'Water risk' looms as barrier to drilling

WASHINGTON – The ability to harvest oil and gas from dense rock formations offers the promise of fueling the world for decades to come, but a new report warns that countries may not have enough water to tap those underground resources.

The great conundrum of the drilling revolution unfolding in the United States and now being exported to other nations is that some of the countries with the biggest oil and gas resources also have the least amount of water to dedicate to extracting them.

According to the analysis by the World Resources Institute, 38 percent of the earth's shale gas and tight oil resources are in areas that are either arid or under high levels of water stress already — a scenario that does not mesh with the high water demands of today's extraction techniques.

Andrew Steer, WRI's president, said the analysis "should serve as a wake-up call for countries seeking to develop shale gas."

"Water risk is one of the most important but underappreciated challenges when it comes to shale gas development," Steer said. "Energy development and responsible water management must go hand in hand."

The hydraulic fracturing process, conducted after a well is drilled, involves pumping sand, water and chemicals underground to open up the pores of oil- and gas-bearing rock and allow those hydrocarbons to flow out.

Oilfield service companies are developing techniques that use less water, including "dry fracs," where gas generally stands in for the fluid. And some oil and gas companies are seeking to reuse much of the water that flows back out of a well.

"As countries escalate their shale exploration, limited availability of freshwater could become a stumbling block," say authors Paul Reig, Tianyi Luo and Jonathan Proctor in the WRI report.

China is the poster child for this dynamic, as the country lays claim to more technically recoverable shale gas — some 1,115 trillion cubic feet — than any other, according to the government's Energy Information Administration. It also is ranked No. 3 for the size of its technically recoverable tight oil resources, estimated at 32.2 billion barrels.

But more than 60 percent of those Chinese resources are in arid areas or those with extremely high baseline water stress, meaning there is stiff competition for water and existing demand is close to or exceeds available supply.

WRI identifies other countries, where water-related conflicts threaten potential energy development.

For instance, Mexico has the sixth-largest technically recoverable shale gas resources in the world and ranks No. 8 for its technically recoverable tight oil. But its shale plays often overlap with areas of high baseline water stress.