Indonesia to review compliance in move that could affect mine output
Indonesia said it will check miners' compliance with environmental rules and "re-examine" production quotas for those found to be in breach.
Much of Saudi Arabia’s conventional natural gas is produced as a by-product of the crude oil extraction. Nearly all is then re-injected back into the well in order to maintain the reservoir pressure. What little may remain is allocated to industrial projects such as petrochemical expansion.
The result of all of this is that there is very little natural gas to be used in power plants for electricity generation, so Saudi Arabia has had to use large amounts of oil to burn in the power plants, and this volume has been increasing as the energy demands of the growing economy have increased.
The shale boom in the US has opened up the possibility of a new source of potentially cheap and abundant natural gas for Saudi Arabia, which could be used as a source of power generation, freeing up more oil for export.
Recent comments made by the Saudi Arabian oil minister, Ali Al-Naimi, has suggested that Saudi Aramco will soon begin to explore the country’s shale gas resources; resources that are estimated to be in the region of 600 trillion cubic feet.
One major problem stands in the way of a Saudi shale boom that was not as much of an issue in the US, the fact that huge amounts of water are needed for the fracking process, a resource that is in very short supply in the Middle East.
Already the water demand from cities and industry in Saudi Arabia exceeds the available supply from aquifers, leading to the requirement of 27 desalination facilities which deliver nearly 300 billion gallons of water each year. Each hydraulically fractured shale well requires several million gallons of water, raising a small question about the logic of pursuing such a technology in such a dry country.
There are a few methods that can reduce the amount of water needed for fracking. The US frackers, especially around the Marcellus shale play in Pennsylvania, recycle between 10% and 30% of all water injected into the wells; using nitrogen foam mixed in with the fracking fluid can also reduce the amount of water needed; and finally tests have been made in Canada on the possibility of using gelled propane as a form of waterless fracking.
By James Burgess of Oilprice.com
