I've had my criticisms of Bernstein Research's perennial bearishness on first US,  (since correcting) and then European shale.  But this from a research note is well worth considering.  Sorry no publicly available link yet. The title can't make it any clearer:

Frack-Induced Earthquakes – A Tale of Shaking and Fury, Signifying Nothing 

Can Mankind cause earthquakes? Yes. Reasonably big ones in fact.

Can the Oil & Gas Industry cause earthquakes? Yes. It can and it has. But basically small ones.

Does the public understand the Richter Scale? No. But then again, they buy lottery tickets and worry about sharks.

Are frack-related earthquakes dangerous? No.

Are there more important things to worry about? Yes. 

A couple of great charts follow, Cuadrilla made a mistake at Balcombe last week in not adequately explaining earthquakes. The audience, like everyone else, can't be expected to understand seismology any more than geology, energy or the laws of physics. This would have helped

In other words, there are two earthquakes the size of the largest Cuadrilla earthquake every minute, and continual instances of the 1.5 Richter scale size that bottled up further UK fracking.

There was for example one gentleman present last week who was very upset at the thought that a 160 year old railway viaduct would collapse from earthquakes - so much so that he took 99% of the audience with him. Cuadrilla were probably battle weary by then, and I couldn't the get the Chairman's attention to state the obvious: a passing train shakes things up far more than minor earthquakes.

quake1

Exhibit 2 charts various earthquake events in terms of energy on a linear scale. Note how trivial a 4-4.9 magnitude earthquake is compared to a massive 9-9.9 magnitude earthquake. There are hundreds of millions of sharks in the ocean but a handful of human fatalities a year (which preferentially seize the attention of the public and create a biased image of what a shark does)

Sometimes numbers just have too many zeros to make any sense, but Bernstein helpfully put this into figures everyone can understand, winning the lottery

quake2

Similarly, baying for blood and taking the audience with them at the Gas Drilling in Balcombe blog, someone is seeking cast iron guaranteess from Cuadrilla that there will be no earthquakes. The response must be that nothing is impossible. But as they say in the New York Lotto: All you need is dollar and a dream, while neglecting to  mention you may end up with neither. Here in the UK, they used to say you've got to be in it to win it. Which means we should aslo drill an exploration well before we can possibly talk about production.

 powerball

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