Culture 6 min read

Could the Algerian Shale Gas Dream die Stillborn?



This article is an Op-Ed and part of our Local Issues writer series. In this piece, Algerian author Zayan (Zed) Guedim discusses the burgeoning Shale Gas industry in his community.

The U.S. Department of Commerce’s ITA (International Trade Administration) thinks shale gas is “a best prospect industry sector” for American companies looking for investment opportunities in Algeria.

With 707 trillion cubic feet (20  trillion cubic meters) of technically recoverable reserves, Algeria’s shale gas resources are the third-largest in the world, after China and Argentina.

For decades, the hydrocarbon sector has been the backbone of the Algerian economy. The rising and falling trends of oil prices have always shaped the socio-political landscape in the country. The state-owned Sonatrach has become the largest company in Africa thanks to oil and natural gas exports.

But it was only a matter of time before the Algerian government started teasing shale gas as a pièce de resistance in a menu already stuffed hydrocarbons. In Algeria, it’s all about maintaining uninterrupted the cash flow from hydrocarbon exports. Other issues are often deprioritized, including environmental protection.

Read More: Why Algerian Fossil Fuel Investments are a Waste

Until recently, shale gas resources remained untapped underneath the Algerian desert. But things are changing. Sonatrach has signed several agreements with international oil companies to develop shale gas resources. These deals would also evaluate the technical and economic feasibility of extraction projects.

It might be the wrong time for the Algerian regime to play the shale gas card. But let’s first have a look at what is shale gas and what’s so controversial about it.

What is Shale Gas?

Shale gas is a natural gas contained within rock formations deep underneath the surface. Sedimentary rocks with low permeability act as a reservoir for shale gas, predominantly methane, which is a potent heat-trapping gas, even worse than carbon dioxide.

Shale gas is extracted by drilling several miles deep, then making a 90° turn and continue drilling horizontally through shale formations.

The extraction techniques seem to be the main source of the controversy surrounding shale gas, namely hydraulic fracturing, or fracking.

Although very effective, fracking for shale gas requires large volumes of water, up to 16 million gallons (over 60,000 m³) per well. Sometimes, to free the trapped gas, they have to make cracks using a mixture of water, sand, and chemicals forced down the drilling pipe.

Economically-Attractive, Environmentally-Loathed

Why Algeria is shelling out money on shale gas now?

Oil-producing countries have been fearing the rise of shale gas industry because it would eventually hurt their bottom line. Algeria is an OPEC member (Organization of the Petroleum Exporting Countries) and a major natural gas exporter. But at the same time, it holds the third-largest shale gas reserves in the world.

Algeria seems to be looking ahead for a near future where shale gas fully enters the global energy scene. In other words, any losses incurred from dropping oil and gas prices (because of shale gas!) would be offset by shale gas exports.

To develop its shale gas industry, Algeria is soliciting the expertise of major oil companies. American companies have mastered horizontal drilling and hydraulic fracking techniques and they’re willing to cooperate with Algeria.

In Algeria and internationally, some believe that Sonatrach and American oil corporation Exxon Mobil have established a “dirty” business relationship and they’re looking for opportunities to develop it.

Instead of spending money on the development of green energy resources, which abound in the country, Sonatrach prefers the immediate security of conventional, and now “unconventional”, hydrocarbons. In 2018, Sonatrach acquired Exxon’s Augusta refinery in Italy for about $1 billion.

Back in March, Reuters reported that the ongoing political transition in Algeria forced Exxon and Sonatrach to hold off on signing a deal to develop a shale gas field in the southwestern Ahnet basin. The partnership would have also involved Norway’s Equinor and Britain’s BP.

But months later, Sontarach is now back with another shale gas connoisseur, Chevron Corp. Just a few days ago, it was announced that Sonatrach and Chevron held talks around potential investment opportunities. While it wasn’t officially stated, some believe it’s about shale gas.

Shale gas would be a substantial source of cash for the regime to pay for social stability. Especially now as the political unrest is at its highest level.

The potential economic impact of shale gas on the Algerian energy industry and on the quality of life of local communities can’t be denied. Sure, shale gas exploration and extraction projects will support the creation of many jobs and generate tax revenues.

But can we afford the environmental cost?

In addition to short-term economic gains, shale gas also has the potential for several long-term adverse effects. For example, the effects on human health, freshwater reserves and aquifers, seismic activity and climate change are have not been fully studied and are not completely understood.

Once the drilling process is done, some of the fracking fluid seeps into underground aquifers. This increases the likelihood that this contaminated water flows back to the surface as wastewater. Fracking wastewater is loaded with contaminants like salts and metals, and other substances are not fit for human or animal consumption. How might this affect agriculture?

In a recent study, researchers at Yale School of Public Health evaluated data on 1,021 chemicals used in fracking. The team analyzed 240 substances and found that “157 of them — chemicals such as arsenic, benzene, cadmium, lead, formaldehyde, chlorine, and mercury — were associated with either developmental or reproductive toxicity.”

Algeria’s Shale Gas Amid Social and Political Pressures

Long before the ongoing Algerian “Hirak Movement” forced talks with Exxon to falter, Algerian rallied against shale gas.

Back in 2015, protests erupted against the Algerian government shale gas exploration project. Locals from nearby oases and villages stormed the drilling site run by the American Halliburton near the town of Ain Salah. In a region where freshwater resources are already scarce, water-intensive fracking would make things worse.

The peaceful demonstrations continued uninterrupted daily for over two months until the government had to pull the plug on its plans.

Now, as the “Revolution of Smiles” is raging on, it seems to be even harder to pass off shale gas projects as a boon for the economy more than a “corruption” opportunity. During the demonstration held every Friday since last February 22 nd, Algerians showed a level of eco-awareness that wouldn’t tolerate shale gas.

Read More: The Growing Pains of the Algerian Energy Transition

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Zayan Guedim

Trilingual poet, investigative journalist, and novelist. Zed loves tackling the big existential questions and all-things quantum.

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