Insight
Caution urged for shale gas exploitation
Last Updated:2012-11-09 14:30 | CE.cn
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By Feng Lianyong


Shale Gas Revolution lead by the US arouses the global passion for exploration and exploitation of shale gas in recent years. The shale gas yield in the US was 137.8 billion m3 and 180 billion m3 respectively in 2010 and 2011, accounting for 23 and 24 percent respectively of the total gas yield in the US. Such a rapid increase of yield has led the shale gas begun to influence the energy structure in North America and even in the world.

 


A lot of people hope China can also initiate the Shale Gas Revolution like the US. It is a good hope, but firstly we must make a deep analysis: how large is the exploitation potential of the Chinese shale gas? How long can the exploitation of shale gas keep? Then we can answer the question whether we can initiate the Shale Gas Revolution.


Energy Information Administration of the US Department of Energy released a report in April 2011 that the recoverable shale gas reserves is 187 trillion m3 in the world, among of which the reserves in US is 24.4 trillion m3 (accounting for about 13 percent) and in China up to 36 trillion m3 (accounting for about 20 percent), ranking the first in the world. Ministry of Land and Resources of China released for the first time in March 2012 that the potential of shale gas geological resources is 134.42 trillion m3 in the land territory of China, among of which 25.08 trillion m3 can be recovered (excluding the shale gas in Qinghai-Tibet area).


By comparing with the above two official statistics, it is found that there is a large difference in the estimate of the recoverable shale gas reserves in China. However, the data released by MLR is only based on technical feasibility and does not take into consideration a series of restrictions like large consumption of water resources, environmental impact, population density and pipeline transport. Furthermore, the geological and exploiting conditions in China are not as favorable as in the US. During the real exploitation process, it should also take into consideration a lot of other restrictions besides the technical feasibility, so the resources which can be exploited and produced really are much less than the released data.


Compared with the regular oil and gas resources, there is a large difference in the exploiting methods of shale gas. With difficult in exploitation, it requires for high-pressure fracturing technology. With high risk, such a technology also requires for large amount of water consumption. According to the data, if high-pressure fracturing technology is applied, the water consumption for each gas well reaches 1 to 4 million gallon (3800 to 15,100 m3), 50 to 100 times of the one for a regular fracturing well. Moreover, 50 to 70 percent of water is purely wasted during such a process. The water consumption per well is equal to that of 5000 to 10,000 normal families in a month in China. Such huge water consumption is undoubtedly a deadly restriction for the dry shale gas area lack of water.


The fracturing fluid used during the shale gas exploitation cannot be ignored, either. Besides a large amount of sand and stone, the fracturing fluid used in each shale gas well also contains 200,000-litre acid liquor and chemical additive like bactericide, scale inhibitor, lubricant and surfactant. In addition, the flow back liquid contains formation water with highly dissolved solids. Improper treatment of the fracturing fluid when it flows back to the surface will seriously affect the surface source of drinking water. Furthermore, the fracturing fluid may contaminate the underground source of drinking water through channels like the induced geological fault and poorly-sealed bushing wall.


For large scale exploitation, it needs to arrange drilling wells densely and conduct a large amount of fracturing in the shale gas area, which means that a large area of land resources will be occupied. It will not only cause serious effect on the life of the local people, but also increase the exploitation cost substantially. Under such conditions, it is unknown whether the shale gas exploitation is still economical and feasible. Sichuan Basin, the most important shale gas area in China, is faced with two problems of water shortage and high population density.


The reason for the great success of the shale gas exploitation in the US is its advanced pipeline infrastructure. The length of the 210 main gas pipelines exceeds 480,000 km in the US. These pipelines can cover all main markets and shale gas areas and the production and sales is even more convenient in some production area in the northeast area of the US. In contrast, the situation in China is not so satisfactory. The length of gas pipeline in China in 2010 was only 36,000 km and it is expected to reach 10,000 km by the end of 2015. Such a status quo will affect directly the shale gas exploitation.


A series of restrictions remind us that there is a large difficult in the shale gas exploitation and the first place of the Chinese recoverable shale gas reserves in the world assessed by the US is only a number guess. There are huge gaps between China and the US both in technical and geological conditions. Meanwhile, a series of factors like high population density and poor pipeline infrastructure also restrict the shale gas exploitation. It may be thought that for the reserves and yield of shale gas, the surface factors dominate the underground factors and it should be discreet to initiate Shale Gas Revolution in China.


The writer is a professor from College of Business Administration of China University of Petroleum in Beijing

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