Natural gas is one of the principal sources of energy in our economy. The past decade has witnessed substantial changes in the policy use of natural gas. Out of the box, unproductive and inefficient usage of natural gas has nearly exhausted our quantified conventional natural reserves. Paradigm changes in the development of technology have created the potential to recover more natural gas from shale formations, which can be used to meet our growing demand for energy and to sustain economic development.
Shale gas is becoming increasingly important source of natural gas across the world with estimates of more than 15,000 trillion cubic feet (tcf), however what limits the extraction is the required technology. America and Canada, being self-sufficient in that area, are currently leading the market with significant amount of shale gas production. Areas around the world have identified technically recoverable shale gas and more is being explored each day. In a report by US Energy Information Administration (EIA), Pakistan is listed among the top 10 countries of the world with the largest shale oil reserves.
As an alternative energy source, shale oil and gas presents a new outlook for Pakistan. We must look ahead to resources that will create energy security in Pakistan, namely sufficient energy supply at affordable tariffs aimed at creating better economic growth. It is necessary, however, to engage in debate over this new alternative fuel. While the natural gas itself remains the same, the methods of drilling and hydraulic fracturing will pose challenges. It is therefore necessary to seek technical assistance, and to draw a roadmap that assesses the future and the way forward.
A study, completed in collaboration with USAID in 2015, had confirmed presence of 3,778 trillion cubic feet (TCF) shale gas and 2,323 billions of stock tank barrels (BSTB) shale oil in place resources. The study covered lower and middle Indus Basin, which geographically spread over Sindh, southern parts of Punjab and eastern parts of Balochistan. Total area under the study was 271,700 kilometers, which is 33 percent of total sedimentary area of the country. During the study, a detailed analysis of 124 wells were carried out including laboratory analysis on shale cores and cuttings in the United States. Objectives of the study were to validate shale gas resource, estimate initial findings, assess availability of required technology and infrastructure for shale gas operations and formulate guidelines for the shale gas policy. The study had further confirmed that basic technology required for shale gas exploration i.e. horizontal drilling and hydraulic fracturing, was available in the country and being used for conventional and tight gas reservoirs.
Pakistan has the technology for exploring conventional oil and gas that could be used for exploiting shale oil and gas. However, the country requires more technology for exploiting shale oil and gas resource on a larger scale. The real challenges are environmental issues, availability of water and higher cost of drilling as one well requires 3-8 million barrels of water. Shale gas will cost $10 per Million British Thermal Unit. However, the cost will come down with the increase in recovery of untapped deposits. For this purpose, a consortium of state-owned companies, Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL), is being formed to undertake pilot project(s) to assess the cost of extracting shale gas and oil after identification of massive reserves in potential areas. The pilot projects are likely to be executed in select areas of Balochistan, Sindh and Khyber Pakhtunkhwa.
The government will have to thoroughly conduct background studies and analyses in order to increase chances of productivity. This process should be driven by the national agenda and should form a top priority for the natural gas sector. Experiences of Poland and China show that geological and other challenges may lead to a slow start in production. However, if countries make concerted and dedicated efforts, the same obstacles may be transformed into opportunities. The industry, government, NGOs, media and public must join hands to bring about a shale gas revolution which will help to create jobs as well as produce cheap electricity and fuel for the industry. Above all, such revolution will prevent the country from expending billions of dollars on petroleum products and fossil fuel imports from the Gulf.