THE shale gas revolution is upending global energy, and could hold the promise of alleviating South Asia’s energy woes. But so mired is the region in strife, scams and vested interests, that it is letting a wondrous gift slip by.
A few years ago, George Mitchell of America came up with a technology called fracking to extract natural gas from shale, a sedimentary rock. Natural gas from shale is called shale gas, and is just another form of natural gas. Both Pakistan and India have solid reserves of shale gas, but have not begun exploiting them.
The US has taken the lead in extracting its vast deposits of shale gas, making global natural gas prices plummet from $8 for a unit of gas in 2008 to around $2 today. And many other countries too are richly endowed in shale, so natural gas could stay cheap and plentiful for decades.
Natural gas has two principal uses, one in power generation, the other in transportation. Generation is how the West uses it primarily. As for transportation, Pakistan has the most vehicles in the world powered by CNG, around 2.5 million. India lags with just over a million CNG vehicles. Suffice it to say that the conveyance is field-proven. And the fuelling infrastructure is also in place. Importing shale gas, which can be compressed like any other natural gas, would substantially lower local CNG prices.The ungainly tank that cramps boot space also inhibits mass-scale adoption of CNG vehicles. South Asia, and India in particular, is a large car market, one of the fastest growing in the world. Cars across the region tend to be similar. Manufacturers can certainly be persuaded to offer comfortable and elegant CNG cars. Were South Asia to make a concerted jump to CNG, petrol’s influence would drastically reduce.
Brazil uniquely has converted its road transport to an alternative fuel, ethanol derived from sugarcane. South Asia has plentiful supplies of the plant, and could easily have emulated Brazil but general apathy, and quite possibly an aversion to copying another Third World country led to missing the ethanol bus.
CNG vehicles are not popular in the West, but that does not make them infra dig. The West has inextricably tied itself to petrol, with the maxim, ‘cheap oil, forever, whatever the cost’. Now that the belief is getting busted, enormous investments are being made in electric vehicles, but these are expensive and unsafe. They are also being introduced in South Asia, where surely the elite will snap them up, if only because of the cool factor.
On to generation. In South Asia, if petrol does not get you, then loadshedding surely will. A strong lobby urges that both India and Pakistan focus on coal-fired generation. But of all available options, coal power plants pollute the most, and risk becoming stranded investments in any upcoming global climate mandate. Natural gas offers a via media because it causes only half the pollution of coal. In the US, natural gas has been steadily squeezing coal as a power fuel. In a recent study, the Massachusetts Institute of Technology has qualifiedly approved shale gas as a strong bridge to a low-carbon future.
More significantly, the European Union, where climate consciousness is acute, has rebranded natural gas as a clean, low-carbon resource, on par with renewables and nuclear energy. It even considers shale gas exploration safe enough to forego imposing new regulations on it.
Post-Fukushima, Japan, Germany, France, Italy and others are either phasing out nuclear energy altogether, or severely curtailing it. Even as the world turns away from nuclear, India is sticking to its guns.
Three years into India’s nuclear deal with the US, the two are mired over liability disputes. If nuclear plants are so safe, then why the ruckus? Undeterred by liability, the French and the Russians have embarked upon building reactors in India, in the teeth of fierce local opposition. How ironical that France wants to construct nuclear plants as long as they are not in its own backyard!
Pakistan appears keen on the Iran-Pakistan gas pipeline, but that will deliver expensive, conventional natural gas, not cost-effective shale gas. India is dabbling with renewables like solar and wind, which are unreliable and costly, and whose effective use is still many years away, as even acknowledged by the aforementioned MIT study.
Finally, both Pakistan and India have substantial shale deposits to mine. The public sector has traditionally extracted oil and gas in South Asia, with mixed results. The private sector should be allowed into shale exploration, just as in the US, where shale gas has created half a dozen new billionaires, and over half a million jobs, all in the last few years. The technology itself is not hard to acquire. Exploration rights of course need to be allotted transparently.
The builders of newly independent Pakistan and India started with little but honesty and idealism. They did not hesitate to borrow ideas or resources from abroad. Electricity infrastructure, roads, airlines, universities, in fact model cities like Islamabad and Chandigarh were all created in a short span. Until the mid-1960s, the region’s development was hailed worldwide.
Somewhere then the rot set in. Today, even a flyover built by the government is acclaimed. Current leaders claim credit for their predecessors’ spadework, whereas mostly their hands are in the cookie jar. Infrastructural development has ground to a halt. In case any occurs, as in mobile telephony, it is in spite of the government, not because of it. Shale gas represents an opportunity for South Asia to kill two birds, power and fuel woes, with one stone. To grab or squander is up to our leaders.
The writer is the founder of an energy firm.