Unconventional oil and gas policy: SEA

8 Climatic factors

What are the environmental effects of the unconventional oil and gas development on climatic factors?

8.1 The environmental effects of unconventional oil and gas development on climatic factors are identified as:

• Direct greenhouse gas emissions associated with:
  • Direct release of produced gas to the atmosphere (from controlled venting during exploration, appraisal or production), or venting of fugitive emissions, i.e. leakage throughout the exploration, appraisal, production or decommissioning stages:
    • ‘Super-emitters’ have been identified as a key source of GHG emissions where a small number of installations have unchecked methane leaks for extended periods.
    • Sub-surface leakage from failure of decommissioned wells resulting in carbon dioxide and methane emissions.
  • The combustion of produced gas as part of controlled flaring or to power onsite machinery.
  • The combustion of other fuels to power onsite machinery or to transport equipment and materials to and from the site during exploration, appraisal and production.
• Indirect greenhouse gas emissions which arise as a consequence of exploration and production activities e.g. development on high carbon soils, emissions embedded in the sourcing of materials and fuels and waste treatment and disposal.
• The processing and use of unconventional oil and gas products^[188].

How do these effects relate to the current pressures and trends?

8.2 Scotland is making good progress towards a low carbon society. Recent data^[189] shows the following:

• The waste sector saw a 72.8% emissions reduction between 1990 and 2016.
• Scotland’s industrial sector saw emissions fall by 47.6% between 1990 and 2016.
• Energy efficiency in residential buildings has shown a 21.1% decrease in emissions from 1990 to 2016.
• Emissions in the agriculture sector have been reduced by 14.4% between 1990 and 2016.
• The size of the land use, land use change and forestry sector carbon sink has increased by 7.1 MtCO₂e between 1990 and 2016.

8.3 Unconventional oil and gas production is the development and use of a fossil fuel, which contributes to overall greenhouse gas emissions and climate change. The effects of climate change are inextricably linked to pressures on other SEA topic areas such as water, soils, air quality, landscape quality, as well as biodiversity and population and human health.

8.4 At a domestic level, the implications for greenhouse gas emissions from the development of unconventional oil and gas are subject to considerable uncertainties. This relates both to the size of any future industry and the emissions footprint of production. The Committee on Climate Change report^[190] identified that any significant scale domestic production of unconventional oil and gas would not be compatible with Scottish Climate Change targets unless:

• Emissions are tightly regulated and closely monitored in order to ensure rapid action to address leaks;
• Scottish UOG production displaces imported gas, rather than increasing domestic consumption; and
• Additional production emissions from shale wells is offset through reductions elsewhere in the Scottish economy.

8.5 Shale gas is currently imported into Scotland and the processing and use of this gas within Scotland is assumed to be included within current greenhouse gas emissions inventory. The Committee on Climate Change (2016) identified that the overall emissions footprint of Scottish shale gas, if tightly regulated, is likely to be broadly similar to that of imported gas. Tightly regulated domestic production may provide an emissions saving when displacing imports of liquefied natural gas, and would provide greater control over the level of emissions associated with supply^[191].

8.6 The Committee on Climate Change report also notes that there is little data surrounding the sources and quantities of greenhouse gas emissions associated with CBM extraction. At the present time, the evidence is insufficient to estimate the GHG emissions from developing CBM wells in Scotland.

8.7 In addition, the recent UK Greenhouse Gas Inventory^[192] states that any fugitive emissions from existing non-productive ‘spudded’^[193] sites are likely to fall below the reporting threshold of significance for UK reporting for sources that are ‘not estimated’.

What current regulatory processes control these effects?

8.8 All of the previously listed sources of greenhouse gas emissions contribute to climate change, and Scotland’s ability to meet statutory targets for reducing greenhouse gas emissions as set out in the Climate Change (Scotland) Act 2009. The Act sets statutory targets for the reduction of greenhouse gas emissions by setting an interim 42% reduction target by 2020 and an 80% reduction target from baseline levels (1990) for 2050. The Scottish Government has published a new Climate Change Bill with even more ambitious targets. Proposals include setting targets based on actual emissions, increasing the 2050 target to 90% emissions reduction, and making provisions for a net-zero greenhouse gas emissions target to be set when the evidence becomes available^[194].

8.9 The Climate Change Plan^[195] is the Scottish Government’s report on proposals and policies for meeting its climate change targets. Scotland’s actions are part of the international effort to reduce emissions and the effects of climate change.

8.10 The development of an unconventional oil and gas industry in Scotland would make achieving Scotland’s ambitious energy and climate change commitments even more challenging. The Scottish Government acknowledges the important role of gas in the transition to a low carbon energy future. However, the addition of an onshore unconventional oil and gas industry would not promote Scotland’s ability to meet the established greenhouse gas emissions targets and objectives in relation to protecting and enhancing the environment.

8.11 The Town and Country Planning (Environmental Impact Assessment) (Scotland) Regulations 2017^[196] relate to the assessment of the impact of certain public and private projects on the environment through the planning system.^[197] This would require consideration of greenhouse gas emissions where unconventional oil and gas developments are of a size and scale to require EIA.

8.12 Under the Pollution Prevention and Control (Scotland) Regulations 2012 (PPC)^[198], certain activities (or part of these activities) require a permit from SEPA. Permits will control both point and fugitive sources of emissions to air, for certain substances and require monitoring. SEPA also assess compliance by the site with these control. Under PPC, controls may also be placed upon any ‘directly associated activities’ to the prescribed activity which can have an effect on pollution. Any PPC permit would cover aspects such as vehicle movements but do not cover vehicle emissions from exhausts.

8.13 The Management of Extractive Waste (Scotland) Regulations 2010^[199] requires that extractive waste will be managed without using processes or methods which could adversely impact upon air quality and harm the wider environment.

What stages of unconventional oil and gas development result in these effects, what is the nature and significance of these effects?

Controlled and uncontrolled release of produced gas

Business as usual – shale oil and gas extraction

8.14 Greenhouse gas emissions resulting from the extraction of unconventional oil and gas are likely to be greatest during the production phase of unconventional oil and gas development, which for an individual development is likely to occur over a period of approximately 15 years^[200]. Under all three scenarios peak production is assumed to be reached in 2036-2037, and therefore the maximum contribution of unconventional oil and gas development to greenhouse gas emissions would be greatest at this time. These effects on greenhouse gas emissions will be permanent.

8.15 Fugitive air emissions and ‘super emitter’ leaks could occur during the exploration, appraisal and production stages of unconventional oil and gas development which together could take place over a period of approximately 20 years for an individual development. There is uncertainty over the characteristics which cause some unconventional oil and gas developments to be super emitters, and therefore on the extent to which this effect would occur in Scotland, or the quantity of greenhouse gases emitted. These effects on greenhouse gas emissions will be permanent.

8.16 Early studies^[201] have suggested that greenhouse gas (GHG) emissions associated with shale gas production could result in shale gas having a greater carbon footprint than coal, when used for electricity generation. These findings have been strongly criticised by other experts^[202]. Therefore, there is uncertainty as to the extent to which vented emissions differ, in terms of scale and carbon footprint.

8.17 Sub-surface leakage from decommissioned wells could occur at any point from the decommissioning stage of unconventional oil and gas development for an uncertain duration, however well leakage is most likely to happen within a few years of well abandonment and decommissioning. There is uncertainty around the level of specification for well decommissioning and aftercare if a company fails financial tests after consent to drill a well has been given. The occurrence of controlled and uncontrolled emissions is assumed to increase with the number of wells developed, and therefore the high KPMG scenario is identified as having a greater effect on national greenhouse gas emissions, although a potential significant negative but uncertain effect is identified for all three KPMG scenarios.

Business as usual - CBM

8.18 It is uncertain whether the occurrence of controlled and uncontrolled release of produced gas varies for the processes involved in shale oil and gas extraction and CBM. However, coal bed methane typically contains a higher proportion of methane than shale gas/oil^[203]. The scale of anticipated development of CBM involving a total of 30 wells is lower than that for shale oil and gas for the KPMG production scenarios, and a minor negative uncertain effect on national greenhouse gas emissions is identified.

Pilot project

8.19 The development of a pilot project will involve the development of a single pad and an unknown number of wells. The location of a pilot within a rural, semi-urban or urban fringe location is not anticipated to have any effect on the levels of controlled or uncontrolled emissions of greenhouse gases. Within the context of the development of a single pad, the overall impact on greenhouse gas emissions is identified as negligible.

Preferred policy position

8.20 The preferred policy position means that Scottish unconventional oil and gas development would not contribute to greenhouse gas emissions from controlled and uncontrolled release of produced gas. The effect is judged to be significant positive in relation to greenhouse gas emissions, reflecting the avoidance of any adverse effects on climate change from unconventional oil and gas development.

Combustion of gas or fossil fuels for on-site power and for transportation

Business as usual – shale oil and gas extraction

8.21 Emissions associated with on-site power use and transportation can occur during the exploration, appraisal and production stage which together occur over a period of approximately 20 years, although it is acknowledged that the greatest number of vehicle movements will occur during well pad construction and hydraulic fracturing. These effects are not anticipated to be significant at a regional or national scale in relation to greenhouse gas emissions for any of the three KPMG scenarios, and a negligible effect is identified.

Business as usual – CBM

8.22 Where hydraulic fracturing is not required for CBM extraction a lower level of vehicle movements are generated than for shale oil and gas extraction. The overall impacts from on-site power and transportation from the development of two pads for CBM extraction are judged to be negligible.

Pilot project

8.23 The development of a pilot project will involve the development of a single pad and an unknown number of wells. The development of a pilot will use gas or fossil fuels for on-site power and transportation. Based on the assumptions set out, locating a pilot within a rural, semi-urban or peri-urban location is not anticipated to have any impact on the level of effect. The overall level of effect is anticipated to be negligible for a single pilot in any location.

Preferred policy position

8.24 The preferred policy position means that Scottish unconventional oil and gas development would not contribute to greenhouse gas emissions from combustion of gas or fossil fuels for on-site power and transportation. This effect is judged to be negligible, reflecting the avoidance of negligible effects.

Greenhouse gas emissions associated with land use change

Business as usual – shale oil and gas extraction

8.25 The distribution of high carbon soils across the Midland Valley includes several areas of high carbon soil. Greenhouse gas emissions associated with land use change can occur during the exploration, appraisal and production stages (up to well completion). Carbon emissions from land use change could be significant should production occur in an area with deep peat soil, where estimated emissions of carbon dioxide are ten times higher than for grassland. The effect of carbon emissions from soil will occur in the early years of exploration, appraisal and production, and be permanent depending on the type of land-use changes and the sensitivity of the affected land. For instance, emissions could be significant and long-lasting if development occurs on carbon-rich soils such as peatlands^[204].

8.26 It has been found that overall greenhouse gas (GHG) emissions are small at the stages up to well completion. However, a lifecycle analysis for the Scottish Government suggests that land-use change emissions could be significant if development occurs on carbon-rich land. For grassland, land-use change emissions are estimated to be in the region of 920 tCO₂ per well or 1,800 tCO₂ for Tera Watt hours (TWh). Should production instead occur in an area with deep peat soil, estimated emissions are around 10 times higher, at around 10,000 tCO₂ per well or 20,000 tCO₂ per TWh. Land-use change emissions may also be significant for other types of land^[205].

8.27 The scale of all of the above effects is likely to be greatest under the KPMG high production scenario, which has the highest number of pads and greatest number of wells developed per pad. This larger number of developments increases the likely extent of impacts and the location on high carbon soils, with the greatest impact under the KPMG high production scenario. A potential uncertain significant negative effect on national emissions is identified, with lesser effects for the central and low KPMG scenarios. The level of uncertainty reflects the unknown location of development in relation to areas of high carbon soils.

Business as usual - CBM

8.28 The nature and timescale of impacts on greenhouse gas emissions arising from land use change for CBM development are similar to those described for shale oil and gas extraction. The scale of effect is limited to impacts arising from the development of two pads and a total of 30 wells. The significance of the effects of greenhouse gas emissions associated with land use change depends on the carbon content of the soil on which the CBM extraction takes place. However the location of the pads is unknown and the potential for these to be located on areas of high carbon soils remains and potential uncertain minor negative effects on national emissions are identified.

Pilot project

8.29 The development of a pilot project will involve the development of a single pad and an unknown number of wells. The location of a pilot is unknown, however it is assumed that a rural pilot could be located on an area of high carbon soil and the semi-urban and peri-urban pilots are assumed to be located on soils of moderate carbon content. Based on these assumptions, the overall scale of emissions from land use change from a rural pilot project on an area of high carbon and although contributing to national carbon emissions, is judged to be minor negative. The impacts on the semi-urban and urban fringe pilot locations are judged to be negligible.

Preferred policy position

8.30 The preferred policy position means that Scottish unconventional oil and gas development would not contribute to national greenhouse gas emissions from development on high carbon soils.

8.31 This is considered to be a significant positive effect.

Greenhouse gas emissions from processing and use of unconventional oil and gas products

Business as usual – shale oil and gas extraction

8.32 Greenhouse gas emissions resulting from the domestic processing and use of unconventional oil and gas are likely to be greatest during the production phase of development, which for an individual development is likely to occur over a period of approximately 15 years^[206]. Under all three scenarios peak production is assumed to be reached in 2036-2037, and therefore the maximum contribution of unconventional oil and gas development to greenhouse gas emissions is assumed to be greatest at this time. These effects on greenhouse gas emissions will be permanent.

8.33 For shale oil and gas extraction the lifetime production per pad under the central scenario is 47.3 billion cubic feet (bcf), with 1.2 million barrels of oil equivalent (MMBOE) associated liquids, for the high scenario is 94.7 bcf, with 2.4 MMBOE, and for the low scenario 31.6 bcf with 0.1 MMBOE. Although it is recognised that the scale of emissions is significantly higher for the high KPMG scenario, the effect of all three scenarios on national emissions is judged to be significant negative.

8.34 Reflecting the constraints associated with domestic unconventional oil and gas production and meeting Scotland’s climate change targets, there is considerable uncertainty applied to the conclusion. This uncertainty relates to the net effect of domestic unconventional oil and gas production on greenhouse gas emissions elsewhere, and indirect effects on energy production and demand.

Business as usual - CBM

8.35 The scale of development of CBM is anticipated to involve two pads each with 15 wells with an output of 13.1 billion cubic feet (bcf) for each pad.

8.36 Therefore the total volume of gas available for processing and use is significantly lower for CBM, than for shale oil and gas extraction. The effects on national greenhouse gas emissions are therefore judged to be minor negative.

Pilot project

8.37 The scale of production from a pilot project is unknown, however it is anticipated to be below that of an individual pad under the development scenarios as outlined previously. Therefore the greenhouse gas emissions from a pilot project in any location are anticipated to be negligible. This is however uncertain, reflecting the unknown scale of production.

Preferred policy position

8.38 The preferred policy position means that adverse climatic effects associated with the use of Scottish shale oil and gas production (greatest for the KPMG high production scenario, and less for the central and low scenarios), CBM production and, to a lesser extent, a pilot development, would be avoided.

8.39 This is considered to be a significant positive effect, though there is considerable uncertainty reflecting a lack of accurate information on the scale of development that would have taken place in the absence of the preferred policy position and the indirect changes in greenhouse gas emissions associated with wider changes in the supply and use of oil and gas.

Cumulative, synergistic and secondary effects

Business as usual – shale oil and gas extraction and CBM

8.40 The cumulative effects of all sources of greenhouse gases on climate change are greatest for shale oil and gas extraction under the KPMG high scenario. This generates the highest level of production of gas and associated liquids, results in the greatest number of pads and wells with impacts on land use, and generates the greatest impacts from transport and construction. The cumulative effects of greenhouse gas emissions for shale oil and gas extraction in Scotland are identified as significant negative. These effects are likely to be lower for the central and low KPMG scenarios.

Business as usual – CBM

8.41 The cumulative effects of greenhouse gas emissions from all sources from CBM development alone are identified as minor negative, reflecting the scale of development.

Pilot project

The cumulative effects of sources of greenhouse gas emissions from a single pilot project are judged to be negligible, reflecting the scale of development.

Preferred policy position

8.42 The preferred policy position means that adverse climatic effects associated with the development and use of Scottish shale oil and gas (greatest for the KPMG high production scenario, and less for the central and low scenarios), CBM production and, to a lesser extent, a pilot development, would be avoided.

8.43 This is considered to be a significant positive effect, though there is considerable uncertainty reflecting a lack of accurate information on the scale of development that would have taken place in the absence of the preferred policy position and the indirect changes in the wider supply and use of oil and gas.

Scope for further mitigation

8.44 The assessment results are based on the application of existing regulatory controls. The evidence base includes information on a number of processes which could be implemented to reduce the scale of impact on the climate. These could reduce the overall potential scale of effect from unconventional oil and gas development, and therefore the associated scale of effect avoided as a consequence of the preferred policy position.

8.45 The applicability and practicality of many of these additional measures will be determined at a site specific level so it is not possible to draw firm conclusions as to the extent to which they would mitigate predicted effects successfully. Potential measures include:

8.46 Direct greenhouse gas emissions – many of the air mitigation measures are relevant to mitigating greenhouse gas emissions, particularly direct greenhouse gas emissions including: controlled and uncontrolled releases of produced gas; and, the combustion of fossil fuels for on-site power and transportation. These include annual inspections and repair, the use of advanced monitoring technologies (e.g. DTS and DAS), the use of supply chain management and ICT resources, the use of pipelines to replace transport, and the re-use of wastewater.

8.47 Greenhouse gas emissions associated with land use change – avoiding development on high carbon soils is likely to have positive effects in terms of reducing greenhouse gas emissions associated with land use change.

8.48 Furthermore, greenhouse gas emissions could also be reduced through carbon offsetting. Carbon offsets are typically achieved through financial support for projects that aim to reduce the emission of greenhouse gases, which, in turn, compensate for emissions made elsewhere. Examples of such projects include forestry projects (e.g. wood planting), energy efficiency projects, and renewable energy projects such as wind farms, biomass energy, or hydroelectric dams. As such, carbon offsets could be achieved through investment in renewable energy sector or woodland planting.

Table 8.1: Summary of effects on climate

Environmental impact	Alternative	Potential scale of development	Timescale when effect may occur	Duration of effect	Predicted effect taking account of existing regulation	Key areas of uncertainty
Controlled and uncontrolled release of produced gas	Business as usual– shale oil and gas extraction	Major	Short to long term	Permanent	A potential significant negative but uncertain effect is identified for all three KPMG scenarios. The occurrence of controlled and uncontrolled emissions is assumed to increase with the number of wells developed, and therefore the high KPMG scenario is identified as having a greater effect on national greenhouse gas emissions.	There is uncertainty over the characteristics which cause some unconventional oil and gas developments to be super emitters, and therefore on the extent to which this effect would occur in Scotland, or the quantity of greenhouse gases emitted. There is also uncertainty as to the extent to which vented emissions differ, in terms of scale and carbon footprint.
	Business as usual– coal bed methane extraction	Minor	Short to long term	Permanent	A minor negative uncertain effect on national greenhouse gas emissions is identified. This reflects the scale of anticipated development of CBM involving a total of 30 wells which is lower than that for shale oil and gas for the KPMG production scenarios.	It is uncertain whether the occurrence of controlled and uncontrolled release of produced gas varies for the processes involved in shale oil and gas extraction and CBM.
	Pilot project	Minor	Short to long term	Permanent	A negligible effect is identified reflecting the scale of effects from a single pad.
	Preferred policy position	None	Short to long term	Permanent	A significant positive effect is identified in relation to greenhouse gas emissions, reflecting the avoidance of any adverse effects on climate change from unconventional oil and gas development
Combustion of gas or fossil fuels for on-site power and for transportation	Business as usual– shale oil and gas extraction	Major	Short to long term	Permanent	A negligible effect is identified as these effects are not anticipated to be significant at a regional or national scale in relation to greenhouse gas emissions for any of the three KPMG scenarios.
	Business as usual– coal bed methane extraction	Minor	Short to long term	Permanent	A negligible effect is identified reflecting the overall impacts from on-site power and transportation from the development of two pads for CBM extraction.
	Pilot project	Minor	Short to long term	Permanent	A negligible effect is identified reflecting that the development of a pilot project will involve the development of a single pad and an unknown number of wells.
	Preferred policy position	None	Short to long term	Permanent	This effect is judged to be negligible, reflecting the avoidance of negligible effects.
Greenhouse gas emissions associated with land use change	Business as usual– shale oil and gas extraction	Major	Short to long term	Permanent	A significant negative effect on national emissions is identified for the KPMG high scenario, with lesser effects for the central and low scenarios. A larger number of pad and well developments increases the likely extent of impacts and the location on high carbon soils.	Uncertainty relates to the unknown location of development in relation to areas of high carbon soils.
	Business as usual– coal bed methane extraction	Minor	Short to long term	Permanent	A minor negative effect is identified, reflecting the scale of development of two pads and 30 wells.
	Pilot project	Minor	Short to long term	Permanent	A minor negative effect is identified, reflecting the scale of development of a single pilot.
	Preferred policy position	None	Short to long term	Permanent	A significant positive effect is identified reflecting the avoidance of significant adverse effects on soil.
Greenhouse gas emissions from processing and use of unconventional oil and gas products	Business as usual– shale oil and gas extraction	Major	Short to long term	Permanent	A significant negative effect is identified reflecting the scale of emissions from the three KPMG production scenarios, and commitments to Scotland’s climate change targets.	Uncertainty relates to the net effect of domestic unconventional oil and gas production on greenhouse gas emissions elsewhere, and indirect effects on energy production and demand.
	Business as usual– coal bed methane extraction	Minor	Short to long term	Permanent	A minor negative effect is identified as the total volume of gas available for processing and use is significantly lower for CBM, than for shale oil and gas extraction
	Pilot project	Minor	Short to long term	Permanent	A negligible effect is identified as production is anticipated to be below that of an individual pad under the development scenarios.	The scale of production from a single pilot is unknown.
	Preferred policy position	None	Short to long term	Permanent	A significant positive effect is identified reflecting the avoidance of significant negative effects.
Cumulative	Business as usual– shale oil and gas extraction	Major	Short to long term	Permanent	A significant negative effect is identified under the KPMG high scenario. This generates the highest level of production of gas and associated liquids, results in the greatest number of pads and wells with impacts on land use, and generates the greatest impacts from transport and construction. These effects are likely to be lower for the central and low KPMG scenarios.
	Business as usual– coal bed methane extraction	Minor	Short to long term	Permanent	A minor negative effect is identified reflecting the scale of development.
	Pilot project	Minor	Short to long term	Permanent	A negligible effect is identified reflecting the scale of the development.
	Preferred policy position	None	Short to long term	Permanent	A significant positive effect is identified reflecting the avoidance of significant negative effects.	There is a lack of accurate information on the scale of development that would have taken place in the absence of the preferred policy position and the indirect changes in the wider supply and use of oil and gas.