China fracking proceeds despite earthquake risk

Drilling for gas in Sichuan could yield rewards, but it is China's most seismically active province

PUBLISHED : Friday, 02 August, 2013, 12:00am
UPDATED : Friday, 02 August, 2013, 5:16am

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

Companies such as Royal Dutch Shell and China National Petroleum 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 and 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 United States, where unlocking the commodity slashed energy costs, reduced imports and raised the prospect of energy independence.

The US shale boom may add as much as US$690 billion a year to the country's gross domestic product and create 1.7 million jobs by 2020, according to a study by McKinsey.

For China, emulating the US 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, referring to geological and regulatory issues surrounding development.

A key step in producing shale gas is hydraulic fracturing, or fracking, where millions of gallons of pressurised 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 US 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 ExxonMobil. "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 conducted by the Earthquake Administration Bureaus of Sichuan, Hebei and Zigong Municipality.