China’s Ragtag Shale Army Far from Revolution

China’s vast estimated shale gas reserves may hold the eventual promise of lower-carbon energy—at least compared with the country’s current diet of coal—and freedom from the need to secure oil supplies from the Middle East through the Strait of Malacca or across Myanmar or Pakistan. But lack of experience and expertise, environmental concerns and geological complications all threaten to scupper Beijing’s ambitious targets for shale development. From Chen Aizhu at Reuters:

China’s plans to unlock what could be the world’s biggest shale gas reserves risk running further off track after 16 firms awarded exploration rights in the latest auction lacked one core skill – not one has drilled a gas well before.

Beijing is hoping shale gas can transform the country in the same way as the U.S. boom, though to date there has been little commercial production and a target of producing 6.5 billion cubic meters of gas by 2015 in the world’s biggest energy consumer looks out of reach, according to industry experts.

The lack of experience exploiting shale among new firms scrambling to enter the sector will make it an even bigger challenge to get at the gas, and if they fail to deliver China will struggle to reduce its dependence on expensive imports of oil, liquefied natural gas and coal.

One result of the geological challenges in China is that hydraulic fracturing, or “fracking”, may require 25-30% more water than in the United States, a thirst China is ill-equipped to satisfy. At chinadialogue, Timothe Feodoroff and Jennifer Franco outline how fracking works and how it threatens the country’s already strained water supplies.

Water contamination can result from accidental spills during truck transportation, leakages through cracked or corroded cement casing of the wells, or as fugitive gas through the rock fractures themselves. Wastewater, known as “produced water”, poses serious risks. For every million gallons of chemical-laced frac fluid injected down the drill wells, 20-40% will be regurgitated back to the surface, bringing with it: chemicals, traces of oil-laced drilling mud, and all the other toxic substances previously trapped in the rock – such as iron, chromium, salt, and radioactive materials including Radium 226.

Most water treatment facilities today are not designed to handle fracking wastewater. As a result, much of it ends up sitting in large ponds and eventually entering rivers and streams. […]

[…] One issue in China […] is the way fracking will exacerbate “water grabbing”. To achieve the target of 229 billion cubic feet of shale gas will require no less than 485 million cubic feet of water. Yet, according to the same source, “most of the nation’s shale gas lies in areas plagued by water shortages”. A recent drilling test operation in Northern Shaanxi Province encountered complications, forcing local officials to temporarily cut a nearby city’s water supply. These risks are all the more threatening in a country that already faces major water conflicts.

Feoforoff and Franco also note a link between fracking and earthquakes in the U.S. and U.K.. Much of China’s shale gas lies under the seismically vulnerable Sichuan province, where human activity has already been blamed for the devastating earthquake that killed some 80,000 people in 2008.

At Reuters, on the other hand, John Kemp argued in January that “the problems [in China] do not appear worse than in other parts of the world, and the prize is enormous.” Caixin’s Wang Xiaocong reported on the environmental risks of fracking in November, while the benefits and drawbacks of shale gas exploitation in general were the subject of a debate at The Economist in February.


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