Feature | Algerian Shale Gas Part 2: Prospects and Recommendations

Feature | Algerian Shale Gas Part 2: Prospects and Recommendations

Algeria first announced its intention to look into shale gas exploration back in 2012. The final controversial decision in favour of extraction was then taken few weeks after the presidential elections of April 2014. Following this decision, Part II of this article examines the prospects of shale gas development in Algeria, the challenges and issues expected, and presents some recommendations for ways forward. The aim is to present an objective viewpoint that encourages further national debate and contribute to creating a more informed public opinion on the issue of shale gas. (Part I can be found here.)

Algeria has significant shale gas reserves in comparison with its neighbours (Figure 1). In June 2013, the US Department of Energy estimated Algeria’s shale gas resources at 19,800 billion cubic meters, sufficient to make the country a significant contributor to the European market for many years to come. In effect, Algeria is the first African country to contemplate plans for exploring its shale gas and so far the only country in North Africa to have regulations on ‘unconventional’ hydrocarbon resources.

The country has two main onshore shale gas basins in its desert (Figure 2). The first and the largest is the Ghadames basin in the South East region, which stretches from Biskra in the north to beyond Ilizzi in the South (~ 800km long and on average ~ 200km across) notably encompassing the In Aminas industrial zone. This basin shares parts of the Tunisian and Libyan borders.

The second is the Tindouf basin deep in the South West, parts of which extends to Morocco. Also illustrated in Figure 2 are ground water aquifers, most of the shale gas basins are found within the surfaces covered by underground water resources.

A more recent map of shale gas reserves in Algeria (Figure 3) indicates larger basins than the ones suggested by the 2013 estimates. The map also shows different levels of the shale resource (low, medium and high). Accordingly, Algeria’s key shale gas basins are located in Tindouf, Ahnet/Timimoun, Reggane, Mouydir, Berkhine/Ghadames, and Illizi.

The higher-level shale basins (Ghadames, Reggane and Tindouf) are onshore and are not scattered over small areas. This may contribute to reducing the overall cost since production (and associated equipment, logistics) can be concentrated at one site. The sedimentary basin that cuts through In Aminas has the advantage of being close to an area containing existing gas reservoirs that are well characterised and already host infrastructure that can be used for shale gas extraction. This also means that the pipeline network in In Aminas would make it easy to transport the gas.

Large areas of the basins are far from populated regions, giving those in favour of fracking a reason to suggest that any negative impacts would be kept to a minimum. After all, oil and gas have been extracted in the Algerian desert for decades without complaint. Additionally, and despite water sample assessments, conclusive scientific evidence on dangerous contamination (though some water contains methane gas) is seen as quite thin and does not prove anything immediately harmful. On the balance of things, this calls for more urgent scientific work to determine the extent to which shale gas is harmful to the environment. Still, there are a number of serious concerns that should be carefully assessed before deciding to go ahead with shale gas exploitation in Algeria.

Fracking & Water Concerns

Given the huge amounts of fracking water required to extract unconventional shale gas, it is important to ask where is this water going to come from. Fresh underground water is not only required for fracking as such but also for other purposes such as cooling of power plants. Knowing the projected amount of water use is a fundamental issue that can severely limit any prospects of exploitation. The public needs to appreciate how much water is needed for fracking per production well, and how much this compares with the total available fresh surface and ground water. To put numbers in perspective, all shale gas wells drilled and completed in the United States in 2011 consumed on the order of 135 billion gallons of water, equivalent to 0.3 % of total U.S freshwater consumption [4]. Although this looks rather small, there is a serious concern that with climatic changes in recent years, less water may be available in the future due to sporadic droughts and extreme weather conditions.

An important question to ask is therefore whether some of the water can be reused or recycled. Can it be treated in waste treatment plants to take away harmful chemicals? Here, it is important to note that not all water used for fracking can be brought back up to the surface; in fact, 80% remains stuck within the shale deposits while about 20% comes back up the well as contaminated wastewater [4]. It is not clear what happen to the water that remains inside the shale deposits. So with every fracking operation, there is a net water loss.

A recent study on underground water resources in Africa has revealed that the levels of the resources in the continent are much higher than previously believed (Figure 5) [5]. Clearly, Algeria possesses a sizeable underground water resource. For supporters of shale gas this is certainly good news. However, availability of water puts us under a bigger responsibility of how this precious resources it to be managed in the long run.

In an attempt to reduce water use as much as possible, one company called GasFrac has been experimenting with waterless fracking methods that use propane-based substances or other liquids (e.g. butane) that flow back, are recaptured and reused at the surface [6]. It is not yet clear if such methods are less expensive, water – being an incompressible fluid – is better at providing enough high pressures for fracking shale [6]. If waterless methods can be further developed, the amount of water needed for fracking will be hugely reduced or even eliminated.

Nevertheless, regardless of how much water is required for fracking or whether fracking is water-free, it is absolutely necessary to know if the water aquifers on top of the shale basins and those nearby may get contaminated with chemicals. Contamination of Algerian underground water may even extend to the water resources in neighbouring countries, potentially leading to political crises.

Political Concerns

Given the huge role of the Russian gas in Europe, Algeria may be considering an opportunity for European gas market given that gas lines (known as the Maghreb-Europe Gas Pipeline) already exist between Algeria, linking to Morocco, Spain and Portugal. No significant new investment in transport technology seems necessary for unconventional shale gas. However, a careful reading of news reports on Algerian shale gas seems to encourage and push Algeria towards its exploitation in a drive to secure gas energy for Europe, especially in light of the increasing influence of Russia in European affairs.

Some critics in Algeria highlighted that Algeria is simply trying to follow the US example without well-defined plans, particularly at a time when countries like France and Germany have blocked any plans to exploit shale gas and are instead focusing on renewable options. Success of US shale gas may be seen as a serious threat to the members of OPEC who do not wish to lose their influence on the world’s energy market. But shale gas success in the US does not necessarily mean success elsewhere because shale gas exploration is a complex issue that depends on the type and depth of shale, the amount of gas in the shale, the difficulty to recover oil and gas, and the available economic incentives in the country.

Local opposition to Algeria’s decision to go ahead with its plans for shale gas extraction had initially gathered some momentum. Many activists have resorted to social network sites, signed petitions, organised sit-ins and wrote letters to the president to call for a halt of fracking operations. However, the author is of the opinion that public protests against fracking plans, especially those in 2012 may have been much more about politics and corruption than about environmental concerns. There have always been harmful industrial zones for hydrocarbons including the one in Skikda, which sits within close distance to the city, but unfortunately public objection to these kinds of practices has been virtually non-existent. Appreciation of renewable energies development amongst the public remains hardly noticeable too and it is important that experts and the civil society focus on raising awareness about these issues.

In 2012, demonstrators outside the country were clearly uneasy about the government’s announcement of the fracking plans without any public consultation, adding to this people’s anger due to national corruption scandals that surfaced at the time. Avoiding corruption is very important for large-scale projects of this kind because such practices not only delay progress but also dramatically increase project costs, ultimately paid by Algerian taxpayers. For example, and although refuted by the Algerian Ministry of Transport, various reports claim that the final cost of the East West Highway project exceeded its allocated budget of around $11 billion. Until now, the public does not know how much the shale gas project is going to cost, nor where the money is going to come from. This issue must be made clear for purposes of transparency and the simple fact that the public has the right to know. This would also give Algerian experts the opportunity to suggest alternative, cheaper options where necessary.

Recommendations & Conclusions

Shale gas development in the Algerian desert is a realistic – but not urgent – option given the economic incentives of increasing national income through energy sale. The answer to the fracking plan of shale gas in Algeria is not a simple yes or no. But in a world that is increasingly geared towards renewable energy development, and with finite resources running out sooner or later, this project must not affect the parallel developments in renewable energy, and should instead be seen as an opportunity to create a platform for a hybrid transformation (e.g. using solar gas power plants) into full renewable energy programs. The following recommendations may be offered:

• Foreign companies and large corporations must not be allowed to start fracking activities until they have proved that the chemicals used are known and that they do not cause harm to the environment. Algeria is in a strong position to negotiate on favourable terms and should impose tough regulations on foreign companies.
• Better still, Algeria should revisit/hold its decision on shale gas until further scientific evidence emerges on the true scale of the effects of fracking on the environment and on people’s health. This is a sensible position to take in case of uncertainty. The Algerian government and people alike have a responsibility towards the environment, which must be protected for future generations. We cannot afford to undergo an environmental catastrophe.
• A country’s natural resource should certainly be exploited for the benefit of developing its infrastructure and to provide a better quality of life for its people. However, reversing the decision on shale gas exploration would further give Algeria the chance to ‘see and wait’ till more environmentally friendly methods of fracking are introduced. In particular, the potential use of ‘waterless’ (water-free) methods of fracking is attractive.
• There is no apparent need to ‘rush’ into shale gas exploitation seeing that the country still enjoys large-scale production of high quality oil and gas, at least till 2035. Some experts see the decision to go ahead with shale extraction as Algeria’s attempt to maintain its position in the European energy market by continued exports of natural gas to Europe. In a way, this is Algeria’s response to the competition from Russian gas. Even if this is true, most European countries are investing heavily in alternative forms of energy that the potential gain of shale gas exports may turn out to be much smaller than originally perceived in the long run.
• Algeria has one of the highest potentials of solar energy in the world. Solar energy technology is constantly maturing and some of it could be provided by Algerian expertise, thus avoiding the need to succumb to the pressure of large international corporations whose sole purpose is economic revenue without much care for the environment.
• Algeria could achieve a strong market for energy to Europe if it decides to engage with inspiring projects such as DeserTec [8]; a technology initiative based on the use of renewable energy from North Africa and the Middle East (mainly solar and wind) to power Europe. Morocco is already heavily involved with the DeserTec energy project while, unfortunately, Algeria’s role within this project remains unclear.
• Even if we concede that renewable energy alternatives cannot meet national demands in the near future, a sensible option for Algeria is to focus on ‘hybrid’ technologies like the successful solar-gas station in Hassi Rmel (150 MW), which has been operational since 2011. It is inevitable that development of renewable energy in Algeria will be affected by the decision to explore shale gas simply on the basis of the capital and the scale of personnel and management required for such an undertaking. This is why hybrid options are reasonable.
• There should be a wider public debate in Algeria on the issue of shale gas, to inform and engage public opinion on a decision that ultimately affects the whole population. Like in other democracies, the voice of population should be heard, considered and respected. Unfortunately, some recent debates have only begun after the decision in favour of shale gas has been made. This might be too little, too late.
• It is so far quite regrettable to see near total absence of environmental activists and associations who oppose the fracking plan in Algeria. The Algerian public should engage much more effectively on important issues such as shale gas. Led by experts, it is hoped that effective lobbies can be formed to put pressure on the government to revert its decision. This move should be fuelled mainly by real national concerns for people’s health and the environment rather than merely a political stance.

References

[1] Vello Kuuskraa, Scott Stevens, Tyler Van Leeuwen, Keith Moodhe, April 2011 World Shale Gas Resources: An Initial Assessment of 14 Regions Outside the United States, Report prepared for U. S. Energy Information Administration, 2011.
[2] http://maplecroft.com/map-of-the-week/2013/04/
[3] Baker & McKenzie’s Shale Gas, an International Guide, accessed at http://bakerxchange.com/s/b2615bd9d0f8864856b07a97d198ce09cd00f762
[4] Jess Jenkins, “Energy Facts: How Much Water Does Fracking for Shale Gas Consume?, Article for The Energy Collective, April 2013.
[5] A M MacDonald, H C Bonsor, B É Ó Dochartaigh and R G Taylor, Quantitative maps of groundwater resources in Africa, Environmental Research Letters, 7 (2012), 024009 (7pp).
[6] Kate Galbraith, “Waterless fracking makes headway in Texas, slowly”, News article for StateImpact Texas, March 2013.
[7] M. Brooks, “Fracking for the future”, New Scientist, August 2013.
[8] http://www.desertec.org/