The end of the era of Persic Gulf is coming

Publicado: septiembre 26, 2013 en Economia, Empresa, Gestión, Innovación, Política, Responsabilidad, Sociedad, Tecnología
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The end this era is coming, and I am not talking about the petrol reserves getting finished in the short or medium term, but about the rise of other extracting techniques, which are being developed very quickly and for sure will substantially change the game. In particular, I am talking about fracking.

What is fracking?

Fracking (or Hydraulic fracturing) is a technique in which water is mixed with sand and chemicals, and the mixture is injected at high pressure into a wellbore of about 2,500 meter deep. This creates small fractures (typically less than 1mm), which allows the extraction of some gas that would be inaccessible without this technique. To get an idea of the dimension of this process, in every excavation work an amount between 4 and 28 million liters of water is required.

You can see the extraction process in this link.

Is it a new technology?

No, it is not a new technology. In fact, it has been used in the United States during more than the last 40 years. But it is true that in the recent years there has been a big step forward, due to technologic advances and the increase of the price of energy. The popularization of fracking has pressured the natural gas price to go down significantly, as it is shown in the following chart.

Natural gas price evolution

Source: http://www.gasinfocus.com/en/indicator/evolution-of-the-prices-of-natural-gas-in-the-main-market-zones/

Where are the potential fracking extraction points located?

As it is shown in the map below, and in contrast with petrol, there is natural gas extractible through fracking in several regions of the world. The most important reserves are located in the United States, Canada, Argentina, Russia and China. In total, the Energy Information Administration (EIA) estimates that the new accessible gas will increase by a 40% the global reserves of natural gas.

map-shale-oil-gas-deposits

What impact is fracking making? Are we in front of the end of the OPEC supremacy?

In the United States the growth of the use of this technique is exponential. According to Adam Sieminski, director of EIA, in 2000 less than 2% of the gas production in the US was extracted using fracking. Currently is one third of the total production, and it is expected than in 2040 it will be 50%. A fracking fever has started to extend all over the world, as many countries are currently estimating the potential resources.

Indeed, if extraction keeps at the expected pace, the United States will become a net energy exporter. This would mean that OPEC would be still important but not a dominant player anymore, which would imply many economic, political and geostrategic unpredictable consequences.

Is it gold, all that glitters?

Definitely not. Fracking has a lot of advantages, as we have said, but it also has a major disadvantage. It pollutes the underground and aquifers, which means that it pollutes tap water. There is no doubt then that it is dangerous for public health.

In fact, a report issued in June 2011 by the Environment, Public health and Food safety commission of the European Parliament concludes that hydraulic fracture “pollutes the atmosphere and the underground water, due to gas leaks during the extraction and due to the use of more than 600 chemical products”. However, as to now there is no specific regulation at the level of European Union. The reasons are that law is one step behind human action and I have the impression there are lobbies making pressure against it.

Due to all that, in the last years many groups against fracking have arisen. One of the leaders is the documentary producer Josh Fox, who based on the documentary Gasland has rung the bells to many people regarding the danger of fracking. In it one can see breathtaking images, as people who live near the wells are seeing that since the installation of these wells the tap water comes out fizzy, or other more extreme cases where when approaching a lighter on the tap water, the water lights up on fire due the gas concentration.

water on fire

According to the experts, a good energy policy is the one which is balanced between economy, energy (safety of supply) and ecology. In this case my opinion is that fracking is very well positioned in economy and energy – because production costs are not high and the amounts of reserves are considerable-, but not in ecology. Indeed, as mentioned before there are several signs and evidence that it implies a risk to public health. Therefore, my opinion is that before excavations should stop until the effects on the underground and on the public health are deeply analyzed. And once analyzed, more money should be invested to improve the technology, which would reduce the environmental impact.

Naujip

comentarios
  1. knowthing dice:

    Are you for or against fracking? Do you think it the short or mid term we will see the end of the supremacy of OPEC?

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