Energy

Water Shortages Will Limit Global Shale Gas Development, Especially in China


Shale drilling in China's Sichuan Province

Photograph by Corbis

Shale drilling in China's Sichuan Province

If all the world’s theoretically recoverable shale gas could be developed, our supply of clean-burning natural gas would expand 47 percent—lowering both greenhouse gas emissions and energy prices, according to estimates from the Washington-based World Resources Institute.

The hitch is that the process for extracting shale gas, called hydraulic fracking, sucks up as much as 25 million liters (6.6 million gallons) of water for each well. A report from WRI (PDF), “Global Shale Gas Development: Water Availability and Business Risks,” released on Tuesday, shows that roughly 38 percent of the world’s shale gas and oil lies buried beneath water-stressed regions. This means that extraction efforts will be difficult and expensive, as well as economically and environmentally risky.

China has the world’s largest estimated deposits of shale gas (1,115 trillion cubic feet), according to studies by the U.S. Energy Information Administration. Yet China is also one of the world’s most naturally water-stressed nations: It is home to a fifth of the world’s population but only 7 percent of its freshwater resources. WRI’s team compared maps of China’s potential shale plays with available water and found that 61 percent of China’s shale lies in arid regions. (China recently slashed in half its mid-term projections for shale gas development, from a goal of over 60 billion cubic meters annually to 30 billion cm by 2020.)

Australia, Russia, and Brazil are the countries with the largest estimated shale gas deposits; they have plentiful water supplies, too. Argentina, which has an estimated 802 trillion cubic feet of shale gas—second only to  China in volume—has only low to medium water stress. Most of the shale deposits in India, which faces steeply rising energy demands (and a dire need for fuels that produce less smog than diesel and coal), are located in regions that already face water shortages.

Roughly 386 million people around the world—more than the total population of the U.S.—live in areas identified as potential shale plays, according to the report. But diverting significant water resources in those regions would affect local economies and the environment. About 40 percent of the water used in those areas currently goes to agriculture, with about the same percentage to industry; a fifth of the water goes directly to household use.

Larson is a Bloomberg Businessweek contributor.

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