India: Water or Shale Gas?

IntroductionThe exploration and production of shale gas in the United States (US) has been a game changer, making the country self-sufficient in natural gas over the last few years. The US has the advantage of knowing the technology for shale gas exploration and production, availability of large quantities of fresh water required for 'fracking' shale rock and large areas of land where there are no constraints to carry out exploration. India is also looking at exploring shale gas domestically to fill its large supply-demand gap. But will, what works for the US, also work for India?

One of the key determinants of the viability of this technology is the availability of large quantities of clean water. This raises a red flag against exploiting shale gas resources in India, given that India is a water stressed country, and is fast approaching water scarcity conditions.

Shale gas in the USFrom being an importer of LNG, the country is now self-sufficient and there are plans to export gas from the very terminals that were built for imports. Estimates of fresh water usage for fracking in the US vary from 2.8 to 3.8 million gallons per well to an average of 4.5 million gallons in the Marcellus field and up to 13.0 million gallons in the Eagle Ford field. These figures need to be multiplied by the number of times fracking has to be done to a well and the number of wells at each location. Many different chemical products, some of which are toxic, are injected, along with several million gallons of fresh water, into each of the wells. Further leakage of the toxic chemicals can contaminate aquifers, which are the sources of drinking water.

India's Reliance Industries Ltd (RIL) has made big investments (US$ 3.5 billion) in the Marcellus and Eagle Ford shales through joint ventures with Chevron, Carrizo, and Pioneer. RIL views its investment as a profitable proposition and not necessarily at gaining technology and experience to explore for shale gas in India. Oil India Limited (OIL), Indian Oil Corporation (IOC), and GAIL India Limited have also made investments in shale gas production in the US.

Proposed shale gas exploration policy in IndiaThe Ministry of Petroleum and Natural Gas (MoPNG) has identified six basins as potentially shale gas bearing. The Ministry had also put out in 2012, a draft policy for the exploration and exploitation of shale gas, inviting suggestions from the general public, stakeholders, environmentalists. However, enforcing legislation on environmental and water issues is a problem in India, and such legislation has been more in the breach than in observance.

Fresh water availability in IndiaIn the next 12-15 years, while the consumption of water will increase by over 50 per cent, the supply will increase by only 5 to 10 per cent, leading to a water scarcity situation. Further the potential shale gas bearing areas, are also areas that will experience severe water stress by 2030.

Land acquisition is not covered in the shale gas policy, but will be a serious issue because of the large area required for fracking and the consequent displacement of people. Recently, the Chairman and Managing Director (C&MD) of ONGC, mentioned that 'land use for drilling operations may face severe resistance from the locals', and 'availability of huge water resources for its shale gas operation is also apprehended to be a great challenge for us'.

ConclusionWhile the potential shale gas reserves overshadow those of conventional gas, India has a long way to go in identifying shale gas rich basins and acquiring the necessary technology and experience to extract shale gas. Meanwhile, the water situation will only get worse due to the reducing availability of fresh drinking water year by year, dropping groundwater levels, and the increasingly polluted rivers and other water bodies. Unless, there is some revolutionary technological breakthrough, which does not need the use of fresh water and chemicals, it is vital that India seriously asks itself this question: Should we further endanger a rapidly depleting resource on which all life depends?