Going for Shale Oil and Gas in Algeria

Going for Shale Oil and Gas in Algeria

The Prime Minister in a statement on October 1st, 2017 to the National Assembly has indicated that going for Shale Oil and Gas in Algeria is an option for the immediate future. 

Opportunities and Risks of fracking 

I remember that under my supervision, a study to which participated international experts with decades of experience in the field of energy, resulted in a report of 620 pages entitled “Oil and Shale Gas: Opportunities and Risks”.  It has been handed over to the Prime Minister of the time on February 25, 2015. It is a report meant to be as objective as practicable, measured with analyses and proposals of all the then on-going trends. In the opinion of most of the involved experts, energy being at the heart of national security, it is an opportunity for Algeria, which must first assess its potential, and analyze all risks and profitability at term; the strategic objective would be to move towards a well-balanced energy Mix. These experts, noting that this sensitive issue requires specialized knowledge and in any case poses a social problem that would require good communication with the whole society. To avoid disturbing the management of SONATRACH, the state oil company as a strategic commercial company, the experts wanted that its leaders avoid exposing themselves to debates, and leave it to the Department of Energy that is politically empowered to present its arguments. As such, the experts have called for a new independent institution, not from a Ministerial Department but rather to be under either the President of the Republic or the Prime Minister and to involve civil societies of all each region, independent experts and representatives of the Department of Energy and other government departments, working closely with the institutions. Dialogue with the affected populations is vital.

Nature of Shale Gas

Unconventional Oil and Gas is contained in very compact and very waterproof, clayey sedimentary underground rocks containing at least 5 to 10% of organic matter.

Why the move towards Shale Gas?

Oil and Gas are the backbone of the Algerian economy. They have allowed the State to build foreign exchange reserves although down from $194 billion, to less than $97 billion at the end of 2017, allowed a revenue to SONATRACH of $28 billion in 2016 for an outflow of $60 billion and between $55 / 60 billion by end of 2017. According to SONATRACH’s CEO by end of 2017 it could be $31 billion. This has allowed over the years 2000 through 2016, an unprecedented public spending estimated between $950 / 1000 billion for an average growth rate not exceeding 3%.

Our widely media published calculations as of Customs statistics therefore official, of a year-on-year basis, show that between 2000 and 2016 currencies outflows for goods imports have been about $520 billion ($560 billion to July 2017 according to some sources), and $120 to 140 for services often forgotten in official statements (10/11 billion Dollars a year between 2010 and 2016) to which legal capital transfer of more than $730 billion have to be added, for an inflow of foreign exchange of about $850 billion, the difference being the currency reserves that stood on December 12, 2016 at $114 billion. The Algerian economy being a rentier economy largely based on crude oil export and a diversified industry that is embryonic with 70 to 75% of all household and public and private companies (with an integration rate not exceeding 15%) needs are sourced from overseas.

All these statistics could, however, hide the reality on the ground. That of apparently controlled unemployment (10%), of the predominating unproductive administrative jobs in the real sphere and more than 50% of the active population in the informal sphere according to the Government report of the National Statistic Office (2012).

Also, the Government has recently ruled that Algeria would be a net importer of oil in less than 10 years and in 20 years for conventional gas with domestic consumption tripling by 2030 and quadrupling by 2040, according to the Energy Minister. In case of undiscovered substantial and above all profitable according to the international price vector, Algeria could start importing oil from 2025 and gas from 2030 to only meet local demand.

Could the solution therefore be in Shale Gas?

And, considering both exports and a strong domestic consumption due to the low price, as per the on-going policy of fuels and energy subsidies and with the gas for instance sold to SONELGAZ, a state power utility provider between the sixth and the tenth of the international price; this rate varying according to the fluctuations in international prices, largely influenced by the US Shale Gas, at currently between three and four Dollar a MBTU. Financing needs of SONELGAZ according to the CEO statements would by end of September 2017 be $30 billion per year or $150 billion for the next five years not counting the financing needs of SONATRACH itself as per the drop from $100 billion to $70 billion for the same period.

Where then to find this capital money of about $45 billion per year with 70% in hard currency, the Dinar part contributing just under 30%, and the share of payroll in Dinar in value added is relatively low, for these two companies and all their subcontractors are dependent of imports paid in large part in hard currency and revenues between 2017-2020 may not exceed $35 billion if the price of a barrel of oil is around $55. For SONELGAZ, this amount takes into account the newly decided upon additional capacity of electricity plants. Indeed, following the increasingly recurring power cuts, it was decided to plan to produce additional MW of electricity by 2017.

With this increase in domestic consumption, the fact of the decision would not change domestic prices and there is a risk to go to more than 70/75 billion cubic meters of gas by 2030 for   domestic consumption. Indeed, if one extrapolates for exports to be 85 billion cubic meters (m³) of gas and 70 billion cubic m³ of gas of for domestic consumption, there should be more than 155 to 160 billion m³ gas assuming significant investments in this area of business. Here costs must seriously be taken into account; market competition, substitutable energy and major global energy mutations are and will be there.

The interest of the Algerian authorities for non-conventional hydrocarbons would be to foresee the need to ensure the transition energy of the country but to also be guided always by increasing revenue so as to avoid any social turmoil. But is it not the focus for Algeria to go towards an energy Mix combining the traditional gas/oil, Shale oil/gas and renewable energy in which Algeria has significant potential.

What profitability for Algeria?

The Algerian group SONATRACH had already drilled its first Shale Gas wells in the basin of Ahnet, located south of In Salah, which was to be followed by others. To develop these reserves, it (SONATRACH) should form partnerships with international groups including Shell, Exxon Mobil, Total, Talisman, INIE etc. According to recent field exploration and studies undertaken by this group during the second quarter of 2012 in an area of 180,000 km², it was reported that a potential of Shale Gas exceeding 19,800 billion m³ with a recovery rate of 25% is there.

But did Algeria establish a reliable geological map confirming these findings?

As for conventional gas, thousands of deposits but not profitable financially can also be exploited. Economic and hence profitability calculation of the reserves, is function of the growth of the world economy and its model of consumption, domestic consumption, the costs of extraction and transport, competitors and substitutable energy.

According to recent estimates by the International Energy Agency (IEA), a new assessment holds that technically extractable gas reserves in the world would be up by 40% and would bring them to 640,000 billion m³, which is more triple of the world reserves of conventional gas of today.

Since the revolution of unconventional gas that will make of the USA the world’s largest exporter before Russia by 2020 knowing that Russia holds a third of the world’s reserves of conventional gas (more than 33%), and is the main competitor of SONATRACH despite the recent freezing of South Stream supplying 30% to the European market.

Other competitors like Iran (15 / 20% of the world reserves) potential competitor since the lifting of the embargo, and Qatar (10 / 15%), besides China which holds first global gas reserves of Shale, that combined with its investments in renewable energy will make it a global leader.  Mozambique that could become the second or third holder of gas reserves, the discovery of more than 20,000 billion cubic m³ in Eastern Mediterranean and the return of Iraq and Libya’s production, the competition is likely to be even tougher for Algeria. As this market is segmented like conventional gas where the pipes represent about 70% of the global gas marketing, competition in Asia of Russian and Qatari plans, arise the whole profitability of the Algerian LNG with its weak capacities in addition to the significant investments that are required in transportation. As it will need to amortize the Transmed, Medgaz, project Galsi via Sardinia and the Nigal (Nigeria – Europe via Algeria) including increasing costs of the delays by more than 50% compared to the initial cost, that are still in gestation.

What is in it for Algeria, knowing that gas accounts for about a third of the revenue of SONATRACH?

However, between 2017-2020-2025, beside the USA exporting to Europe, many contracts in the medium term would have expired and according to credible reports, the European partners will be requiring a revision to the price of conventional gas. This can influence the price of assignment of the unconventional gas.

One must also take account of the dispersion of the deposits whose life unlike conventional gas is limited, according to the intensity of extraction that rarely go beyond 5 years of fracking. The United States bore approximately 2000 wells a year in a relatively same geological area and 500 to 600 wells can give 28 billion m³ of gas. However, in Algeria, even in the traditional gas/oil extraction, it never went more than 200 wells. According to the head of Department of analysis of the basins of SONATRACH, during an international workshop on Shale Gas in 2014, the production costs of a drill in Algeria varied between $10 and 15 million, whereas in the USA the average cost it was between $5 million to 7 million. Also marketing for Algeria could only be undertaken, according to the former Minister of energy currently Minister of industry not earlier than until 2020/2025, assuming a perfect mastery of technology to reduce costs. Moreover, in addition to the mastery of technology, which should be included to the cost notably through the purchase of the required know-how, the advantage of some countries such as the USA is the availability of a network of transport of gas virtually throughout the country and more of the fact that the deposits are not deeply set.

What will all additional costs of all pipelining and related infrastructure be for Algeria?

Profitability depends on the future evolution of the transfer price of gas to the international market which is currently low on the open market by the unconventional gas revolution. Operations management is complex, drilling losing 80% of productivity at the end of 5 years, unless new technologies are brought to about. Besides the technological expertise, the issue of cost-effectiveness refers to the global energy, the energy consumption map of the world by 2030/2040 whilst taking account of the costs of renewable energy which can decrease if there is massive investment and the willingness to get out of nuclear power, the dynamics of the emerging big energy consumers, if they maintain the current model and this is not obvious, as well as China, France and the UK taking the initiative to reduce all vehicles running on diesel and petrol/gasoline as from 2020.

Will the reformulation of the hydrocarbons law be able to revive exploration on operational bases? Unless, and as it happens for most of public companies structurally to be loss-making, the Treasury bears additional costs of shale gas that 70% of the companies returned to the starting square. Thus, arises the opportunity to do away with the restrictive rule of 49 / 51% hence to amend the law on hydrocarbons including the taxation.

Social dialogue and new model of energy consumption

Algeria must think of a new model of energy consumption under the auspices of the National Council of Energy which must be reactivated, SONATRACH being a commercial enterprise (1). About Shale Oil and Gas, it must meet three criteria: protection of the environment, avoid any pollution of the water, the transfer of the exploitation of the Shale Oil and Gas price must cover the costs with a margin of reasonable profit.

For Algeria, it is however the protection of the environment that matters the most, hence the importance of the location of training centres and recruiting in priority those population from the South which must be involved for any possible operation of the kind in the first place.

We will get back for more on this vey aspect of the Shale Gas exploration in the near future.

Algeria: distinguishing economic time from political time

Algeria: distinguishing economic time from political time

The new Law of Hydrocarbons in Algeria: distinguishing economic time from political time was enacted despite concurrent street demonstrations against it. It was debated at length by Professor Abderrahmane MEBTOUL, International Expert, in interviews to Radio Algeria International – Paris France on 04/11/2019, to Algerian Radio Channel-3 and to Radio France International on 05/11/2019. Here are some excerpts of each.

Algeria: distinguishing economic time from political time

Question – 1. Will Algeria with high domestic consumption be able to meet its international commitments?

Indeed, if we take natural gas, domestic consumption is likely to exceed 60 billion cubic meters of gas by 2030 and 100 billion cubic meters of gas between 2035/2040, the Ministry of Energy has announced the depletion of reserves would be at about 60%. An urgent need to review the current energy policy and move towards a clean energy transition policy that revolves around four axes, to meet its international commitments.

-First: an energy efficiency policy (energy sobriety) that affects all sectors and households by reviewing construction methods, cars/trucks fleet consumption, energy-intensive industrial units; the simple referring to a policy of targeted subsidies, but which do not penalize the disadvantaged, existing new technologies that save about 30% of energy consumption.

-Secondly: the development of renewable energies whose cost has fallen by more than 50% for both thermal and photovoltaics, where Algeria has significant potential.

-Thirdly: to continue to invest in upstream, which can make discoveries as part of a win-win partnership, SONATRACH with lower prices and physical production, which has dropped significantly since 2008, technological or financial capabilities, but no longer have to be deluded by large deposits like Hassi-Messaoud or Hassi-Ramel.

-Fourthly: avoid precipitation whilst developing SHALE oil and gas, Algeria having the third world reservoir, only by 2025, as I recommended to the authorities of the country, through this study with experts pending new technologies that replace hydraulic fracturing, saving freshwater and injecting more than 90% of the chemicals into wells, thus protecting the environment, but requiring in-depth social dialogue.

To answer your question directly, I highlighted the points at the 5 + 5 Meeting of Algeria, Morocco, Tunisia, Mauritania, Libya with France, Italy, Spain, Portugal, Malta in Marseille in June 2019. I had the honour of chairing the Energy Transition’s workshop in which the subject of a clean energy transition policy, and the modification by Algeria, a major energy player in the Mediterranean basin, as it has always done, to meet its international commitments by 2030.

Question – 2. Will the amendment of this law attract foreign investors?

Depending on several factors, such as:

-First: the revision of this law as I have pointed out since its enactment at the beginning of 2013 is unsuited to the current situation, in particular the tax component and the nature of the contracts in which Sonatrach supports the majority of the financing, the world having evolved from where the importance of its revision to take account of new global energy changes.

-Secondly: however, a law is only a legal instrument, being a necessary but sufficient condition of the attractiveness of foreign investment, where any company attracted by direct profit rate, and also as long as the level of foreign exchange reserves is high. Depending on the business environment where Algeria was in the latest report of the World Bank of 2019 was very poorly classified because of its paralyzing bureaucracy, corruption, financial and unsuitable socio-educational systems.

-Thirdly: the political climate is decisive, and according to international observers no serious investor would engage in Algeria without the resolution of the political crisis, political stability especially in a country like Algeria, where politics and economics are intertwined, being a determining factor in the attractiveness of a foreign investment.

-Fourthly: as I have just pointed out recently, to your colleagues on France 24 television, and several Algerian websites and daily newspapers, it would be desirable to postpone the adoption of this law after the presidential election. Only a president and a legitimate government can secure the future of the country where this resource, directly and indirectly, provides about 98% of the country’s foreign exchange resources. Some company executives fear that a new president would challenge this law, which would be passed by a transitional government, responsible for current affairs, while legal stability is a golden rule for all investor.

-Fifth: to answer this second question directly, the positive impact of this law would depend on the future global energy map, the entry of new producers and the sale price on the world market both of oil and gas returning at the cost of production in Algeria therefore to a new strategic management of SONATRACH and the impacts would not be felt only in three to four years, subject to the lifting of environmental constraints. Why this haste, which risks further sharpening social tensions in the run-up to the presidential election, thus possibly harming the voting turnout?


Geostrategic Gas Tensions in the Mediterranean

Geostrategic Gas Tensions in the Mediterranean

At a time, when important issues are being raised and out of the ordinary tensions are taking place concerning gas fields, Algeria faces geostrategic gas tensions in the Mediterranean.  It is, in particular, the tensions between Greece and Turkey, challenging it where its primary gas market is, in Europe, and whose hydrocarbons with derivatives provide 98% of foreign exchange revenues in 2019, where the price of gas disposal has fallen by more than 75% in 10 years and providing 33% of its SONATRACH’s revenues. Here is an analysis of options for this unprecedented east Mediterranean situation as seen from Algeria.

Between 2018/2019, according to the IEA we have the following distribution 33.1% of oil, 27.0% coal, 24.2% natural gas, 4.3% nuclear and 11.5% renewable energy (hydropower 6.5%, wind 2.2%, biomass and geothermal 1.0%, solar 1.1%, agrofuels 0.7%). 

Natural gas pockets lie beneath the Earth’s surface and consist mainly of methane and other hydrocarbons. It is mainly used for electricity generation, heating and as cooking. Gas can also be used for air conditioning, lighting and as an alternative fuel for vehicles. It is considered one of the cleanest fossil fuels because it emits less carbon (about 50% less than coal) and other pollutants such as sulphur oxides and nitrogen. We have two types of natural gas on the market: natural gas and liquefied natural gas. 

Natural gas is derived from fossil fuels and is made up of decomposing organic matter that has been released into the soil for millions of years and is routed through pipes. We have liquefied natural gas as far as it is a natural gas that has been changed to a liquid state so that it can be transported and stored more easily. Because natural gas deposits are often far removed from many consumers of this energy, transporting it in a gaseous state is risky and expensive.

Also and by cooling it, it is possible to transform it into liquid natural gas, There are two main markets on which the world’s natural gas is traded. The most important is the NYMEX or New York Mercantile Exchange located in the United States, and the second, the NBP or National Balancing Point of the International Petroleum Exchange located in London. There are other smaller markets such as the FTT in the Netherlands or The Zeebrugge in Belgium. Between 2018/2019, before the coronavirus outbreak, according to Cedigaz, demand increased, strengthening its place in the energy mix. In 2018, international LNG represented a provisionally estimated volume of 311 Mt, according to Cedigaz, up 8.5% from 2017. LNG now accounts for more than a third of gas trade, with growth in LNG imports concentrated in Northeast Asia (China and South Korea), where gas plays an increased role in electricity generation and heating. China contributes the most to the growth in global LNG demand, with more than 60% of the total increase in trade.

Proven world reserves on a total of 197.394 billion cubic meters of gas (data from 2018/2019) we have in descending order: Russia 47,800 billion cubic meters, Iran 33,500, Qatar 24,300, USA 8,714, Saudi Arabia 8,602, Turkmenistan 6061, Venezuela 5702, Nigeria 5,284, and China 5,194 and for Algeria between 2500 and 3000 according to the statement of the current Minister of Energy before his appointment and the communiqué of the Council of Ministers of 2014, the data of 4500 being those of BP of the years 2000. The top 10 countries producing natural gas in descending order are. Russia alone accounts for 20% of world natural gas production. It is also the largest exporter, second with the shale gas revolution becoming an exporter in Europe, the United States of America, followed by Canada (third place) and Qatar fourth, with Iran downgraded following US sanctions, followed by Norway, China, Saudi Arabia, and Algeria, which ranked ninth. These data should be interpreted with caution because thousands of deposits can be discovered, but not profitable according to financial standards depending on operating costs and the evolution of the international price itself depending on the demand and competition of substitutable energies As for some experts who speak of an OPEC gas market in the image of OPEC oil, it should be stressed that the gas market is not in this month of August 2020, a global market  but a market segmented by geographical areas  while the oil market is homogeneous, due to the preponderance of pipelines, being impossible to meet the same criteria, the solution being cooperation within the FPEG which consists of 11 member countries (5 in Africa (Algeria , Egypt, Equatorial Guinea, Libya, Nigeria) – 2 in the Middle East (Iran, Qatar);  3 in South America (Bolivia, Trinidad and Tobago, Venezuela) and Russia, 9 non-member countries with observer status: Angola, Azerbaijan, the United Arab Emirates, Iraq, Kazakhstan, Malaysia, Norway, Oman and Peru, the United States, one of the world’s leading gas producers, are not part of the FPEG.. To one day reach a gas market that meets oil market standards (daily listing), the share of LNG would have to increase from 30% to more than 80%. Until then, because investments are hefty, everything will depend on the evolution between 2020/2030/2040, on-demand for LNG which will depend on the new global energy consumption model that is moving towards the digital and energy transition with an increase in the share of renewables, energy efficiency and between 2030/2040 hydrogen which risks degrading a large part of the transition energy.

What about the current tensions in the eastern Mediterranean regarding the energy sector which is not immune to OPEC’s action, but indirectly affecting the price of energy and the market share of Algeria towards Europe its principal customer, recalling that there is a gas organisation independent of that of OPEC. 

 A friend, the polytechnician Jean Pierre Hauet of KP Intelligence, France rightly notes that the energy scene comes alive in the Mediterranean with at least two significant fields of manoeuvring which it is interesting to try to understand the ins and outs that explain the current tensions, especially in the eastern Mediterranean. The first theatre is that of renewable energy (wind, concentrated solar, photovoltaic) which has been characterised by the launch of major initiatives based on the idea that technical progress in direct current transmission lines would allow taking advantage of the complementarity between the electricity needs of the countries of the north and the availability of space and sun of the countries of the South. At the time, we were talking about 400 million euros of investments and the satisfaction of 15% of Europe’s electricity needs. Today, the Desertec project is instead at half-mast, due in particular to the withdrawal of major industrial players, Siemens and Bosch, and the consummate disagreement between the Desertec Foundation and its industrial arm the Desertec Industrial Initiative (Dii). Dii continues its ambitions to integrate European, North African and Middle Eastern networks, while the Desertec Foundation now seems to favour bilateral initiatives in Cameroon, Senegal and Saudi Arabia. The second theatre of operations is recent: it relates to the discovery from 2009 of deep offshore gas resources in the eastern Mediterranean, which explains the current tensions. Large companies that used to operate other more accessible, profitable fields or near facilities nearby, on land, are now turning to the eastern Mediterranean, off Egypt, Israel, Lebanon, Cyprus and Turkey, all countries that do not necessarily have good neighbourly relations. Because several gas deposits have been discovered off the coast of Egypt, Israel, Lebanon or Cyprus, at the heart of the so-called Levantine basin, it is estimated by the US Geological Survey at 3,452 billion cubic meters (m3).  “For the producing or future producing coastal states, this gas resource offers the opportunity to achieve energy independence and a way to bail out their economy through potential exports” according to the Mediterranean Foundation for Strategic Studies in a well-documented report. That is why Turkey is conducting research. Even if Greece and part of the international community accuse it of having entered the Greek maritime space, international law is unclear in this situation which does not delineate borders and geographical boundaries. Gas resources can be found on or offshore limits of a country or in either transboundary or not clearly defined boundaries reservoirs, and the Turkish initiative could be the beginning of a long series of tensions that could transform regional balances. Because geological formations do not know the political borders, oil and gas companies have explored the marine subsea soils of neighbouring countries. This was followed by the uncovering of the Leviathan field (2010) also off the coast of Israel, Zohr (2015) in Egyptian waters, then Aphrodite (2012), Calypso (2018) and Glaucus (2019) around Cyprus. Exploration of Lebanese and Greek waters is not advanced. Athens has already allocated parcels to ExxonMobil, Spain’s Repsol or Total. On February 19, 2018, a historic $15 billion contract between Egypt and Israel provided for the supply of natural gas from the Tamar and Leviathan offshore reservoirs to Egypt, according to a report by the Mediterranean Foundation for Strategic Studies (FMEN). To ease tensions, although the countries of the Mediterranean all face the problem of energy security, it is above all a question of strengthening cooperation especially in the energy field, which can represent a vital link between the north and the South of the Mediterranean.

What is the case for Algeria where according to SONATRACH’s balance sheet in 2019, it makes up about 33% of its revenues, to which must be deducted the costs and the share of partners dependent on natural gas in order to have the net profit? The structure between natural gas exports through the two major Medgaz pipelines via Spain capacity, of 8 billion cubic meters gas and Transmed via Italy between 35/40 billion cubic meters of gas, currently under capacity, represents about 75% of the total towards its primary market Europe. LNG about 25% that provides it with more flexibility, Algeria is strongly competed against between 2020/2025 by the American, Russian, Qatari LNG. The latter has installed large capacity two to three times that of Algeria and for the gas piped by Russia the North Stream (55 billion cubic meters of capacity and the South Stream (capacity of 63 billion cubic meters gas), not forgetting as previously highlighted the discoveries in the Mediterranean. Nigeria and Mozambique are important producers with the latter country having the largest reserves in East African countries, with nearly 5 trillion cubic meters, on two offshore blocks in the province of Cabo Delgado in the far north of the country. By 2025/2030, Mozambique is likely to become the fourth-largest gas exporter in the world behind the USA, Qatar and Australia. In order to export to Asia, it will have to bypass the entire cornice of Africa posing the problem of profitability, in addition to the operating costs is added an exorbitant transport cost, unable to compete with Russia with the Siberian China gas pipeline, called “Power of Siberia”, more than 2000 km at the Chinese border, transporting 38 billion cubic meters of Russian gas to China each year by 2024/2025, a contract, estimated at more than 400 billion dollars over 30 years, signed by Gazprom and the Chinese giant CNPC, signed by Gazprom and the Chinese giant CNPC. Not to mention Iran and Qatar close to Asia. In the end, everything will depend for Algeria to enter the global market of cost requiring new strategic management of Sonatrach whose operating account for several decades depends fundamentally on external factors beyond its internal management, the international vector price, which led the president of the republic to demand an audit of this company. As for the world price between 2007 and September 2020, it fell by more than 75%, much more than for the oil. It has gone from 15/16 dollars for the GLN to 4/5 dollars and $9/10 for natural gas (GN). It has fluctuated between 2019/2020 between $1.7 and $2.5 per MBTU, in the open market. And recently between January 2020 and September 2020, we will have to take into account the dollar/euro rating which has depreciated by more than 11%, due to the uncertainties of the US economy and especially the swelling of the budget deficit bringing it back to the constant price thus having to draw the currency balance  

In short, energy is at the heart of the sovereignty of states and their security policies. The world is moving during 2020 through 2030, inevitably towards the digital and energy transition with a new model of energy consumption and knowledge imposing on our leaders a cultural renewal far from the material mentality of the past that cannot lead the country with expensive projects, uncertain profitability to the impasse.  Economic dynamics will alter global power relations and affect political recompositions within and regional spaces, hence the importance of understanding geostrategic energy issues and appropriate solutions, far from unrealistic discourses.


Fracking Boom in US and Canada Largely to Blame

Fracking Boom in US and Canada Largely to Blame

Other countries such as Algeria, people have objected quite strongly at times, to anything to do with fracking out fossil fuel from the ground using water from its invaluable phreatic water. More recently, it is found as elaborated in Fracking Boom in US and Canada Largely to Blame for ‘Massive’ Rise of Global Methane Levels: Study, that it is no more a question of water use only, but as put mildly in Common Dreams, in this article below as a matter far more lethal for life on earth.

While the rise of methane in the Earth’s atmosphere over the past decade has been “globally significant,” quick action to end fracking would have a rapid, positive impact on the environment by Julia Conley, Staff writer.

A new study out of Cornell University suggests that fracking in the U.S. and Canada over the past decade is largely to blame for the rise of methane in the Earth’s atmosphere. (Photo: Jeff Wallace/flickr/cc)

New research by a scientist at Cornell University warns that the fracking boom in the U.S. and Canada over the past decade is largely to blame for a large rise in methane in the Earth’s atmosphere—and that reducing emissions of the extremely potent greenhouse gas is crucial to help stem the international climate crisis.

Professor Robert Howarth examined hydraulic fracturing, or fracking, over the past several decades, noting the fracking boom that has taken place since the first years of the 21st century. Between 2005 and 2015, fracking went from producing 31 billion cubic meters of shale gas per year to producing 435 billion cubic meters.

Nearly 90 per cent of that fracking took place in the U.S., while about 10 per cent was done in Canada.

The fracking method was first used by oil and gas companies in 1949, but Howarth concluded that fracking done in the past decade has particularly contributed to the amount of methane in the atmosphere. As Kashmira Gander wrote at Newsweek:

While methane released in the late 20th century was enriched with the carbon isotope 13C, Howarth highlights methane released in recent years features lower levels. That’s because the methane in shale gas has depleted levels of the isotope when compared with conventional natural gas or fossil fuels such as coal, he explained.

“The methane in shale gas is somewhat depleted in 13C relative to conventional natural gas,” Howarth wrote in the study, published Wednesday in the journal Biogeosciences. “Correcting earlier analyses for this difference, we conclude that shale-gas production in North America over the past decade may have contributed more than half of all of the increased emissions from fossil fuels globally and approximately one-third of the total increased emissions from all sources globally over the past decade.”

“The commercialization of shale gas and oil in the 21st century has dramatically increased global methane emissions,” he added.

Other scientists praised Howarth’s study on social media.

In addition to being the second-biggest contributor to the climate crisis after carbon dioxide, methane has been known to cause and exacerbate health issues for people who live in areas where large amounts of the gas is present in the environment.

Chest pains, bronchitis, emphysema, and asthma can all be caused or worsened by high levels of methane. The process of fracking has also been linked to pollution in drinking water.

The Trump administration has no plans to reduce the amount of fracking that is taking place in the U.S.—rather, President Donald Trump has moved to open up public lands to gas and oil companies looking to purchase leases for fracking.

Howarth urged fossil fuel companies—and the government agencies charged with regulating them—to reverse course, shift to a renewable energy economy, and “move as quickly as possible away from natural gas, reducing both carbon dioxide and methane emissions.”

Cutting emissions of methane promptly would have a positive impact on the atmosphere and could help to slow the climate crisis because the atmosphere reacts quickly to the addition and subtraction of the gas.    

“This recent increase in methane is massive. It’s globally significant. It’s contributed to some of the increase in global warming we’ve seen and shale gas is a major player,” Howarth said in a statement.

“If we can stop pouring methane into the atmosphere, it will dissipate,” he added. “It goes away pretty quickly, compared to carbon dioxide. It’s the low-hanging fruit to slow global warming.”