The government has deferred the auction of shale gas blocks for exploration by a year as the environment ministry has raised questions about the safety of the methods used in extracting this energy source that could meet India’s fast growing energy needs.
The petroleum ministry, which earlier said it would auction shale gas blocks this year, will now make the offer only next year as it wants to comprehensively address environment concerns over the excessive use of water, pumping of chemicals into the earth and the larger number of wells needed for shale gas exploration.
Besides, the petroleum ministry does not want a situation, where public sector companies like ONGC and Oil India are forced to abandon shale gas exploration due to its environment impact after buying expensive technology from service providers like Halliburton and Schlumberger. The environment ministry has asked for more information about the proposed shale exploration from the petroleum ministry, said a person familiar with the development.
According to Schlumberger Limited, a global leader in oilfield services, which carried out a pilot project for ONGC in the Damodar Valley basin, has made an initial gas-in-place estimate of 300-2100 trillion cubic feet (TCF) in Indian shale gas basins. This is up to 300 times larger than Reliance Industries operated gas field in the Krishna Godavari basin (D6). But unlike conventional oil exploration, shale gas exploration is continuously mobile and moves from one spot to another, requiring more land for exploration.
Besides, shale exploration involves pumping chemicals into rocks with water. This could eat into the amount of water available for human consumption, besides contaminating ground water. As per the government’s assessment, one shale gas well has to be drilled in every five acre and each such well would require two million gallons of water to pump gas out. This requirement could exhaust the entire sweet water in the Cambay basin in Gujarat, that is identified for offering to explorers. Assam, another shale gas reserve in the country, is a densely populated area. The petroleum ministry wants to have an understanding with all the stake holders on the issue of acquiring land in such areas for shale exploration.
Shale gas has changed the energy landscape of the US, where it accounts for 17% of the total natural gas production. Commercial success in shale gas is now limited to only the US and Canada. India now imports 7.5 million metric tonne a year of liquified natural gas.