A Tale Of 3 Countries: Water Risks To Global Shale Development

Courtesy of the World Resources Institute, a look at three case studies facing watergy issues related to shale oil development:

The shale gas revolution, which began nearly 10 years ago in the United States, is poised to spread across the globe. For many countries, shale gas could strengthen energy security while cutting emissions.

But unlocking this massive resource comes with a significant environmental risk: access to freshwater for drinking, agriculture, and industrial use. Drilling and then hydraulic fracturing each shale gas well uses large volumes of water for short periods of time—between 7 million and 25 million liters (1.2 million and 6.6 million gallons).

This week, WRI released Global Shale Development: Water Availability & and Business Risk, a first-of-its-kind report that raises a yellow flag: a series of water availability-related challenges could limit shale resource development on six continents. Three countries help tell the complex story: China, Argentina, and the United Kingdom.

China: Shale Rich, Water Stressed

China is already the world’s largest energy producer and consumer. It has the world’s largest technically recoverable shale gas resources, but those resources are located in areas of highest water stress. Over 60 percent of Chinese shale resources are in areas of high to extremely high baseline water stress or arid conditions. The government and energy companies are already grappling with the issue. Last week, China’s two largest energy companies upgraded their forecasts for shale investments, even as the Chinese government halved its shale gas production targets earlier last month. As the world’s largest greenhouse gas emitter, the country’s shale resources could be a key to addressing climate change, but its water concerns must be addressed.

Argentina: Shale Rich, Less Water Stressed

Argentina is South America’s largest natural gas producer and consumer, and possesses the world’s second-largest technically recoverable shale gas resources. With low to medium stress over 72 percent of its shale resources, competition for water is less concerning to Argentinian plays overall. However, 28 percent of the resources are in arid areas, so the country will not entirely escape water-related constraints if shale development progresses. A partnership with Chevron helped more than triple production in a shale basin called the Neuquén from last year to this year.

The United Kingdom: It’s Complicated

The U.K. is Europe’s third-largest natural gas producer. Industrial water use accounts for more than 30 percent of the nation’s total water demand, but those withdrawals have been shrinking for the past 10 years as natural gas and oil production declines. The government is now, however, offering tax breaks to boost shale development, and will need to manage water-related risks if shale drilling and hydraulic fracturing expands. High industrial and domestic demands for water push 34 percent of the UK’s shale resources into high to extremely high water stress, making public concern and conflict around hydraulic fracturing more likely. In July, a report by two scientific groups cited widespread concern over hydraulic fracturing’s safety, so tension is already emerging.

Global and Local Significance

This water-shale energy trade off poses significant social, environmental and financial challenges. And over time, competition for water as well as public concerns over hydraulic fracturing will likely increase as shale development expands internationally and global temperature and precipitation patterns shift.

Every country contemplating shale development will share a common concern for access to freshwater, but it’s important to consider the localized factors that make every well unique. Global Shale Development also evaluates water availability for each shale play in 8 other countries either developing shale resources or most likely to develop them in the future: Algeria, Australia, Canada, Mexico, Poland, Saudi Arabia, South Africa, and the United States.

What Can Companies and Governments Do?

Shale resource development is still nascent in most nations, making this the ideal time to take action. Global Shale Development shares four recommendations to help governments, companies, and other groups protect water security while promoting energy security:

  • Assess your water risks before deciding to develop shale plays to understand local water availability and reduce risk.
  • Disclose all water-related information and work collaboratively with local regulators, communities and industries to build trust between all groups involved while reducing regulatory uncertainty and reputational risks.
  • Engage businesses in public water policy processes, work collectively to protect the source of important water supplies, and develop water-management plans to help protect other users’ stable water supplies.
  • Build a business case to minimize freshwater use and engage in corporate water stewardship to reduce impacts on water availability. A wide range of tools are available to minimize water use, including developing a water strategy and following water stewardship guidelines.

This entry was posted on Thursday, September 18th, 2014 at 8:41 am and is filed under Uncategorized.  You can follow any responses to this entry through the RSS 2.0 feed.  You can leave a response, or trackback from your own site. 

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About This Blog And Its Author
As the scarcity of water and energy continues to grow, the linkage between these two critical resources will become more defined and even more acute in the months ahead.  This blog is committed to analyzing and referencing articles, reports, and interviews that can help unlock the nascent, complex and expanding linkages between water and energy -- The Watergy Nexus -- and will endeavor to provide a central clearinghouse for insightful articles and comments for all to consider.

Educated at Yale University (Bachelor of Arts - History) and Harvard (Master in Public Policy - International Development), Monty Simus has held a lifelong interest in environmental and conservation issues, primarily as they relate to freshwater scarcity, renewable energy, and national park policy.  Working from a water-scarce base in Las Vegas with his wife and son, he is the founder of Water Politics, an organization dedicated to the identification and analysis of geopolitical water issues arising from the world’s growing and vast water deficits, and is also a co-founder of SmartMarkets, an eco-preneurial venture that applies web 2.0 technology and online social networking innovations to motivate energy & water conservation.  He previously worked for an independent power producer in Central Asia; co-authored an article appearing in the Summer 2010 issue of the Tulane Environmental Law Journal, titled: “The Water Ethic: The Inexorable Birth Of A Certain Alienable Right”; and authored an article appearing in the inaugural issue of Johns Hopkins University's Global Water Magazine in July 2010 titled: “H2Own: The Water Ethic and an Equitable Market for the Exchange of Individual Water Efficiency Credits.”