Expert Scientific Panel on Unconventional Oil and Gas report

Executive Summary

1. In September 2013, the Scottish Government convened an Independent Expert Scientific Panel to report on the scientific evidence relating to unconventional oil and gas. The remit of the Panel was to deliver:

• A robust, well researched evidence base relating to unconventional oil and gas upon which the Scottish Government can reliably base future policy in this area;
• A well-developed narrative on the environmental and regulatory issues associated with the potential development of unconventional oil & gas in Scotland;
• An assessment of the potential resources available to Scotland.

2. The remit of the Expert Scientific Panel did not include making recommendations to the Scottish Government. The direction of future policy or potential changes to the regulatory framework is a decision for Scottish Ministers.

3. The following points summarise the key conclusions of the Expert Scientific Panel. These have been arrived at during the Panel's assessment and analysis of the available evidence.

Main Points

• The development of the unconventional oil & gas industry has changed the energy outlook of the United States of America. This has been made possible by technological advances in directional drilling and hydraulic fracturing. The impact of the US shale gas 'revolution' has raised interest in developing unconventional hydrocarbon resources in the rest of the world;
• There could be positive economic impacts from the development of an unconventional oil & gas industry, in terms of jobs created, taxes paid and gross value added. The scale of the impact in Scotland is subject to debate and may only become clear once development is underway. Lack of infrastructure, such as drilling rigs, could have an impact;
• Suitable petrochemical feed-stocks from the North Sea are declining, in particular ethane and other light hydrocarbons. The potential availability of these feed-stocks from unconventional oil and gas resources in Scotland could have a beneficial impact on Scotland's petro-chemical industry in the long term;
• Although further exploratory drilling will be required, Scotland's geology suggests that there could be significant reserves of unconventional oil and gas - the greatest potential reserves are likely to be in the Midland Valley of Scotland;
• When viewed in the context of the factors that have supported coal bed methane and shale gas development in other countries, it seems likely that unconventional gas could be developed in Scotland at scale. This is particularly true, given Scotland's domestic oil and gas supply-chain industry, and Scotland's longstanding experience in other extractive industries such as coal mining, shale oil, and conventional oil and gas;
• There are a number of technical challenges associated with unconventional hydrocarbon extraction, though it is the Expert Scientific Panel's view that none of these are insurmountable. The technology exists to allow the safe extraction of such reserves, subject to robust regulation being in place;
• The impact of unconventional oil and gas resources in Scotland on the Scottish Government's commitment to reduce greenhouse gases is not definitive. There could be minimal impact from unconventional hydrocarbons if they are used as a petrochemical feedstock, but lifecycle analysis of an unconventional hydrocarbon industry is required to inform the debate, and provide a clearer view on the impact of their development;
• The regulatory framework is largely in place to control the potential environmental impacts of the production of unconventional oil and gas in Scotland, although there may be gaps to address;
• The high population density of those parts of Scotland most likely to host significant unconventional oil and gas resources would be a challenge for any form of re-industrialisation, and will thus be so for any future unconventional oil and gas industry;
• The development of any new industry is likely to impact society - detecting and alleviating negative impacts, and enhancing positive impacts, is complicated unless careful planning of how to identify impacts is undertaken;
• Public concerns around unconventional oil and gas development include concerns about technical risk such as water contamination, public health and seismicity, but also wider issues such as social impacts on communities, effect on climate targets and trust in operators, regulators and policymakers;
• Many of these social (and environmental) impacts can be mitigated if they are carefully considered at the planning application stage. Added to which, there are already considerable legislative safeguards to ensure such impacts are not realised.
• Early consultation with communities is vital to identify potential impacts on the community, to scope potential benefits and develop plans to mitigate the impacts and enhance the benefits;
• Public engagement is necessary for the development of unconventional oil and gas resources in Scotland and there is a growing body of evidence showing that sustained and meaningful community engagement has beneficial outcomes for communities, operators and policymakers.