Is shale gas the answer to China's energy needs? Perhaps not

Updated: 2012-08-16 06:26

By Ho Chi-Ping (HK Edition)

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Is shale gas the answer to China's energy needs? Perhaps not

A new hydraulic fracturing center in Sichuan province represents China's attempt to gain a foothold in an field that applies hydraulic pressure to penetrate previously inaccessible sources of fuel. "Fracking" has been in practice in the United States for the past six years, and it remains controversial. The concerns surrounding this technology are still vague. Ongoing research, however, is beginning to find potential health and environmental problems associated with fracking.

In its effort to reduce its reliance on conventional fossil fuels and to cut down greenhouse emissions, the Chinese government has turned toward cleaner sources of energy to meet the demands of the growing nation. However, "safe nuclear" thorium technology is still under development, and China's solar industry produces more components than can be currently absorbed by the market.

The central question is whether China should adopt shale gas exploration. Shale drilling injects water, sand and other so-called fracking fluids at high pressure to fracture rocks deep in the earth. The process releases hydrocarbons that have become captured beneath the rock layers. The procedure requires huge amounts of water: a resource in which China already faces shortages. Sichuan is also an earthquake-prone region, lying along one of the most active fault lines on the planet.

Shale exploration exponents claim that burning natural gas yields half the carbon dioxide as burning coal, greatly reducing carbon emissions. They also say that local energy production reduces energy imports, and subsequently reducing diplomatic entanglements. Energy exploration may also generate wealth to inland China, still much poorer than the coastal provinces.

However, we must determine which of these benefits actually are feasible. Things that work elsewhere may not work in China. In addition, it is still not clear that the anticipated benefits are worth the potential problems that may arise from fracking.

Despite recent technological improvements in the US, some hydrocarbon gases still escape into the atmosphere from wells. Studies suggest that methane and other gases released from fracking may damage the atmosphere even more than coal burning. Fracking is a more complex process than simply mining coal, and so measurement and prediction of results are more difficult.

In the absence of strong regulation, companies are under no obligation to take measures to protect the environment. Thus health and environmental risks may go undetected. The situation in the United States should shed some light on what China will require to monitor and counter any environmental risks.

Along with gas leaks, there have been reports of other substances, including radioactive material reaching the surface. There is ongoing debate whether Barnett Shale drilling was the main cause of breast cancer for those residing near the site. Last month, North Carolina Governor Bob Perdue vetoed legislation to permit fracking, due to insufficient safeguards. This clearly suggests that fracking regulation, even in the United States, is not yet mature enough to protect the environment.

Unlike Texas, Sichuan lies along the upper reaches of the Yangtze River. Major cities like Chongqing, Wuhan and Shanghai rely on its waters. Strict measures on contaminants from fracking need to be in place to protect the agricultural industry. Are there enough assurances from the government that there is close monitoring and open reporting of its fracking program? How would Chongqing (for example) be informed of the projects' successes and failures?

While the science is still unclear, there is growing concern that the water injected into fractures actually increases the chance of earthquakes. The UK banned fracking last year after experiencing two earthquakes supposedly "associated" with fracking. North Texas also experienced quite a few earthquakes this year. If this connection proves true, then fracking using today's technology could pose a great threat to Sichuan.

It is suggested that fracking operations will bring employment opportunities and raise regional wealth. While State-owned enterprises may bring temporary relief to impoverished regions, the level of revenue given to the State and redistributed to the region cannot be guaranteed. Sichuan is abundant in natural resources and minerals, including coal, but many villages are still poor, due to their remoteness and poor infrastructure. Whether shale exploration can help lift the living standards in the poorer suburbs is a question that will depend on the number of locals hired by the industry, and the ultimate distribution of wealth following extraction.

The concerns I have raised above do not discredit fracking as an option for China. Natural gas and shale exploration may become an integral part of China's energy consumption. But, despite what some people may suggest, fracking is not, and perhaps never will be, a miracle solution to China's problems. It comes with potentially severe costs that need to be recognized.

As we try to move towards a more sustainable form of development, we need to be careful that we do not replace one set of environmental problems with another.

The author is former secretary for home affairs of the HKSAR government.

(HK Edition 08/16/2012 page3)