FOSSIL fuels - oil, coal and natural gas - are much maligned because of the greenhouse gases they release when they are burnt.
Natural gas is the cleanest of the ugly trio, and is being globally proclaimed as the fossil fuel of the future. As the easy-to-exploit oil reserves become exhausted, oil companies are turning to alternatives like deep sea oil, the tar sands in Canada, and natural gas.
Sasol [JSE:SOL] is well positioned in this focal shift, thanks to its gas-to-fuel technology.
In America the new focus is politically driven. This is because the extensive sources of shale gas the US has been exploiting over the past decade are helping to wean it from importing oil from the politically unstable Middle East as well as the Niger delta.
But in avaricious haste to extract unconventional natural gas resources like shale gas, expensive short cuts have apparently been taken that could hold lessons for South Africa, which is taking baby steps on the path to gas.
Dave van der Spuy, resource evaluation manager at the Petroleum Agency of South Africa, in a recent talk presented by the South African National Energy Association spoke of the unconventional gas resources at South Africa's disposal.
Anglo Operations is experimenting with coal bed methane gas in the Waterberg Coalfield. Van der Spuy said Anglo had sunk 55 boreholes and analysed five test boreholes over a period of three years. A 1 000bn cubic feet (dmkv) gas resource appears to be workable.
The Petroleum Agency has awarded 32 exploration rights for coal bed methane gas, with 80 boreholes having been sunk to date and another 100 applications for exploration rights needing to be processed.
The challenge is the potential conflict between companies with coal mining rights and those with rights to exploit coal bed methane gas, and the timing of their respective developments.
If the coal is mined first, the gas escapes. If the gas is extracted first, coal mining becomes safer.
Another potential conflict is with Eskom, which wants to use underground coal gasification in non-mineable coal reserves as an alternative energy source. Where the gas is extracted, the coal becomes sterile and Eskom cannot use it.
Shale gas is natural gas trapped in deep-seated shale rock.
Hydrofracking is a technique refined in America over the past decade to extract gas. It requires a great deal of water – a scarce commodity in South Africa.
Contamination danger
According to a report on the Marcellus shale gas reserves in America, it can take 19 megalitres (19 million litres) of water to develop a single gas borehole.
Other problem areas include the contamination of drinking water, the escape of chemical fluids used in the fracking process, and the leakage of the gas to shallower rock formations where it can contaminate groundwater.
Van der Spuy reckoned a possible solution is to use deep-seated aquifers – whose water is unsuitable for human consumption – for the exploitation process, so that the aquifers in shallower rock levels remain inviolate.
Optimistic estimates are that South Africa could have 15 to 30 dmkv or even 40dmkv of shale gas – enough for dozens of projects, such as PetroSA's gas-to-fuel plant. The Karoo Basin contains layers of shale rock extremely rich in organic material, which contain the gas.
But the way in which it is currently extracted in America makes the hair of the environmentally-conscious stand on end.
Because shale gas is encountered in relatively small quantities across a wide area, many boreholes need to be sunk and gas finds exploited, one after another, within a relatively short period. This leaves a distinct blot on the landscape.
Without proper rehabilitation, the landscape is quickly defaced with mounds of earth and slimes dams. In some areas residents have complained about contaminated groundwater. There have been cases where, if you open a kitchen tap and strike a match, you have to duck from the explosion when the gas in the water ignites.
Some US developers have scant respect for landowner rights.
Provoking a public outcry
Big guns like Shell, Sasol and Anglo are seriously searching locally for shale gas. They are forced to do so because of the depletion of oil reserves and coal's high greenhouse gas content.
Natural gas is apparently cleaner, but provisional estimates by Professor Robert Howarth of the Department of Ecology and Environmental Biology at Cornell University in New York State indicated that, in the full life cycle of shale gas exploitation and use, greenhouse gases could equal those of coal.
The Worldwatch Institute said in a recent study that the local environmental problems in shale gas areas in America had elicited such a public outcry that it could force production to stop in certain areas.
The study found that the most important environmental risks in the extraction of shale gas were similar to those of conventional gas exploitation on land.
These are gas migration and groundwater contamination through poor borehole construction, seepage, and the leakage of wastewater and chemicals used in the process of boring and fracking.
The study recommended that the industry cooperate with government agencies, environmental groups and local communities to develop innovative technology and practices to limit the environmental risks of shale gas exploitation.
Further research and better communication were necessary on the environmental risks of single boreholes as well as large-scale natural gas developments, so that society could take well-informed decisions about our energy future.
Chesapeake Energy, Sasol's American partner in its shale gas project, said no instances of groundwater contamination had so far been recorded in shale gas projects in America. This was because they were far deeper underground than shallower gas exploitation works, such as coal bed methane gas projects.
Nevertheless, landowners and environmental experts will have to keep a keen eye on South Africa's shale gas progress to avoid the problems encountered in the US.
- Sake24.com