WRI Says 38% of World’s Shale Resources Facing Water Stresses

Sep 02, 2014 4:45 am ET

Sept. 2 (Bloomberg) -- A new analysis shows 38 percent of the world’s shale resources in places such as China, Mexico and South Africa face high to extremely high water stress or arid conditions, according to the World Resources Institute.

Water availability shortcomings could potentially limit shale resource development in every continent except Antarctica, the Washington-based WRI research group said today in a report released at the World Water Week event in Stockholm.

Nations at highest potential risk and biggest technically recoverable shale gas resources include China, with the world’s largest commercially viable shale gas resources, as well as India, WRI said. The U.S. was in the medium-to-high category and Argentina and Canada in the low-to-medium ratings. Pakistan was in the worst or extremely high category.

“Water risk is one of the most important but under- appreciated challenges when it comes to shale gas development,” said Andrew Steer, president and chief executive officer of WRI. “With 386 million people living on land above shale plays, governments and business face critical choices about how to manage their energy and water needs.”

China has the biggest commercially viable shale gas resources “but over 60 percent of those resources are in areas with high water stress or arid conditions —- a worrying fact given the country’s existing environmental concerns,” WRI said.

‘The Complexity’

Compare China to others “and the complexity of this water- energy tradeoff becomes clear,” WRI said. “Argentina is shale- rich with the world’s second-largest technically recoverable shale gas resources. And we found only low-to-medium stress for 72 percent of its shale resources.”

In countries like the U.K., “it’s more complicated,” the WRI said. “The U.K. is Europe’s third-largest natural gas producer but it’s densely populated and 34 percent of its shale resources face high water stress.”

The Global Shale Gas Development: Water Availability and Business Risk report is the first publicly available analysis of water availability across all potential commercial shale gas and tight oil resources worldwide, according to the WRI.

As fracking requires up to 25 million liters (6.6 million gallons) of water per well, shale resources can be tougher to develop where water is hard to find, WRI said. As a result, governments and energy-related businesses developing shale gas may face intense water competition in the largest reserves.

‘Wakeup Call’

“This analysis should serve as a wakeup call for countries seeking to develop shale gas,” Steer said. “Energy development and responsible water management must go hand-in-hand.”

With countries such as the U.S. and Brazil already enduring arid conditions and water stresses, “this report can help to ensure that there’s enough water available for industries, farms and people even if shale development advances,” said Paul Reig, the WRI report’s lead author.

The report ranked water stress across 20 countries with the largest shale resources. The WRI’s baseline water-stress level included Poland, France and Ukraine in the low-to-medium level, Australia, Russia and Venezuela in the low water-stress category, and Algeria for its exposure to arid conditions.