As many countries become wary of nuclear power following Japan’s atomic disaster, they are looking to natural gas as the best alternative for generating electricity.
Gas is the cleanest burning fossil fuel and Japan is already the world’s largest importer of it in super-cooled form, as liquefied natural gas. LNG was chosen by Japan to provide gas for home use, industry and power years before last month’s earthquake and tsunami turned the Fukushima No. 1 nuclear plant into a dangerous source of radioactivity and forced it close.
However, since Japan took the decision to make LNG an important part of its energy policy, a revolution in gas production has rapidly gathered momentum. It has greatly increased global gas supplies and driven down the price, even as oil prices have soared.
The revolution began in the United States in the 1990s after energy companies showed that gas trapped in shale rock deep underground could be profitably extracted for the first time. Until then, only conventional gas in large reservoirs of porous rock could be tapped.
The new system devised by U.S. firms involved drilling vertically down into the shale, then extending the well horizontally and pumping in a mixture of water, sand and chemicals under high pressure.
This technology, known as hydraulic fracturing or “fracking,” cracks the shale. The fissures are held open by the sand particles, releasing gas to flow up the well.
Today, fracking is used in nine out of 10 wells in the US, which in barely a decade has been transformed from a nation on the verge of becoming a major gas importer into a major gas producer.
Gas is already heating half of America’s households. It may soon start replacing coal as the main fuel for generating base-load electricity. By 2035, shale gas is projected to account for 46 percent of U.S. gas production, up from 23 percent in 2010.
Shale gas also has promising prospects elsewhere in the world, although not in Japan. Earlier this month, the U.S. Energy Department released a study of 48 major shale basins in 32 countries.
It concluded that technically recoverable gas in these basins and those in the U.S. amounted to 6,622 trillion cubic feet (TCF), raising global gas reserves by over 40 percent.
The survey did not include offshore seabed reserves, or reserves in Russia and some Middle East countries. Nor did it cover another potentially huge source of unconventional gas, methane trapped in coal seams.
Thanks to newly included reserves from shale and coal beds, the International Energy Agency reckons the world might have twice as much gas than previously thought – enough to last for 250 years at current usage rates.
The U.S. Energy Department study found that countries with large shale resources included Argentina, Canada, Mexico, Australia, South Africa, Libya, Algeria, France, Poland, Brazil, Norway and Chile. But it concluded that the potential shale giant was China, with 1,275 TCF of recoverable gas, far larger than the estimated U.S. reserve of 826 TCF.
Chinese state-owned energy giants are investing billions of dollars in shale gas joint ventures with Western firms in North America. They want to acquire the expertise to develop China’s own reserves.
With demand rising fast, China seems set to become heavily dependent on imported gas as well as foreign oil. However, if China could exploit its shale deposits, gas self-sufficiency could be assured and overall energy security improved.
Yet “fracking” is controversial. This follows reports that some U.S. wells have polluted underground and surface water supplies, that some of the chemicals used are toxic, and that some residues forced to the surface are radioactive.
The U.S. Environmental Protection Agency reported in 2004 that “fracking” did not pose a threat to drinking water. But its study did not include shale drilling.
Fracturing shale rock for up to 2 km underground requires about five times more chemical-laden fluids than vertical drilling. So the agency is in the midst of a new study.
The relatively clean reputation of gas among fossil fuels is based on its lower carbon dioxide emissions (CO2) when burned. It emits approximately half the amount of CO2 as coal and about 30 percent that of oil.
However, research published in the U.S. last week contends that so much methane escapes in the production lifetime of a well and pipeline extracting shale gas that it allows more greenhouse emissions into the atmosphere than coal. CO2 and methane, the main component of natural gas, are the two most potent global warming emissions from human activity.
These pollution and global warming allegations are rejected by the gas industry. They are unlikely to deter China and other energy-hungry developing nations from exploiting their shale gas resources, especially where reserves are located in sparsely populated zones.
But in North America, Europe and Australia the pace of development may slow if stronger evidence emerges that unconventional gas production threatens human health and the environment.
Japan will almost certainly be able to import more LNG in future. But its best hope for gas self-sufficiency is in the big reserves of methane hydrates that lie offshore beneath the seabed in the exclusive economic zone claimed by the Japanese government.
Michael Richardson is a visiting senior research fellow at the Institute of South East Asian Studies in Singapore.