Vivek Rao, Oil Secretary, proposes to allow private companies to explore for shale oil & gas in their existing blocks. He feels that India has better coal bed methane opportunities than from shale oil & gas

Recently, at the 8^th Asia Gas Partnership Summit 2013, Maria van der Hoeven, executive director of the International Energy Agency (IEA), Paris-based autonomous body, with 28 member countries, spoke to the press. She said that public support, because of the density of population, and substantial quantity of water resources was needed in the development of shale oil/gas, though many countries like India may have reserves of the same.

In addition to these, for proper shale exploration, there was great need for infrastructure development as well as facilities for transportation of gas when found. Besides, she felt that the gas price was "low" in India at the moment, but hinted that this may be workable when revised prices became operative next year.

In passing, one may mention that thanks to recent developments in the shale oil & gas industry, USA is said to become the world's largest producer of oil & gas (hydrocarbons) by 2015, overtaking Russia in the process. In the case of USA, shale oil & gas is "owned" by the owner of the land where it is "found", while, in the case of India, it belonged to the "state" (i.e. it becomes government property!). According to the IEA, by 2015, when USA surpasses Russia as the world's top oil producer, crude oil price is projected to reach $128 per barrel by 2035. However, by 2020, shale production is likely to plateau and the US may start losing its top rank by 2030.

As per IEA (International Energy Agency), by 2035, India may be able to produce about 35 billion cubic metres of shale gas and 25 billion cubic metres of coal bed methane, if serious attempt is made to development the known reserves in the country.

It may be recalled that ONGC was the first to strike shale gas in a pilot project at Ichhapur in Burdwan, West Bengal couple of years ago. Now, they have embarked on the first commercial exploration of shale gas and the first well has been drilled at Jambusar-55 in the Gujarat Cambay Basin, according to NK Verma, director of exploration at ONGC, who has signed a memorandum of understanding (MOU) with Conoco Phillips of USA. Once the tests are carried out, it is expected that ONGC may proceed to drill wells at Krishna-Godavari, Cauvery and Damodar basins. The outcome of the effort is anxiously awaited.

The Petroleum Ministry auctioned 30 coal bed methane blocks in four rounds, with three others being allocated on a nomination basis. Vivek Rao, the oil secretary, has stated that the Ministry proposes to allow private companies to explore for shale oil/gas in their existing blocks, and said that he felt that India has better coal bed methane opportunities than from shale oil/gas. He further stated that while the Ministry has a policy on coal bed methane, currently, India does not have a policy regime for simultaneous extraction of both coal bed methane and coal. This is a grey area that needs to be looked into seriously so that there are no ambiguities in development of these essential items.

ONGC is currently exploring coal bed methane in Singrauli, Madhya Pradesh and the Godavari valley (north) in Andhra Pradesh. It had plans to dilute 25% of its holdings in Ranigunj, north Karanpura blocks and in Bokaro, but the associate Dart Energy has accepted this offer only in Bokaro, as several major issues including fiscal responsibility, sharing of past expenses etc are in various stages of discussions. A draft pact, when ready, will be placed before the Board and the the union government for clearance, so that work in this area can also move without hindrances.

Our natural resources of water are limited; we still do not have the technology in place to process the waste water that is most likely to pollute the ground water; we need not to overlook the aquifer contamination by methane, fracking chemicals such as benzene and other fracking by-products. In fact, way back in 2011, UK is said to have linked fracking to mini earthquakes! Even in the USA, environmental groups have put up stiff resistance against fracking as it can use a lot of water in parched areas.

Vivek Rao candidly stated that we do stand a better chance with developing coal bed methane which is simply evaporating from coal mines rather than taking a great risk with shale oil & gas exploration.

If anything, we must encourage companies like ONGC, Reliance, Oil India, Indian Oil and similar others to invest in countries like the USA, where they have the natural water resources and advanced technology to obtain shale oil & gas and import the finished products from there.

Future wars will be fought on water issues. Chinese action on the Brahmaputra and Pakistani claims on Indus are enough indications as to what may happen in the near future.

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)