In my previous article, I stressed upon exploring widely available gas resources in the country. I would like to draw the attention of the readers and policy-makers on yet another vast potential, called Shale Gas. There are two types of gas resources; conventional or core resources, the ones we are consuming now; and b) non-conventional gas resources.
The non-conventional resources have three further classifications; a) Coal-based methane found in coal deposits; b) Tight gas resources are the ones which have been abandoned earlier due to special problems and were not explored (On Tight gas resource GoP has issued a draft policy, which process is moving at a snail's pace, and needs to be expedited); c) Shale Gas which is a relatively new resource and technology that has not been discussed or evaluated much in Pakistan. My focus in this article is on Shale gas.
But before, I dilate on the Shale gas issue, I would like to say a few words about Coal-based Methane (CBM) gas resources potential and its exploration and exploitation in Thar coal field. Currently under ground Coal Gasification project is at an advanced stage of implementation. I would propose that the scope and domain of the project be extended to explore CBM gases as well.
It is not a very difficult task, and drilling of only 100-200 meters is required as opposed to thousands of meters in case of conventional oil and gases. Foreign companies had earlier been awarded exploration licences, which were cancelled for unknown reasons. Sindh government would be doing a lot of good to the province, if it starts taking interest in this matter as well, by initiating policy processes and practical steps including the ones proposed earlier.
American Petroleum Institute (API) defines Shale gas as, "natural gas from shale formations. The shale acts as both the source and the reservoir for the natural gas. Older shale gas wells were vertical while more recent wells are primarily horizontal and need artificial stimulation, like hydraulic fracturing, to produce. Only shale formations with certain characteristics will produce gas.
The most significant trend in US natural gas production is the rapid rise in production from shale formations. In large measure this is attributable to significant advances in the use of horizontal drilling and well stimulation technologies and refinement in the cost-effectiveness of these technologies. Hydraulic fracturing is the most significant of these.
Tight gas, coal-bed methane, and shale gas will make a major contribution to future North American gas production. Unconventional gas production is forecast to increase from 42 percent of total US gas production in 2007 to 64 percent in 2020. Despite the current economic conditions, the long-term need for US natural gas should be strong enough to support these anticipated future production levels."
Today, due to the emergence of these new resources, there is a glut of gas in the US. Instead of importing gas from Canada and LNG from the Middle East, there are talks of exporting gas. Gas prices in the US have plummeted to less than 4 USD per 1000 Cft. This is despite, rising oil prices. The US resources of gas are now forecast to extend beyond 100 years, at current rate of consumption and including these resources. We can have like of the same. We are also one of the significant gas producing countries of the world. Lethargy and despondency that seems to have taken over us must go.
Oil and gas sector in Pakistan is a victim of neglect for a long time now. There have been controversies in appointment of management and chief executive of such vital organizations like OGDC. Ministers have been changed, one after the other, and none of them had familiarity with the sector. Provincial autonomy issues have also caused uncertainty.
Whatever be the political dispensation or the approach to slice the pie, the need for an organised core establishment in this sector cannot be over-emphasized. Issuing policies alone, although necessary, is not enough. Policies have to be implemented. Both foreign exploration investment as well as national one are required. As the former finance minister Shoukat Tarin, once said, we are following soft paths of launching energy import projects instead of developing our own.
The US government has expressed its willingness to share this technology with other nations and has taken certain practical steps in this direction. Global Shale Gas Initiative (GSGI) has been launched, and many nations including India and China have been taken as members of this initiative.
Unfortunately, Pakistan despite being dubbed as most allied ally of US interest is found nowhere in the list. Partly or mostly, the fault probably lies with us, of not showing interest and lobbying enough in this respect. Part of the problem lies in the under-development of our oil sector, and partly the law and order situation in our gas prone areas, which discourages involvement of external parties, agencies and companies.
We have to do something about these issues and work towards a political break-through and settlement with the disgruntled forces, and pave the way for initiating much needed efforts both to exploit conventional and new resources in the oil and gas sector. On diplomatic front, instead of almost a sole focus on acquiring arms from the US, or cash resources, technical and technological acquisitions such as in Shale gas development should be pursued.
I would also appeal to our US benefactors to be more willing and forthright in this respect, as we do not find much of the physical evidence of the promised US assistance and support to Pakistan in the energy sector. Instead of forecasting or planning on how to deal with a potentially divided and anarchic Pakistan, (as one of my old friends Professor Stephen Cohen of Brookings Institution and a well-known expert on Pakistan has recently written), it would be a good investment to take care of some of Pakistan's critical problems.
(The writer has been a research fellow at Harvard University and has recently authored, "Pakistan's Energy Development ; the road ahead.")
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