NEW DELHI: The initial hype over India’s shale gas potential seems to be making way for a more sober assessment of the unconventional energy that could actually be extracted from rock formations.
From an initial assessment of 300 trillion cubic feet (TCF) to 2,100 TCF of producible and non-producible gas present in Indian basins (called in-place gas), the latest study has brought down the ‘technical recoverable’ gas to about 6.1 TCF.
The estimate of technical recoverable gas recently given to India by the US Geological Survey is a fraction of the in-place gas that could be recovered with existing technology without regard to cost. If commercial viability of extraction is also taken into consideration, the amount of recoverable gas would be lower. Earlier, the US Energy Information Administration had given an estimate of 293 TCF of in-place gas, whereas New York-listed Schlumberger had made an initial gas-in-place estimate of 300-2,100 TCF.
Even the latest assessment of 6.1 TCF could prove to be ambitious when experts get access to more geological data and interpret them to remove the various uncertainties involved in making projections. The most reliable estimates are ‘proven reserves’, indicating the amount of hydrocarbon that could be extracted through existing wells in a developed oil or gas field.
India, which plans to announce a policy for auctioning shale gas blocks by March 2013, is way behind China that has already signed its first shale gas production sharing contract with the Royal Dutch Shell in March. Beijing wants to produce 6.5 billion cubic meters (BCM) a year of shale gas by 2015 and close to 100 BCM by 2020.
Gas accounts for only 10.6% of India’s primary sources of energy, compared to the world average of 24%. Raising the use of gas in the energy mix would help the country lower its dependence on coal, its largest source of energy. It would also help in reducing the country’s oil import bill and carbon emissions.
However, concerns regarding water contamination and the potential for triggering seismic activity could slow down India’s quest for this clean source of energy. After banning shale gas exploration for almost a year due to its role in two earthquakes, the British government on Tuesday supported hydraulic fracking or pumping water, sand and chemicals into earth to shatter rock formations and capture the gas, under strict safeguards. Fracking would be stopped even if minute seismic activity is noticed.
“There is an environmental cost attached to whatever form of hydrocarbon you drill for… We need to find ways to mitigate them for the sake of having clean energy,” said Deloitte’s Asia Pacific head for energy & resources Adi Karev.
International Gas Union president Abdul Rahim Hashim told FE recently that India has got the conventional natural gas, coal bed methane and shale gas. Some of the moratoriums on shale exploration in countries such as France are perhaps based on perception rather than reality, he said. Indian policymakers should consider the facts on these matters so that they do not decide not to utilise the resources that will go a long way in reducing the nation’s carbon emissions, Hashim added.