Oksana Polhuy writes: There are possibilities of groundwater contamination.
With the price of Russian natural gas set to skyrocket from around $300 per 1,000 cubic meters to $400 or more by the end of this year, the need to explore Ukraine’s shale gas resources with the help of foreign companies is becoming more and more urgent.
Ukraine, according to different estimates, has two to 30 trillion cubic meters of shale gas – a type of natural gas trapped in rocks beneath the earth’s surface. If Ukraine did have 30 trillion cubic meters of the shale gas, it would be enough to satisfy the demand for gas in Ukraine for 600 years.
International oil and gas majors Chevron, Shell, Exxon Mobil and TNK-BP have shown interest in exploring shale gas in western Ukraine and coal bed methane in Donetsk Oblast using hydraulic fracturing – or hydrofracking — a controversial technology that has helped the U.S. become a world leader.
However, the technology raises serious environmental concerns, including pollution of water sources, such as rivers and underground aquifers.
The Ukrainian government is taking necessary steps to ensure that legislation favorable to these international companies is in place. However, it has made little effort so far to establish strict regulations for hydrofracking in order to protect the Ukrainian environment and people from possible negative consequences.
The Ukrainian government is taking necessary steps to ensure that legislation favorable to these international companies is in place.
However, it has made little effort so far to establish strict regulations for hydrofracking in order to protect the Ukrainian environment and people from possible negative consequences.
The involvement of foreign companies in extracting Ukrainian shale gas is important because they have the necessary technologies and experience, and the funds to invest in researching shale gas deposits.
The primary hurdle on their way to the Ukrainian gas market is unfavorable tax legislation for foreign investors.
Parliament passed tax laws in May that will make the Ukrainian gas market attractive for foreign companies. A Canadian company Transeuro Energy Corp. has already taken advantage of them by testing a well in the “Karlivske-101” deposit and is going to use vertical drilling and hydrofracking to extract gas.
The Ministry of Ecology and Natural Resources asked the deputies of Lviv, Ivano-Frankivsk and Ternopil oblast councils to allow the foreign companies to extract shale gas. They were asked to pass a few resolutions about the technical and ecological regulations of shale gas extraction that will also become criteria for the tender.
The deputies of these regions, however, are not acquainted with hydrofracking and need to study the technology before passing resolutions.
View of a drilling rig exploring for shale gas in the eastern Polish village of Grzebowilk on April 27. Initial estimates suggest Poland and Ukraine have huge reserves of shale gas. Both nations hope development of the sector will boost national energy security. (AFP)
Hydrofracking is part of a new drilling method that involves injecting a mixture of millions of liters of water, sand and chemicals into a well to keep fractures in the rock open and allow gas trapped in shale or coal to come up to the surface. The well has a cement casing to protect groundwater from contamination.
The waste water, or produced water, that comes up to the surface is stored in a pit.
But there are possibilities for contamination. Fractures made by the blasting of the mixture can connect to natural fractures that can go up to the surface or into the groundwater, potentially contaminating water or air with gas, which can escape via these routes.
Another possible reason for contamination is that the pressure of injecting the mixture can be so high that the cement casing breaks, allowing the gas to escape through cracks. The greater the depth of the gas deposits, the greater the pressure required. Deposits in Ukraine are deeper than in the U.S.
Final piece in the jigsaw – learning from the U.S. experience with hydrofracking and passing certain regulations to prevent environmental problems – must not be forgotten.
The waste water, which could contain chemicals, is a further problem. It is stored in a pit until it is moved to a sewage water treatment facility, but if it stays outside for a long time, it can evaporate or leak into the environment if heavy rain floods the pit.
Furthermore, most of the chemical mixture remains underground, posing unknown risks to the environment and people’s health.
A study by U.S. scientists published in May showed that methane gas levels in water wells close to the drilling zone were 17 times higher than in areas further away. The U.S. Department of Interior said that the concentration of methane was “dangerous and requires urgent hazard mitigation.
The scientists, from Duke University, concluded there was a link between the gas extraction and water contamination.
In 2005, the U.S. Congress exempted hydrofracking from most environmental regulation, meaning that oil and gas companies could use hydrofracking without being responsible for the consequences. Since that year, the number of reported water contaminations has increased dramatically. Water in some people’s wells and houses is so polluted that it bursts into flames when lit.
Because of the failure of national lawmakers to regulate hydrofracking, many states are conducting their own studies and recommending appropriate regulations. These states have been avoiding the most serious problems by imposing strict regulations.
If Ukraine considers using hydrofracking, it should first adopt some of these regulations:
First, companies should be obliged to disclose all fluids and chemicals used during hydraulic fracturing. Although the effect of some of the chemicals on the environment is unknown, it’s important to know what they are for future studies.
Second, the pressure of injected fluid should be reported, and allowed only at safe levels.
Third, thick, high-quality cement casings should be installed to protect groundwater from contamination. Fourth, the method of storing waste water should be reported, and it should be transported for treatment within a short period. This pit should be constructed in a way that will protect the environment from leakages.
These measures are particularly important as the government plans to permit hydrofracking in western Ukraine, a region that is known for its pure mineral water and health resorts visited by many tourists. Any water contamination caused by hydrofracking could endanger these industries.
It seems like everything is in place for Ukraine to lessen its dependence on Russian gas: the tax laws are fixed, the coal bed methane and shale gas deposits are promising, and the foreign investors are eager to invest millions of dollars in exploring these resources.
The Ukrainian government is gaining foreign experience of shale gas extraction through hydrofracking and is ready to rely on foreign technologies and experts.
But the final piece in the jigsaw – learning from the U.S. experience with hydrofracking and passing certain regulations to prevent environmental problems – must not be forgotten.
Oksana Polhuy is researching the consequences of hydrofracking at DePauw University in Indiana. She can be reached at [email protected].
Editor’s Note: Business Sense is a feature in which experts explain Ukraine’s place in the world economy and provide insight into doing business in the country. To contribute, contact senior editor Brian Bonner at [email protected]
