The petroleum industry has been on the constant search for new forms of energy resources to meet the ever growing global energy demand. One such discovery has been shale gas. It is not new to the industry as it was first extracted in 1821 in the United States. However, Shale production has not been a focus zone in the states until natural gas reserves started declining in the 1970s. Federal government’s price controls and waning gas reserves compelled the industry players to switch to alternate fuel sources. That was when the industry started investing heavily in shale gas extraction processes, particularly in the United States.

What is shale gas?

As per the Geological Society of the UK, Shale is a fine-grained sedimentary rock, formed over millions of years by the compaction of fine particles of mud. Organic matter can be trapped in the layers as they are compacted, and are gradually converted through heat and pressure into hydrocarbons (petroleum and natural gas).

However, the extraction of shale gas is quite challenging both in terms of economic viability and production technology. The industry has been facing stiff tasks in making commercialization of shale gas production a viable activity. Why it is so? To answer this, one needs to understand the basic difference between shale gas and natural gas.

Natural gas Vs shale gas

Conventional gas reservoirs are created when natural gas migrates toward the earth's surface from an organic-rich source formation into highly permeable reservoir rock, where it is trapped by an overlying layer of impermeable rock. In contrast, shale gas resources form within the organic-rich shale source rock. The low permeability of the shale greatly inhibits the gas from migrating to more permeable reservoir rocks. To further comprehend this, let us understand what is permeability? In the context of oil and gas industry, permeability is the rate at which oil can flow through porous rocks. This explains why natural gas has the nature to flow through rocks and come up to the surface and be deposited between the porous rocks as it is permeable. On the other hand shale gas formation is more static in nature and does not flow through rocks making its extraction a huge challenge. This means that shale gas production can only be economically viable through advanced drilling and production technologies such as horizontal drilling, hydraulic fracturing, etc., that are different from conventional oil extraction methods.

Is Shale Gas Losing Its Steam ?

Shale rocks are hidden treasure

If you lit up a piece of shale rock, especially the paper-thin pieces that flake off, the rock would catch fire before smoking out as it contains gas that fuels the flame. However, one would not be able to see the gas presence in the rock. This is a unique feature of shale gas. Another characteristic of shale gas is its low flowing impermeable nature.

Horizontal Drilling - A game changer

Is Shale Gas Losing Its Steam ?

There are two main types of drilling techniques employed in the extraction of shale gas. One of them is horizontal drilling, which is a technique of drilling a vertical well on the rock formation where the shale gas is trapped. Once the desired depth is achieved through vertical drilling, the drill bit is turned horizontally to access the trapped shale gas for easy and successful extraction. Drilling technology has vastly improved over time, and with the enhancements in use of sensors and global positioning technologies, multi directional drilling is more efficient and vibrant in terms of reaching more intricate parts of shale reserves. The other technique for extracting shale gas is fracking.

Hydraulic fracking for cracking the impermeable shale rocks

Hydraulic Fracking is also called fracking or hydro-fracking. It is a technique in which water, chemicals and sand are pumped into the well to tap the hydrocarbons trapped in shale formations. Through this process cracks or fractures are created in the shale formation rocks, which allow gas to flow from their shale reserves to the wellbore. It is important to know that when used in conjunction with horizontal drilling, hydraulic fracturing helps gas producers to extract shale gas at a reasonable cost. Without these techniques, natural gas does not flow to the well rapidly due to is impermeable nature and hence commercial quantities cannot be produced from shale.

As stated above, a lot of water as well as large quantities of sand is mixed and pumped into the earth at a very high pressure so that it can create cracks on the shale rocks. Often a small quantity of additive is also added to the mix. Taking a leaf from physics, the high pressure water creates multiple cracks in the impermeable rock formations through which sand moves through the passage. The sand is used as a proppant to prop the cracks from collapsing. This enables the trapped shale gas to escape through the wellbore. This whole process usually takes about 2 weeks of operations.

Why is fracking environmentalist’s nightmare?

While fracking is an effective technique to bring out shale gas, it has its own share of challenges. Firstly, since a mix of water, mud and chemical is injected into the shale rocks to create fractures, it exposes the ground water to pollution. This is of great concern for most of the countries when they permit shale gas extraction. For example, ground water resources cater for about 32% of the requirements in the UK. Hence, any contamination of groundwater with fracking liquids, methane, etc., would lead to potential imbalance in the otherwise healthy earth ecosystem. Secondly, water requirement for fracking is quite substantial which is can lead to water crisis on a continuous operation of fracking. Thirdly, the impact of sustained fracking could lead to a heavy seismic activity underneath which in the long run could lead to earthquakes.

Shale Economics – Losing its sheen in the downturn

Shale extraction is costlier than the conventional oil and gas exploration due to its complex technologies. Adding to the foe further, no two shale wells are similar in costs and they vary substantially within a shale reservoir also called a shale play. With recent phenomenon of crude prices falling from the cliff, shale production has been put on hold temporarily as the cost benefit was not attractive. As per industry bench mark, shale costs vary for different wells from $40 to $90 per barrel. Falling crude prices has made the producers to pile up stocks of shale gas and be selective in their operations due to squeeze in the capital flow.