Sept. 6 (Bloomberg) -- Property developer Julie Wilde says the fracking of an oil field under her beach-side villa on England’s south coast has done nothing to hurt the value of the 9 million-pound ($14 million) home.
Oil exploration hasn’t affected the area “one little bit,” Wilde said as she drove an Audi A5 convertible through her house’s electric gates. “It’s a really, really nice place to live. It’s almost like being on holiday all the time.”
Wilde and other residents of Sandbanks, a wealthy enclave overlooking England’s largest natural harbor, hardly notice the presence of the U.K.’s biggest onshore oil field, lying about 1.5 miles (2.4 kilometers) from their mansions.
Wytch Farm is a field developed by BP Plc more than 30 years ago. It’s one of several deposits around England that’s produced oil through the years using both horizontal drilling and hydraulic fracturing, or fracking, techniques that campaigners say will pollute the environment if used in shale fields. As the government pushes for a U.S.-style energy boom from shale to spur Britain’s sputtering economy, it can bolster its case pointing to Wytch Farm’s safety record.
“What’s been done at Wytch Farm is perhaps a big example” of how the industry can operate, said Simon Lockett, chief executive officer of Premier Oil Plc, a London-based explorer that owns 30 percent of the field. “What you’ve got to do is to be extremely vigilant as an industry to make sure that you don’t mess up.”
The local authority, Dorset County Council, said this week Perenco SA, the French company which took over the field from BP in 2011, should be allowed to continue pumping until 2037, judging there will be no significant impact on the environment.
About 80 miles northeast of Sandbanks, at the village of Balcombe in Sussex, residents take a different view. Last month, campaigners disrupted drilling planned by Cuadrilla Resources Ltd., an explorer whose directors include former BP CEO John Browne. The protesters said drilling could damage water supplies, cause noise pollution and cut property prices.
“There is a huge concern about contamination of ground water with the risk not just to humans but also to livestock,” Ewa Jasiewicz, a spokeswoman for No Dash for Gas, said by phone. In Balcombe, about 85 percent of 770 households oppose fracking, she said, citing a survey conducted by the No Fracking in Balcombe Society.
In the U.S., where fracking has reversed declines in oil and gas production, the Environmental Protection Agency recorded only one case of water contamination from fracking operations since 2009, and then dropped the case when its data was challenged.
Although Cuadrilla hasn’t yet produced any oil or gas and says it has no plans to frack at the site, Balcombe, which may sit on top of oil-bearing shale rock, has become the focus of the national debate on shale drilling as explorers look at areas throughout the country.
The British Geological Survey estimates a single area --the Bowland basin stretching from the east Midlands into England’s northwest -- may hold as much 1,300 trillion cubic feet of gas. Even if only 10 percent of the gas is extracted, a typical rate in the U.S., that’s enough to meet 47 years of U.K. demand.
Chancellor of the Exchequer George Osborne has proposed the world’s most generous tax system to encourage drilling of U.K. shale deposits. Exploiting so-called unconventional resources can replace largely depleted North Sea fields that are starting to run dry and cut energy costs for consumers, he said.
The government will license more areas for exploration in 2014, estimating that as many 40 wells will be drilled over the next two years, Energy Minister Michael Fallon said last month.
Even before shale wells produce any commercial oil and gas in the U.K., fracking has been used to keep production going at Wytch Farm, which pumps about 20,000 barrels of oil a day now. The field, which peaked at 110,000 barrels a day in 1997, has horizontal wells stretching more than 10 kilometers under Sandbanks and into the English Channel.
Drillers have fracked more than 200 wells at sites through the U.K., including Wytch Farm, according to James Verdon, a geophysicist at the University of Bristol. Although the process, which employs a mixture of pressurized water, sand and chemicals, has come to prominence because of results at U.S. shale fields, the technique has also been used to coax more from conventional fields.
While the fracking at Wytch Farm is on a smaller scale than what would be needed for a shale field, “the risk profile of what is proposed isn’t very different from the risk profile of what has been done before,” Verdon said in an interview.
The combination of horizontal drilling and fracturing has allowed for the cost effective development of Wytch Farm, including getting oil from under Sandbanks in Dorset, the Royal Society said in a study published last year.
Perenco said there’s a distinction between the fracking carried out at Wytch Farm and way the technique is used in shale fields.
“We believe that the current public concern about fracking relates to extensive, high-pressure, hydraulic fracturing using high volumes of liquid in very low permeability rock,” the company said in a statement. “Hydraulic fracturing of this type has not been carried out at Wytch Farm.”
Wytch Farm stands next to one of England’s most environmentally sensitive areas, Poole Harbor, deemed a site of special scientific interest for its geology and wildlife. The area on the Isle of Purbeck is also home to dinosaur fossils that made it a Unesco World Natural Heritage site.
“There is a particularly superb development of beautiful coastal landforms on the Isle of Purbeck,” Unesco said in a December 2009 report.
Tourism in Poole and Purbeck accounted for about quarter of 1.5 billion pounds spent by visitors in the Dorset county in 2011, according to the South West Research Co. data. The local landscape was painted by J.M.W Turner in the 19th century.
“The U.K. needs to be self-sufficient in its energy,” said Adrian Dunford, a principal at Tailor Made estate agency at Sandbanks, where one waterfront house lists for 7.25 million pounds. “There’s always been oil production here. There is no negativity to what’s going on.”
--Editors: Will Kennedy, Todd White