The petroleum industry is on a 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 was not a priority in the United States until natural gas reserves started declining in the 1970s. The federal government’s price controls and waning gas reserves compelled the industry players to switch to alternate fuel sources, which caused the industry to begin investing heavily in shale gas extraction processes, particularly in the United States.
What is Shale Gas?
According to 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 becomes 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 faced stiff winds to make commercialization of shale gas production a viable activity because there are basic differences 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. (Learn about permeability in the article Grasping the Concept of Rock Permeability.) In contrast, shale gas resources form within the organic-rich shale source rock (also known as a shale play). The low permeability of the shale hinders the gas from migrating to more permeable reservoir rocks.
In the context of the oil and gas industry, permeability is the rate at which oil can flow through porous rocks. This explains why natural gas has the ability to flow through rocks, rise to the surface and be deposited between the porous rocks because they are permeable. On the other hand, a shale gas formation is more static in nature and does not flow through rocks, thus 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 and hydraulic fracturing, which are different than conventional oil extraction methods.
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 because 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
There are two main types of drilling techniques employed to extract shale gas. One of them is horizontal drilling, which is a technique that starts with 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 systems, multi-directional drilling is more efficient and capable 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 (also called fracking or hydro-fracking) is a technique in which water, chemicals and sand are pumped into the well to tap the hydrocarbons trapped in shale formations. With this process, cracks or fractures are created in the shale formation rocks, which allow gases 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 extract shale gas at a reasonable cost. Without these techniques, natural gas does not rapidly flow to the well due to its impermeable nature, and hence commercially viable quantities cannot be produced from shale. (For a further discussion, see Unlocking Unconventional Energy Potential through Hydraulic Fracturing.)
As stated above, large quantities of water and sand are mixed and pumped into the earth at a very high pressure so that it will create cracks in the shale rocks. Often a small amount 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 prevent the cracks from collapsing. This enables the trapped shale gas to escape through the wellbore. This whole process usually takes about two weeks of operation.
Why is Fracking an Environmentalist’s Nightmare?
While fracking is an effective technique to extract shale gas, it has its own share of challenges. First, because a mixture of water, mud and chemicals are injected into the shale rocks to create fractures, it exposes the ground water to pollution. This is of great concern for most countries when they permit shale gas extraction. For example, ground water resources provide for about one-third of the water demand in the UK. Hence, contaminating the groundwater with fracking liquids, methane, etc., would lead to a potential imbalance in an otherwise healthy ecosystem. Second, fracking uses substantial quantities of water, which can lead to a water crisis during a continuous fracking operation. Third, sustained fracking could lead to heavy seismic activity, which in the long run could lead to earthquakes.
Shale Economics – Losing its Sheen in the Downturn
Shale extraction is more expensive than conventional oil and gas exploration due to the complex technology involved. Furthermore, the cost to produce from two shale wells may differ widely and they vary substantially within a shale reservoir.
Given the recent drop in crude prices, shale production was temporarily put on hold because the cost-benefit ratio was unattractive. Per industry benchmarks, shale costs for different wells varied from $40 to $90 per barrel around 2017. Falling crude prices caused producers to stockpile shale gas and be selective in their operations due to a squeeze in their capital flow.