continued into 2013 under a separate deal), while in the spring of 2013 Ukraine started importing gas from Hungary. Kyiv is also currently looking into the possibility of purchasing gas from Slovakia. Furthermore, since 2010 the Ukrainian government has been working on the construction of an LNG terminal near Odesa. The authorities have declared that this will allow Ukraine to import up to 5 billion m3 of LNG a year by 2015. The government has also taken measures to increase domestic production, including from non-traditional sources, and it plans to replace gas-based with coal-based technologies in local power stations. Finally, in January 2013, the government signed a 50-year production sharing agreement with Shell. This paves the way for the development of Ukraine’s shale gas deposits.

First steps towards into the unknown. The possibilities prospects of unconventional gas extraction in Ukraine. OSW Commentary No. 106, 2013-04-24

Ukraine’s deposits of unconventional gas (shale gas, tight gas trapped in non-porous sandstone formations, and coal bed methane) may form a significant part of Europe’s gas reserves. Initial exploration and test drilling will be carried out in two major deposits: Yuzivska (Kharkiv and Donetsk Oblasts) and Oleska (Lviv and Ivano-Frankivsk Oblasts), to confirm the volume of the reserves. Shell and Chevron, respectively, won the tenders for the development of these fields in mid 2012. Gas extraction on an industrial scale is expected to commence in late 2018/ early 2019 at the earliest. According to estimates presented in the draft Energy Strategy of Ukraine 2030, annual gas production levels may range between 30 billion m3 and 47 billion m3 towards the end of the next decade. According to optimistic forecasts from IHS CERA, total gas production (from both conventional and unconventional reserves) could reach as much as 73 billion m3. However, this will require multi-billion dollar investments, a significant improvement in the investment climate, and political stability. It is clear at the present initial stage of the unconventional gas extraction project that the private interests of the Ukrainian government elite have played a positive role in initiating unconventional gas extraction projects. Ukraine has had to wait nearly four decades for this opportunity to regain its status of a major gas producer. Gas from unconventional sources may lead not only to Ukraine becoming self-sufficient in terms of energy supplies, but may also result in it beginning to export gas. Furthermore, shale gas deposits in Poland and Ukraine, including on the Black Sea shelf (both traditional natural gas and gas hydrates) form a specific ‘European methane belt’, which could bring about a cardinal change in the geopolitics and geo-economics of Eastern and Central Europe over the next thirty years.

Energising the TTIP: Political economy of the trade policy rationale. Paper No. 9 in the CEPS-CTR project “TTIP in the Balance’’and CEPS Special Report No. 113/July 2015

Despite accounting for a significant share of global trade and the resulting interdependencies from it, energy governance remains largely fragmented and there is no global framework or agreement defining the rules of energy trade. This paper, after presenting the main global and regional energy market developments, discusses the opportunities to ‘energise the TTIP’, i.e. to include a chapter dedicated to trade and cooperation in the sphere of energy. The shale revolution in the US, the ever-rising interconnectedness of energy markets (recently proven by the disappearance of the ‘Asian gas premium’) and the EU’s quest to diversify its energy supplies generally sets favourable conditions to reinforce energy relations between the EU and the US. The question, as is often the case, is whether there is sufficient political will to tighten relations in a strategic sphere with connotations for national security and sovereignty.

(Table 2) Trace metal concentrations in ODP Hole 169-1033B

We measured the concentrations of redox-sensitive trace metals (Mn, V, Mo, U, Cd and Re) in sediments from ODP Leg 169S Hole 1033B in Saanich Inlet, British Columbia, to determine changes in redox conditions associated with the onset of laminated sediments at ~12.5 kyr. The most striking result is a large peak in authigenic Re along with detrital levels of Mo at the glacial terrigenous clay-diatomaceous sediment transition. In contrast, the underlying glacial terrigenous clay, which extends throughout the bottom section of the core, is chemically similar to detrital concentrations, either Cowichan River particulates or average shale values. These data suggest a period of oxic bottom waters but reducing pore-waters. This could be due to the dramatic transformation of Saanich Inlet during the late deglaciation from an open bay to an inlet, which restricted circulation and slowed bottom water oxygen renewal. A peak and gradual increase in authigenic Mn in younger sediments subsequent to the Re peak suggests that increasingly oxic conditions followed the authigenic enrichment in Re. These conditions could be connected to the Younger Dryas cooling period, which was coincident with an increase in well oxygenated upwelled waters on the west coast of North America that form the bottom waters of Saanich Inlet. Metal concentrations in a gray clay bed (~11 kyr) are similar to their concentrations in the glacial terrigenous clay, implying that they have a common source. Authigenic enrichments of Re with little authigenic Mo and Cd suggest that before the deposition of this bed, bottom waters were oxic and pore-water oxygen was consumed in the top centimeter or less. Laminations above the clay layer suggest anoxic conditions, which are also indicated by higher authigenic Mo and Cd and slightly lower Re/Mo ratios in these sediments. The basin remained mostly anoxic after the gray clay was emplaced, as seen by continuous authigenic enrichment of the redox-sensitive trace metals. These results are consistent with increased stratification of the water column, brought about by an influx of fresh water to the basin by a large flood.

Geochemistry of organic carbon at DSDP Sites 75-530 and 75-532

CHN analyses of sediments and rocks sampled during DSDP Leg 75 in the South Atlantic have provided concentrations of organic carbon and atomic C/N ratios of organic matter from two sites. High values of organic carbon were measured in sediments deposited during Neogene and Cretaceous times at Site 530 in the Angola Basin; sediments deposited at other times contain less than 0.5% organic carbon. Development of the Benguela Current and associated upwelling-supported biological productivity is recorded in late Miocene to Holocene sediments which contain 1 to 7% organic carbon. These sediments include debris flows and turbidites composed of predominantly biogenic materials originally deposited on the Walvis Ridge and on the African continental margin. Organic-carbon-rich black shales containing up to 17% organic carbon occur in late Albian to Coniacian turbidite sequences. These Cretaceous black shale layers are commonly several centimeters thick and are separated by bioturbated fine-grained organic-carbon-poor turbidites which are usually much thicker. At Site 532 on the Walvis Ridge, biogenic sediments deposited between late Miocene and Holocene times contain 1 to 9% organic carbon. Fluctuations in the intensity of high biological productivity associated with the Benguela Current are preserved in alternating light and dark layers of sediments. C/N ratios of organic matter in sediments from both sites are typical of marine sources

(Table 1) Organic geochemistry at DSDP Leg 71 Holes

Forty-three core samples from Sites 511 through 514 of DSDP Leg 71 were analyzed geochemically. The black shales at the bottom of Hole 511, in the basin province of the Falkland Plateau, contain an average of 1590 ppm extractable organic matter (EOM) and 120 ppm hydrocarbons. Whereas molecular type-carbon number distributions of mono- and polynuclear aromatic hydrocarbons and their sulphur and oxygen analogues in the black shale "aromatic hydrocarbon" fractions are very similar to those of many crude oils, other data - gas chromatography (GC) fingerprint, pyrolysis GC, visual kerogen analysis, H/C ratio - suggest the black shale section is thermally immature. Together, these observations imply that many of the hydrocarbons were deposited with the original sediments or are diagenetic products of other biological compounds. Pyrograms of the humic acid and kerogen fractions from the black shale interval are typical of geopolymers derived from marine algal material. It appears that these humic acids and kerogens are derived from the same lipid stock.

(Table T1) Total procaryotes, and living bacteria and archaea in black shales of ODP Leg 207 sites

Subseafloor sediments harbor over half of all prokaryotic cells on Earth (Whitman et al., 1998). This immense number is calculated from numerous microscopic acridine orange direct counts (AODCs) conducted on sediment cores drilled during the Ocean Drilling Program (ODP) (Parkes et al., 1994, doi:10.1038/371410a0, 2000, doi:10.1007/PL00010971). Because these counts cannot differentiate between living and inactive or even dead cells (Kepner and Pratt, 1994; Morita, 1997), the population size of living microorganisms has recently been enumerated for ODP Leg 201 sediment samples from the equatorial Pacific and the Peru margin using ribosomal ribonucleic acid targeting catalyzed reporter deposition-fluorescence in situ hybridization (CARD-FISH) (Schippers et al., 2005, doi:10.1038/nature03302). A large fraction of the subseafloor prokaryotes were alive, even in very old (16 Ma) and deep (>400 m) sediments. In this study, black shale samples from the Demerara Rise (Erbacher, Mosher, Malone, et al., 2004, doi:10.2973/odp.proc.ir.207.2004) were analyzed using AODC and CARD-FISH to find out if black shales also harbor microorganisms.

(Table 1) Major and trace elements analyses from FAMOUS-Project and DSDP Site 54-424

Hydrothermal deposits "sensu stricto" have been recovered during the FAMOUS cruise and Leg 54 of the Deep Sea Drilling Project near the Galapagos Spreading Centre. The studied sediments, mainly composed of clay material, have very poor REE concentrations, below about ten ppm. The shale-normalized patterns are characterized by a significant enrichment in heavy rare earths and show a negative Ce anomaly. The magnitude of this anomaly fluctuates but is generally lower than the seawater Ce anomaly. The geochemical characteristics of these hydrothermal deposits are in contrast with those of metalliferous sediments which are more enriched in trace elements, especially in REE.

Macerals in sediments

The study of particulate organic matter (OM) in Arctic Ocean sediments from the Late Cretaceous to the Eocene (IODP Expedition 302) has revealed detailed information about the aquatic/marine OM fluxes, biological sources, preservation and export of terrestrial material. Here, we present detailed data from maceral analysis, vitrinite reflectance measurements and organic geochemistry. During the Campanian/Paleocene, fluxes of land-derived OM are indicated by reworked and oxidized macerals (vitrinite, inertinite) and terrigenous liptinite (cutinite, sporinite). In the Early Eocene, drastic environmental changes are indicated by peaks in aquatic OM (up to 40-45%, lamalginite, telalginite, liptodetrinite, dinoflagellate cysts) and amorphous OM (up to 50% bituminite). These events of increased aquatic OM flux, similar to conditions favoring black shale deposition, correlate with the global d13C events "Paleocene/Eocene Thermal Maximum" (PETM) and "Elmo-event". Freshwater discharge and proximity of the source area are documented by freshwater algae material (Pediastrum, Botryococcus) and immature land-plant material (corphuminite, textinite). We consider that erosion of coal-bearing sediments during transgression time lead to humic acids release as a source for bituminite deposited in the Early Eocene black shales.

Rock eval analysis of organic matter in sediment core 159-959D

The Cretaceous Equatorial Atlantic Gateway between the Central and South Atlantic basins is of interest not only for paleoceanographic and paleoclimatic studies, but also because it provided particularly favourable conditions for the accumulation and preservation of organic-rich sediments. Deposition of carbonaceous sediments along the Côte d'Ivoire-Ghana Transform Margin (Ocean Drilling Program Leg 159) was intimately linked to the plate tectonic and paleoceanographic evolution of this gateway. Notably, the formation of a marginal basement ridge on the southeastern border of the transform margin provided an efficient shelter of the landward Deep Ivorian Basin against erosive and potentially oxidizing currents. Different subsidence histories across the transform margin were responsible for the development of distinct depositional settings on the crest and on both sides of the basement ridge. Whereas the southern, oceanward flank of the basement ridge was characterized by rapid, continuous deepening since last Albian-early Cenomanian, marine sedimentation on the northern, landward flank was interrupted by a period of uplift and erosion in the late Albian, and rapid subsidence started after the early Coniacian. Organic-rich sediments occur throughout almost the entire Cretaceous section, but hydrogen-rich marine black shales were exclusively recovered from core sections above an uplift-related unconformity. These black shales formed when separation of Africa and South America was sufficient to allow permanent oceanic midwater exchange after the late Albian. Four periods of black shale accumulation are recovered, some of them are correlated with the global oceanic anoxic events: in the last Albian-earliest Cenomanian, at the Cenomanian-Turronian boundary, during the middle Coniacian-early Campanian, and in the mid-Maastrichtian. These periods were characterized by increasing carbon flux to the seafloor, induced by enhanced palaeoproductivity and intensified supply of terrestrial organic matter. Black shale depostion appears to be intimately linked to periods of rising or maximum eustatic sea level and to the expansion of the oxygen minimum zone, as indicated by foraminiferal biofacies. Intervals between black shales units, in contrast, indicate a shrinking oxygen minimum zone and enhanced detrital flux rates, probably related to lowering sea level. Upper Cretaceous detritral limestones with high porosities may provide excellent hydrocarbon reservoirs, alsthough their areal extent appears to be limited. Palaeogene porcellanites, capped by Neogene pelagic marls and clays, extend over a wider area and max provide another target for hydrocarbon exploration.

Geochemistry and stable isotope record of black shales and inoceramids from the Demerara Rise

The bulk rock geochemistry and inoceramid isotopic composition from Cenomanian to Santonian, finely laminated, organic-rich black shales, recovered during Ocean Drilling Program Leg 207 on Demerara Rise (western tropical North Atlantic), suggest persistent anoxic (free H2S) conditions within the sediments and short-term variations within a narrow range of anoxic to episodically dysoxic bottom waters over a ~15 Ma time interval. In addition to being organic-rich, the 50-90 m thick sections examined exhibit substantial bulk rock enrichments of Si, P, Ba, Cu, Mo, Ni, and Zn relative to World Average Shale. These observations point to high organic burial fluxes, likely driven by high primary production rates, which led to the establishment of intensely sulfidic pore waters and possibly bottom waters, as well as to the enrichments of Cr, Mo, U, and V in the sediments. At the same time, the irregular presence of benthic inoceramids and foraminifera in this facies demonstrates that the benthic environment could not have been continuously anoxic. The d13C and d15N values of the inoceramid shell organics provide no evidence of chemosymbiosis and are consistent with pelagic rain as being a significant food source. Demerara Rise inoceramids also exhibit well-defined, regularly spaced growth lines that are tracked by d13C and d18O variations in shell carbonate that cannot be simply explained by diagenesis. Instead, productivity variations in surface waters may have paced the growth of the shells during brief oxygenation events suitable for benthic inoceramid settlement. These inferences imply tight benthopelagic coupling and more dynamic benthic conditions than generally portrayed during black shale deposition. By invoking different temporal scales for geochemical and paleontological data, this study resolves recent contradictory conclusions (e.g., sulfidic sedimentary conditions versus dysoxic to suboxic benthic waters) drawn from studies of either sediment geochemistry or fossil distributions alone on Demerara Rise. This variability may be relevant for discussions of black shales in general.

Cretaceous nannofossils of southeast France

The Aptian-lower Albian succession of the Vocontian Basin (SE France) consists of marine hemipelagic sediments including several black shale horizons. The latter are partly of regional and partly of global distribution. This sedimentary succession records the nannoplankton evolution of the Aptian-early Albian interval and thus provides an excellent opportunity to calibrate the calcareous nannofossil record with Tethyan ammonite and planktic foraminiferal biostratigraphy. The calcareous nannofossil biostratigraphy presented in this paper supports previous zonations, but it also provides a much higher resolution and thus improves the correlation of different black shale horizons on a supraregional scale. Up to 23 major (supraregionally significant) and minor (regionally significant) first and last occurrences of calcareous nannofossil taxa are recognized. Nannoconid abundances decrease rapidly in the upper Lower Aptian (nannoconid crisis I, NCI) and in the middle Upper Aptian (nannoconid crisis II, NCII). Both decreases correlate with carbonate-platform drowning events. The upper Lower Aptian interval above the NCI is characterized by high abundances of large specimens of Assipetra infracretacea and Rucinolithus terebrodentarius probably of supraregional significance. The uppermost Aptian-Lower Albian is characterized by high abundances of the calcareous nannoplankton taxon Repagulum parvidentatum, reflecting boreal influence on the Tethyan Realm. This suggests a temporary decrease in surface-water temperatures in the Vocontian Basin.