Green rules for shale gas explorers soon

Written by Gireesh Chandra Prasad | Gireesh Chandra Prasad | New Delhi | Updated: Sep 4 2010, 07:51am hrs
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The government will put in place a set of new environment protection guidelines as part of its proposed shale gas policy, which companies venturing into exploration of this new fuel source in India will have to compulsorily follow. The proposed guidelines are likely to force oil explorers to disclose the chemicals they use, which are increasingly being linked to groundwater contamination globally.

The idea is to adopt environment protection norms followed in countries where shale gas production has flourished, without going to the opposite extreme of overregulation that could push up costs and make shale gas an uneconomical source of energy, official sources told FE.

While definitive environmental norms for shale gas are being mulled, exploitation of this resource could also require a compatible land acquisition policy. Horizontal drilling is used for shale gas exploration, which requires large tracts of land. In countries like the US, the government acquires land for this purpose, but in India, even the proposed land acquisition bill speaks of limited government role in this regard.

Indias private energy companies like Reliance Industries are keen on shale gas and are going overseas for this potentially lucrative business, but they would need to be helped by the government if the deposits of this fuel along the Vindhya range are to be explored, informed sources said.

Incidents of mineral exploration and mining projects being hampered by environmental regulations the latest being Vedanta Resources bauxite mining venture in Orissa have indeed prompted the policymakers to take preemptive policies in shale gas.

PricewaterhouseCoopers associate director and energy expert Deepak Mahurkar said that a new set of environment obligations would not be alarming to the shale gas exploration and production industry because the hydrocarbons sector, per se, has high environment protection requirements. Oil and conventional gas too have them, Mahurkar said.

Ground water contamination and air pollution are globally considered as the environmental impact of shale gas exploration, which has forced many state authorities in the US to halt expansion of their shale exploration activities.

According to overseas reports, New York already has a moratorium in force on further expansion of shale exploration, while certain municipalities in Pennsylvania, Colorado, New Mexico, and Texas have passed resolutions to that effect but have not enforced them yet.

A government official said inputs and suggestions would be sought from Schlumberger, a New York-listed oil field services company which is doing a pilot study on Indias shale reserves for state-owned ONGC.

Hydraulic fracing, a way of creating fractures in underground shale formations with the help of fluids, is now evolving as a separate discipline in hydrocarbon drilling because of its possible environmental impact. Many explorers use diesel as a fracing fluid to extract the gas trapped in rock formations.

For shale gas exploration, we need to drill more holes per unit area than for any other hydrocarbon, which makes the process more complex. One view is that since shale gas is found much deeper than ground water levels, it may not possibly lead to contamination. We will, however, adopt the best international practices by way of caution, said a senior government official, who asked not to be named.

The US, which five years ago exempted hydraulic fracing from being regulated under its Safe Drinking Water Act, is now reviewing this decision in the wake of demand from environmentalists.

The petroleum ministry is now in touch with the US department of energy for co-operation in the field of shale gas exploration, as India seeks to step up its efforts to produce more energy from cleaner sources. Conventional energy companies too are entering the field. The largest Indian company Reliance Industries has already acquired 40% in Atlas Energys leasehold in a shale gas field in the US.