|

SHALE OIL

Shale oil vein raises energy, tech hopes

Akita seam first to face fracking

by Natsuko Fukue

Staff Writer

For the first time ever this month, shale oil was extracted from a Japanese oil field.

Although the Ayukawa oil and gas field in Akita Prefecture likely doesn’t hold vast quantities, its yield is still good news for a nation seeking new energy resources as it turns away from nuclear power in light of the disaster at the Fukushima No. 1 power plant.

Japan’s fuel self-sufficiency rate is only 4 percent, or 18 percent if nuclear power remains an option, according to the Natural Resources and Energy Agency. The energy self-sufficiency rate in many industrialized nations ranges from 50 to 153 percent.

Following are questions and answers on shale oil in Japan:

What is shale oil?

It is a dark oil produced by the destructive distillation of bituminous shale — sedimentary deposits that are generally located deep underground.

The oil can be refined into a fuel akin to petroleum, but unlike normal oil fields, which can be tapped by drilling perpendicular wells, shale oil is more difficult to extract because shale layers are very hard to shatter and often must be approached from an angle.

How is shale oil extracted?

Japan Petroleum Exploration Co. (JAPEX), which carried out the early October extraction, did so by pumping hydrochloric acid into shale layers about 1,800 meters underground. The acid removed limestone from cracks in the rock layer to make it easier for shale oil to be tapped. The extraction effort started Oct. 1 and ended the next morning.

On Oct. 3, it was confirmed the extracted liquid contained shale oil after it was put into a centrifuge. The company continued the extraction until Oct. 8 and announced that about 31 kiloliters of the oil was contained in 100 kiloliters of the liquid mixture collected from the well.

The Ayukawa field was first found in 1989, but JAPEX only recently succeeded in tapping it thanks to new technology. The cost to drill for shale oil was too high in the years immediately following the discovery.

What happens next?

JAPEX said it will analyze the ingredients of the extracted oil and examine the profitability and amount of shale oil that can be extracted. This will take a few months. The company will later try horizontal drilling along the shale layer to make space for oil to come out. It will also conduct fracking and other methods to effectively extract shale oil.

According to Japan Oil, Gas and Metals National Corp. (JOGMEC), there are two ways to extract shale oil — acid treatment, or pumping acid into an oil reservoir, and fracking, or hydraulic fracturing, in which water, sand and chemicals are injected into a seam at high pressure.

JAPEX will conduct similar tests in two other oil and gas fields in Akita Prefecture.

How much shale oil is there in Akita Prefecture?

The Ayukawa field is believed to hold 5 million barrels — enough, when refined, to run Japan for 1½ days. A further 100 million barrels are estimated to be buried in other areas in the prefecture, or enough for 30 days’ worth of petroleum.

Can Japan’s shale oil be commercialized?

JAPEX will have to analyze the oil to make this determination.

Although the deposits are believed small and not expected to contribute greatly to the nation’s oil production, experts see this as a good opportunity for Japan to develop its own technology for mining shale oil.

“It’s true the amount of shale oil in Japan is limited, so it’s less likely to directly contribute to the needs of oil consumption. But this may become a chance for Japan to develop technology and provide it to other countries,” said Mitsuo Fujiyama, a senior research analyst at Japan Research Institute who specializes in macroeconomics and the energy market.

Hiroshi Hamasaki, chief researcher of Fujitsu Research Institute and an expert on energy and environmental policy, agrees this may give Japan the opportunity to sell its extraction knowhow, especially around Asia.

He also said development of shale oil production technology can have a positive influence on the negotiation of natural resources prices. “At the moment, (oil-producing countries) are charging Japan high prices because they know we really depend on them,” Hamasaki said.

Will shale oil be beneficial to Akita’s economy?

The prefectural government and local business circles hope so, but it is still uncertain.

“It is good news that a new energy resource may be exploited,” said Makoto Hasebe, mayor of Yurihonjo, where the Ayukawa oil and gas is located. But local government officials declined to predict whether the field will become commercially viable.

Is extracting shale oil environmentally unfriendly?

Some people say fracking for shale oil and shale gas is dangerous and polluting.

In 2011, the U.S. Environmental Protection Agency announced that fracking may be polluting groundwater. Production of shale gas and oil has been booming in the United States since the 2000s. The EPA announcement said compounds likely to be associated with fracking chemicals were detected in the groundwater in a small community in Wyoming. This is the first U.S. government finding that links fracking and water contamination.

The EPA retested the samples this year due to criticism of its methods by a company leasing the gas field in Wyoming, but the agency announced last Thursday that the latest results show pollutants were consistent with those in the previous test.

Fracking remains contentious in the U.S. and the energy industry has blasted the Hollywood film “Promised Land” starring Matt Damon as a gas-company salesman, believing it casts fracking in a negative light. The movie has yet to be globally released.

What other natural energy resources does Japan possess?

The seabed off Japan is believed to hold abundant deposits of methane hydrate, or “burning ice.” The trade ministry estimates that there is 1.1 trillion cu. meters of methane hydrate in the seabed between Shizuoka and Wakayama prefectures, roughly equal to 11 years of Japan’s liquefied natural gas imports.

It is also believed that methane hydrate exists off Niigata Prefecture, although the amount remains a mystery.

“It may not be enough for export, but it will be a good natural resource to consume domestically if production succeeds,” analyst Fujiyama said.

However, both Fujiyama and Hamasaki said it will take at least another 10 years to be able to use the natural gas trapped deep under the sea.

JOGMEC began conducting a test to extract methane hydrate in February off Aichi Prefecture, with the aim of commercializing it in fiscal 2018.

The Weekly FYI appears Tuesdays. Readers are encouraged to send ideas, questions and opinions to hodobu@japantimes.co.jp