Shale Gas in Canada

Table of Contents

Introduction3

Discussion4

Deposition and Formation of Shale Gas4

Techniques and Technology used in the Recovery of Shale Gas6

Shale Gas versus Alternative Fuels7

Market for Shale Gas9

Conclusion10

References12

Shale Gas in Canada

Introduction

Shale gas has been described as a “game changer” in the energy industry. Shale, a fine grained clastic rock composed of silt (4 to 62.5 microns in size) and clay-sized (< 4 microns) particles. Based on mineralogy major shales types include: siliceous shale (silica rich), calcareous shale (carbonate rich), argillaceous shale (rich in clay minerals) and carbonaceous shale (rich in carbon/ organic content). Carbonaceous shale, rich in organic matter which consists mostly of remains of plants and animals, settle to the bottom of lakes or oceans. Anoxic environmental conditions allow sediments to preserve their original organic matter.

Organic shale is estimated by the Energy Information Administration Annual Energy Outlook 2011 to contain 826 trillion cubic feet (Tcf) of Canada's 2,543 Tcf of potential Shale gas resources. The research was conducted by US Energy Information Administration. That estimate more than doubled the previous year's estimate and is projected to continue to increase (www.eia.gov/forecasts/aeo/). Production of hydrocarbons from shale had previously been deemed uneconomic, but recent technological innovations in extended reach horizontal drilling and multistage hydraulic fracturing have significantly improved the economics of production from shale reservoirs.

Energy Information Administration Annual Energy Outlook 2011 also claimed that production of shale gas (natural gas) in Canada from shale reservoirs increased at an average annual growth rate of 48% for the 2006-2010 period and is further projected to make up 47% of total Canadian Shale gas production by 2035 (www.eia.gov/forecasts/aeo/). Investors have bet on shale production in a big way by pouring capital into the development of shale resources and inducing a flurry of drilling activity. The increased demand for shale resources has also commanded large premiums for leasing rights which provide legal access to the hydrocarbons. The implications associated with unsustainable economics of the vast shale resources in Canada and the world, are enormous.

Discussion

Deposition and Formation of Shale Gas

It is believed that massive seas covered present day land masses from time to time. The deposition of the organic matter in these ancient seas along with clay, silt, and sand are believed to be the origins of the oil and gas that we extract today. Shale gas and oil are extracted over millions of years when organic debris, such as algae, plants, and animals, are deposited in an oxygen deprived environment, such as a seabed (Luke and Soucy, 2008). One could imagine the remains of dead plankton, fish, algae, and other microscopic organisms drifting to the bottom of a relatively calm body of water. Because of the oxygen deprivation, the organic matter does not completely decay and is preserved. Over time, the matter got buried and with sediment, such as clay, silt, and sand, surrounding land is eroded by weather. It is then carried by rivers to the sea where it settles to the seabed in the calmer water.

Tidal forces can also aid in the ...