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Dr. William Fleckenstein, adjunct professor at the Colorado School of Mines, knows fracture stimulation or “fracking,” like the back of his hand. As a former scientific advisory board member with the National Science Foundation, he often inquires into fracking, and how it is changing the shape of energy conversations worldwide.
“This is a transformational moment for the world-energy situation,” says Fleckenstein. “Until fracking technology was developed, nothing could be produced from the extensive shale resources found in some 26 states of the USA. The shale deposits here in the USA are massive—Illinois, Michigan, West Virginia and Pennsylvania have deposits nearly underlying their entire areas. They’re 100s of miles long and 15 to 100 miles wide, and they contain an awful lot of oil and gas.” His excitement finds reflection in the 2011 Annual Energy Outlook, prepared by the U.S. Energy Information Administration (EIA). According to the EIA, technically recoverable U.S. shale gas resources are now estimated at an impressive 862 trillion cubic feet.
Drilling for natural gas has now spread to many oil-prone formations, according to Fleckenstein. Anywhere there is oil and gas development, there has to be a source rock for it. There is uncertainty if the current technology, largely designed to extract massive gas volumes from conventional reservoirs, is going to be good enough to produce it therefrom. “But the technology is really improving all the time,” adds Fleckenstein.
In short, there’s an energy revolution going on. For anyone in tune with energy issues or even for those just tuning into the news—fracking is the buzz. The fracturing of rock strata using water and sand at high pressures to obtain oil and natural gas dates back in the 1940s. But the relative abundance of oil derived from more traditional methods and less sophisticated technology meant fracking took place less often. Those days are over.
At the moment, advances in drilling, especially horizontal drilling technology and rising prices for oil, have combined to allow for vastly greater developments in fracking. Resources not economically viable prior to the development of horizontal drilling technology are suddenly very much in demand. Fracking, in fact, is used to obtain both oil and natural gas, though news articles and stories generally emphasize its use in deriving natural gas.
“Fracking has led to the development of resources that were not either technologically or economically feasible to develop in the past,” explains Stan Dempsey, president of the Colorado Petroleum Association. Dempsey sees the possibility that the discovery of oil and natural gas deposits in places where they were never expected before may, actually, offset the need for foreign imports.
Poland may contain Western Europe’s greatest shale gas resources. Over one hundred test wells are slated to be drilled in Poland in the coming years. The drilling gamble could result in trillions of cubic meters of gas for the country. In the process, it could free the country from the soot and pollution of coal—where 95 percent of its current energy is derived from, and also free it from dependence on Russian natural gas. Clearly Poland sees an unprecedented opportunity to turn from traditional natural gas consumer into its producer, amid all the energy turmoil in regions such as France, Germany and Italy, and could position itself as a leader by tapping into its shale reserves.
Fleckenstein visited Poland in early January 2012, to present a workshop for members of the Polish government and regulators. The big issues discussed involved what needs to be done to make sure wells are safe. “Right now, Poland imports about 70 percent of their natural gas from Russia,” adds Fleckenstein. “But, first of all, they’d like to produce enough natural gas for their own economy. If they can do that, they can back out of any dependence they have on the Russians. Further east is the Ukraine, part of the former Soviet Union, which also has abundant shale plays. “It’s one way the grip of Russia on their former satellites will be loosened even further. In Romania, I’m soon to be involved in more workshops on how fracking is done, and how the wells are set up to protect surface waters,” adds Fleckenstein.
Talking about shale gas production globally, one can hardly avoid China with its 1,275 trillion cubic feet of technically recoverable shale gas resources. In comparison, it surpasses U.S. analogue assets—almost doubling them.
Leading the world in coal production (3,240.0 million tons in 2010, according to BP), China still satisfies two-thirds of its energy needs through burning coal, and holds the title of world champion in polluting air with enormous quantities of carbon dioxide.
Perhaps, because of the questionable fame, but very likely due to the fact that traditional reliance was always on coal which evidently hindered economic development, China is now moving in a different direction. Looking forward, Chinese authorities have shifted dramatically the country’s 2011-2015 energy strategy and made the shale gas fields development a part and parcel of it.
For the time being, efforts are mainly focused on evaluating industry potential and identifying shale gas reserves. Concurrently, Chinese authorities, interested in receiving modern technologies, swiftly prepare the ground for potential Western investors, revising legislation related to hydrocarbon production, and envisaging tax concessions and privileges for joint venture participants.
The plan is that the efforts will make it possible to increase the share of shale gas in total natural gas production 12 percent by 2020. Along with China go Argentina and Brazil. Despite geographical remoteness, these South American countries resemble China in terms of potential large shale gas reserves and relative readiness of their industrial infrastructure, capable of facilitating commercial quantities of shale gas in a short period of time.
In Africa, the leading role to tap into shale gas reserves would belong to South Africa. This country remains dependent on natural gas imports. But it has very good prospects for a 180
degree shift from being a consumer to a producer, owing to its substantial, technically recoverable shale gas reserves, the largest on the continent, estimated at as much as 485 trillion
According to an EIA initial assessment, South Africa’s shale gas resource endowment is interesting, “as it may be attractive for use of that natural gas as a feedstock to their existing gas-to-liquids (GTL) and coal-to-liquids (CTL) plants.”
While horizontal drilling and hydraulic fracturing technologies help increase natural gas extraction by multiples, they can add to environmental concerns of people who live in close proximity to wells. They may fear water and air pollution, earthquakes and carbon dioxide emissions.
Having heard environmentalists’ concerns, France in 2011 became the first country in the world that has officially banned fracking. Explaining the decision made, the country’s environment minister said that the impact of fracking should be researched and evaluated more thoroughly.
In the United States, fracking technology is being increasingly tested by scientists. The results still vary. The findings presented by Duke University on methane in drinking water allow both opponents and supporters of hydraulic fracturing to draw arguments for debate. The study done by the state of New York is unequivocal. Fifteen different regulators from Pennsylvania, New Mexico, Texas and Colorado haven’t found a single case of groundwater contamination caused by fracking.
In any case, with more funding assigned by governments and other parties interested in exhaustive studies, more advanced and well-grounded results won’t be too long in coming and
with no doubt will help increase public confidence.
Despite remaining controversy, fracking technology is actively being taken on board by companies involved in shale gas extraction.
The dynamics of shale gas production look really impressive. According to the U.S. Energy Information Administration, it is now the largest contributor to the projected industry
growth. Shale gas has already become a “game-changer” for the U.S. natural gas market, and, by 2035, it will make a 46 percent share of the U.S. natural gas production.
Evidently enough, tremendous shale gas-related opportunities are currently open not only in North America but around the globe. Poland welcomes the international business community. Poland became the first and, so far, the only European country which has opened the doors for full-scale drilling. Prospective drilling carried out in Poland just recently by Marathon Oil, Orlen and San Leon Energy has brought promising results. Now Chevron is going to gain a foothold there. All this allows the Poles to praise a “new energy revolution” and foresee the start of commercially viable massive production of shale gas as soon as 2014.
Will fracking level the global energy playing field? There are so many variables at play that nobody can accurately predict the future, but what we can say for sure is that new fracking players will get a chance to appear on the stage. They will have a dramatic effect on foreign oil dependency, and fracking will make the global energy market more viable and sustainable.
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