Shale Gas: The True Story

Posted on February 29th, 2012 by
   

 

As citizens of the world, consumers of energy and environmental stewards, our responsibility is to
build a sustainable, environmentally friendly and economically viable energy source.  By design, few of us are in love with fossil fuels, however, we must be realistic. As the search continues for the best energy solution(s), time-and-time again the compass points north to Natural Gas.

Natural gas production from shale formations rich in hydrocarbons, known as “shale gas,” is one of the most rapidly expanding trends in onshore domestic oil and gas exploration and production today. Why? It is because, key industrial centers are sitting on vast shale gas energy opportunities. This is no longer a fantasy but a vision that can benefit the world not just tomorrow, but TODAY.

Countries including Argentina, Australia, Brazil, Canada, China, France, Mexico, Poland, South Africa and the United States have an abundant domestic resource base of technically recoverable shale gas. Secondly, natural gas is clean; in fact the cleanest of all fossil fuels (see following chart). Being an organic compound, it certainly has a carbon footprint, but natural gas emission levels of carbon dioxide (“CO2”), carbon monoxide (“CO”), nitrogen oxides, sulfur dioxide, particulates and mercury are on average 40% to 100% cleaner than coal. And with the exception of CO, natural gas is 28% to 100% cleaner than petroleum.

Furthermore, the economic impact from developing shale gas has a multiplier effect far beyond just the supply chain from wellhead to exports. This “Shale Gale” as we call it in the U.S. has the potential to support more than 1.6 million jobs and generate more than $933 billion in federal, state and local government tax revenues over the next 25 years.

Using the U.S. as an example, natural gas has transformed the outlook of U.S.’s energy mix.

U.S. Shale Plays have:

  • Created 600,000 jobs in the U.S. in 2010,
  • Added about $1,000 in disposable income per household,
  • Introduced higher paying jobs at about 23.00 USD per hour,
  • Contributed about $77 billion to the nation’s economy.

Source: HIS Global Insight

When you put these benefits together, you get what is called the ‘Triple Bottom Line’, an integration of values for measuring success: success in terms of social, ecological, and economic benefits. Shale gas is an endeavor of national social responsibility.

  • People – in terms of an improvement towards labor and the community.
  • Planet – in terms of benefits towards the ecology and the environment.
  • Profits – in terms of real economic benefits enjoyed by the residential, commercial and industrial sectors.
Thus, natural gas is one of the rare resources that benefits all of these somewhat conflicting constituencies. Consequently, this sets the stage for both opportunities and challenges. Opportunities in terms of, jobs, economic value, and government revenue! And downstream challenges in developing an adequate infrastructure and stimulating demand.The world is at a crossroad; a crossroad of how to balance the tremendous quantity of undeveloped resources, with the complexity of developing an infrastructure to support demand, while protecting the community and the environment.In many countries, coal is primarily used to generate electricity. It is this sector that can immediately benefit by developing shale plays. As the demand for electricity grows, new gas-fired electrical power generation stations can replace the need for coal-fired plants.  In the U.S., the Levelized costof gas-fired stations is about 6.6 cents per kWh verses 9.5 cents for coal-fired plants. A double benefit of using natural gas – cheaper and cleaner electricity production!Long-term opportunities to stimulate domestic demand include an infrastructure supporting natural gas fueled vehicles.The world is proceeding with due caution to develop their shale plays. The dilemma is how best to manage the risks to the community, environment and economy while developing a valuable resource and markets.Shale gas development has raised many concerns by industry critics and citizens. New gas developments bring change to the environmental and socio‐economic landscape, especially where gas development is a new activity. These changes have raised questions about the nature of shale gas development, and the ability of the current regulatory structure to deal with this development.Purported issues include natural gas’s impact on:•        human health and safety•        the environment•        fresh water reserves•        air quality, and•        seismic activity.

All valid concerns to think first and drill later! To this end, regulatory agencies, policy makers, and the general public need an objective source of information by means of which they can address these issues.

Now let’s demystify a few critical aspects of development. Time to separate fact from fiction! Let’s begin with hydraulic fracturing, simply because it is essential for shale gas completion and central to many controversies over its production.

Both horizontal drilling and hydraulic fracturing are established technologies with a significant track record; horizontal drilling dates back to the 1930’s and hydraulic fracturing has a history actually going back to the 1860’s, when nitroglycerine was used to stimulate shallow, hard-rock oil wells. It was surprisingly very successful and not so surprisingly very hazardous and often illegal.  

Fracturing fluid is a proprietary slurry comprised of at least 98% water and sand with the remaining 2%, or less, consisting of chemical additives each having a specific function. Although there are hundreds of chemicals that could be used as additives, there are typically no more than 12 used in the fracturing process.  Most of the additives are commonly used household or personal care items, which pose little or no health risks.  However, a limited number are hazardous, and only one routinely used additive, ‘ethylene glycol’, is poisonous if swallowed in sufficient quantities. It is important to note that ethylene glycol is widely used as automotive antifreeze.

For this reason, the ingredients of the fracturing fluid must be transparent. Legislation should be put in place to have the operators disclose the makeup of the fluid.  Also, of prime importance, are the corresponding regulations to ensure proper injecting and disposal methods.

Pure, clean groundwater! Nothing can replace it. This is why fresh-water aquifers need to be protected through legislation. The concerns around groundwater contamination are primarily centered on one fundamental question: Are the fractures such, that they do not contact underground sources of drinking water?

 

Source: MIT Research Study, Natural Gas, Chapter 2

From the above diagram, it can be seen that protection is afforded by casing and cementing, where ‘casing’ isolates fresh water zones from inside the well and ‘cementation’ seals the annular spaces within the casing to create a hydraulic barrier to fluid migration. In addition, there are natural barriers in the rock strata that act as seals holding the gas in the target formation.  A fundamental precept of shale gas geology is to ensure sufficient separation and effective sealing between the shale layers and overlying aquifers.

Part 2

 

 

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One Person has left comments on this post



» Antony said: { Mar 5, 2012 - 07:03:56 }

Wow. That’s certainly one person’s opinion and some great propaganda for the Halliburtons of the globe. I think the wikipedia article on it has more references than this, rather transparent one (http://en.wikipedia.org/wiki/Hydraulic_fracturing)

I do love the way people use the misnomer term ‘clean’ in reference to a technology that is purportedly cleaner than another. Natural gas, as you have said is not a clean fuel, merely cleaner than fossil fuels. Although Howard et al disputes even this claim in an LCA study! (Howarth, Robert W.; Santoro, Renee; Ingraffea, Anthony (2011). “Methane and the greenhouse gas footprint of natural gas from shale formations”. Climatic Change 106 (4): 679–690)



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