Rejection: US energy firms refuse to endorse shale gas estimates – The Express Tribune


Reputed energy companies of the United States have dismissed the estimates of shale gas deposits given by the US Energy Information Administration (EIA), which put the reserves at 51 trillion cubic feet (tcf), close to the conventional gas reserves of 58 tcf.

“US companies did not agree with the estimates of EIA, arguing that a study to assess the deposits was conducted by a group of economists,” said an official of the Ministry of Petroleum and Natural Resources who was part of a ministry team that visited the US in August.

During the trip, the delegation members met officials of some well-known companies including Halliburton to discuss the study on shale gas reserves and get their endorsement. Company executives insisted that samples of shale gas would actually determine the size of the reserves.

The ministry team also held meetings with representatives of equipment manufacturing companies as their tools could be used for extracting shale gas.

“Already some samples have been sent to US laboratories and more will be shipped for examination,” the official said. “After the process is completed and results are known, we will draft a policy and share it with all stakeholders.”

According to the officials, shale gas extrusion needs a huge quantity of water, which will be difficult for Pakistan to provide. A similar plan for shale gas drilling was shelved in the UK because of challenges related to water supply.

Shale gas is natural gas that is found trapped in shale formations and since it has low permeability compared to conventional reserves, it does not come out easily and a significant amount of investment and specific pricing are required for its exploitation.

The government is conducting a study in association with the US Agency for International Development (USAID) to assess the shale gas reserves in the country. USAID has provided a technical assistance of $1.8 million for the study, which will be completed in a year.

Besides the samples sent to the US, Pakistan is also seeking US technology. However, the officials said this could not be useful in Pakistan as the difference in geographical conditions required different kinds of technology.

The petroleum ministry has sent a summary to the Economic Coordination Committee (ECC), seeking approval for initiating a pilot project to tap the country’s shale gas deposits in an effort to gradually bridge the yawning gap between demand and supply of energy.

At present, shale gas is not produced in the country and significant initial work is required to be undertaken to consume this potential energy resource.

With the discovery of massive shale gas reserves, the US has become a gas-exporting country. According to reports, Washington will also experience a boom in shale oil production in the future and will become the largest oil producer.

According to the officials, Pakistan will offer $12 per million British thermal units (mmbtu) to gas exploration and production companies under the pilot programme, a price that is close to the cost of gas to be imported from Iran under the Iran-Pakistan pipeline project.

“A policy framework has been prepared and its approval will be sought from the ECC,” the petroleum ministry official said.

Exploration companies have already found some traces of shale gas during the search for conventional gas as 10% to 12% shale gas appears on upper faces of conventional gas.

Published in The Express Tribune, October 2nd, 2014.

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via Rejection: US energy firms refuse to endorse shale gas estimates – The Express Tribune.