UNCTAD report urges developing countries to view fracing cautiously

June 4, 2018
Countries seeking ways to increase access to energy should view hydraulic fracturing cautiously because of possible gaps in local geological and hydrological knowledge, inadequate regulatory environments, and diversion of resources from renewable energy source, a United Nations Conference on Trade and Development report recommended.

Countries seeking ways to increase access to energy should view hydraulic fracturing cautiously because of possible gaps in local geological and hydrological knowledge, inadequate regulatory environments, and diversion of resources from renewable energy source, a United Nations Conference on Trade and Development (UNCTAD) report recommended on May 24.

“Climate change means that all countries must, as a matter of strategic urgency, move away from burning fossil fuels, including shale gas,” UNCTAD Sec.-Gen. Mukhisa Kituyi said in Geneva, where the report was released.

“But given that energy is needed to end poverty and boost development, countries with potential shale gas resources should understand the pros and cons when they make policy decisions about the short-term energy mix,” Kituyi said.

The report said gas should contribute to a smooth transition from the current economic model, which mainly is based on fossil fuels, to achieving a low-carbon economy, with the objective of meeting UNCTAD Sustainable Development Goal 7 of affordable and clean energy by 2030.

Gas offers several pros and cons as an affordable bridge fuel between large carbon dioxide emitters such as coal and crude oil and renewable fuels, the report said. Gas emits about 40% less CO2 per unit of energy produced than coal and can be stored and used on demand to meet variable needs more efficiently than energy generated by wind and other renewable sources, it noted.

It’s also a fossil fuel that emits CO2 when burned, and while its main component, methane, has a shorter atmospheric lifespan than CO2, its global warming potential is 28 times higher over 100 years, the report said.

“Concern has been expressed with regard to the large quantities of water used by hydraulic fracturing, as well as the potential risks generated by shale gas operations, on the quality of such resources through groundwater or surface water contamination,” it said.

The report said the US Energy Information Administration estimated that in 2015, worldwide technical recoverable shale gas resources were about 215 trillion cu m, equivalent to about 60% of world consumption. About half of these resources are in Algeria, Argentina, Canada, China, and the US, it said.

Despite the availability of shale gas in several countries, the US remained the world’s leading shale gas producer in 2015 with 87% of the world total, the report said. It began a net gas exporter in July 2017, it pointed out.

“Furthermore, the large investments made to develop the liquefaction infrastructure in the US could lead the country to hold the third largest capacities by 2020, after Australia and Qatar. Such developments could potentially lead to globalization in the natural gas market which is currently regionalized,” the report said.

About the Author

Nick Snow

NICK SNOW covered oil and gas in Washington for more than 30 years. He worked in several capacities for The Oil Daily and was founding editor of Petroleum Finance Week before joining OGJ as its Washington correspondent in September 2005 and becoming its full-time Washington editor in October 2007. He retired from OGJ in January 2020.