China fracking quake-prone province shows zeal for gas

China won’t let earthquakes hinder its quest for energy.

Companies such as Royal Dutch Shell Plc and China National Petroleum Corp. are starting to drill for gas and oil in shale rock in Sichuan, the nation’s most seismically active province, a process geologists say raises the risk of triggering quakes.

“For the Sichuan basin, earthquakes are a problem for shale gas and shale oil production because of the tectonic conditions,” said Shu Jiang, a professor at the University of Utah’s Energy & Geoscience Institute in Salt Lake City. “The siting of the wells could cause some artificial earthquakes.”

China’s shale gas reserves may be almost double those of the U.S., where unlocking the commodity slashed energy costs, reduced imports and raised the prospect of energy independence.

The U.S. shale boom may add as much as $690 billion a year to GDP and create 1.7 million jobs by 2020, according to a study by McKinsey & Co. For China, emulating the U.S. would provide greater energy security and help curtail dependence on burning coal that blankets cities in smog.

“Once they crack the code on shale, they’ll want to push aggressively on it,” said Neil Beveridge, an analyst at Sanford C. Bernstein & Co., referring to geological and regulatory issues surrounding development.

Heavily Faulted

A key step in producing shale gas is hydraulic fracturing, or fracking, where millions of gallons of pressurized water, chemicals and sand are injected underground to shatter rock and release trapped gas. Afterward, some of the liquids return to the surface and often are disposed of in underground wells.

Disposal of waste fluid has been linked to quakes in the U.S. and China.

Sichuan lies at the crossroads of some of the earth’s most active fault lines.

“The Sichuan basin is at the edge of the biggest continental collision in the world, India smashing into Asia,” said Julio Friedmann, chief energy technologist at the Lawrence Livermore National Laboratory and former research scientist at Exxon Mobil Corp. “That’s stressing the continental crust.”

More than 2,700 quakes of varying magnitude were recorded around an underground injection well in Zigong, Sichuan, during a three-and-a-half year study by the Earthquake Administration Bureaux of Sichuan, Hebei and Zigong Municipality.

“With the beginning of increased water-pressure injection, seismic activity around the test well showed a significant increase,” researchers led by Zhang Zhiwei wrote in a 2012 paper.

Fracking was linked to minor earthquakes near Blackpool, England. The U.K. placed a moratorium on the process for 18 months to assess the well. Drilling resumed in December.

Since 2000, a flurry of mostly small, yet unusual temblors were recorded in the central part of the U.S., prompting the Department of the Interior to commission a study of the events in Oklahoma, Texas, Colorado, Ohio and Arkansas.

Page 1 of 2 >>

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Comments
comments powered by Disqus