Shale gas

Shale gas

Key facts

  • Shale gas is emerging as the new low-cost source of natural gas in North America.
  • In Canada, potential and producing shale gas resources are found in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick and Nova Scotia. Most of the current drilling and production activities are occurring in northeast British Columbia in the Montney and Horn River shale basins.
  • Natural gas is a relatively clean-burning, abundant and efficient source of energy. It has become a popular fuel for residential, commercial and industrial applications.
  • Natural gas is an important transition fuel for a low-carbon economy, because it is cleaner burning than any other fossil fuel and is in abundant supply. Current research estimates that the natural gas supply in North America, largely in the form of shale gas, will last more than 100 years.
  • Natural gas offers the potential to replace fuels that produce more greenhouse gases (GHGs) and that are currently used for power generation, heating and transportation. For example, GHG emissions from natural gas combustion are approximately 30 percent cleaner than those from oil and 45 percent cleaner than those from coal.
  • Technological advancements in drilling (long-reach horizontal well bores) and completion techniques (multistage hydraulic fracturing) have allowed commercial production of natural gas from shales, which has increased the long-term outlook for the supply of natural gas in North America.
  • Hydraulic fracturing has been used by the industry to safely stimulate oil and gas production in North American conventional reservoirs for more than 60 years.
  • Although shale gas development is a relatively mature industry in the United States (with more than 40 000 producing wells), shale gas is still in its nascent stages in Canada.

Frequently asked questions

Who regulates shale gas development?

Under Canada’s Constitution, provinces own onshore resources within their borders and are responsible for regulating their development.

What is Natural Resources Canada’s role in shale gas development?

Natural Resources Canada provides geoscience information used in making exploration, resource management and environmental protection decisions.

Shale gas exploration techniques

Exploring for shale gas requires traditional petroleum exploration methods combined with specialized studies unique to shale gas deposits.

Key facts

  • 2D and 3D seismic reflection profiles continue to be indispensable tools for characterizing the geometric parameters of exploration sites, such as the depth and internal variations within a shale deposit.
  • Drilling is essential for ascertaining the host rock’s physical and chemical characteristics and assessing the quality and quantity of the resource.
  • The initial assessment of shale gas potential includes a study of such parameters as organic-material content and nature, thickness, thermal maturity and the geometry of the succession.
  • Among the studies specific to shale gas exploration, the mineralogical and geotechnical characterization of the unit that controls its ability to undergo hydraulic fracturing is essential. Quantification of the respective portion of free gas (in fractures and nanopores) and of adsorbed gas (fixed on organic molecules and clays) is equally important.
  • Pilot projects are generally carried out to demonstrate the economic viability of development.

Frequently asked questions

What are the effects of a seismic survey?

During a ground seismic survey, the reflection along rock planes of acoustic waves generated by vibrator trucks or small buried dynamite charges is recorded. Except for the small noise and vibrations generated during the procedure, a seismic survey has no effect on farming, forestry or other human activities.

How long could exploration last before the development phase?

The time needed to develop shale gas ranges from a few years to more than a decade. Shale gas exploration in the United States shows that the learning curve varies widely from one sedimentary basin to another. Experience has shown that the parameters for optimum hydraulic fracturing (drilling orientation, fluids used, etc.) are specific to each shale deposit. Therefore, the pace of development depends largely on technological outcomes.

Shale gas drilling and fracturing techniques

Shale is a low permeability rock, and gas found in it can be produced economically in commercial quantities only by using horizontal drilling and hydraulic fracturing.

Key facts

To increase the volume of shale in contact with the well bore, a vertical well is initially drilled from the surface and progressively deviated horizontally through the target rock unit. The horizontal section of the well bore is usually from 1 to 3 kilometres (km) long.

  • After drilling is completed and multiple layers of metal casing and cement are placed around the well bore, a fluid is injected under high pressure to crack the shale, increase the permeability of the rock and ease the flow of natural gas.
  • Horizontal drilling is now a standard method for extracting gas from shale, because it allows the hydraulic fracturing to be concentrated on a single rock unit and considerably increases the volume of fractured material along the well bore. After the hydraulic fracturing, the horizontal and vertical sections of the well bore act as a drain for the gas.
  • Hydraulic fracturing is caused by injecting pressurized water that is usually mixed with a small volume of sand and additives. Multistage hydraulic fracturing makes it possible to considerably increase the permeability of gas-rich rock units at the periphery of the horizontal well bore, because it creates small fractures that extend vertically between 100 and 200 metres (m) at the most.

Frequently asked questions

How does hydraulic fracturing work?

During hydraulic fracturing, pressurized water is injected into the rock unit. Sand (proppant) is added to the water during hydraulic fracturing to prevent the artificially created micro-fractures from closing under the force of the high pressures that exist at great depths. The fractures thus remain open and allow the gas to escape. Additives (generally representing less than 1 percent of the fluid injected) are used for several purposes, mostly to increase the viscosity of the injected fluid, optimize post-fracturing water recovery or protect the production pipe casing from corrosion.

At what depth is hydraulic fracturing carried out?

The depth of shale deposits varies enormously. For example, in the St. Lawrence Lowlands, the Utica Shale is present at depths ranging from 500 m (in the west) to more than 3000 m (in the east). In general, economic production occurs where shale is deeply buried (between 1 and 3 km), because in situ high-pressured rocks are needed to help with gas movement in the subsurface. Hydraulic fracturing is permitted only well below the deepest freshwater aquifers.

Geology of shale gas in North America

Shale gas represents a growing segment of natural gas production in North America. The rapid increase in this type of unconventional gas production is accompanied by exploration projects in a growing number of sedimentary basins in the United States and Canada. For example, various stages of shale gas exploration activities are underway in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick and Nova Scotia. The assessment of shale gas potential has led to a complete redrawing of the North American energy map.

Key facts

Potential shale gas-producing units exist in many sedimentary basins surrounding the North American shield.

  • These units of fine-grained sedimentary rocks called shale originally had high organic matter content, which has been transformed into natural gas.
  • Significant differences exist between units with shale gas potential, particularly with regard to their age, mineralogy and thickness and the respective proportion of free gas (present in fractures and nanopores) and adsorbed gas (fixed to the surfaces of organic molecules and clays).
  • The natural gas is either of deep, thermogenic origin (derived from the thermal transformation of liquid hydrocarbons on burial) or of shallow biogenic origin (derived from the near-surface decay of organic material by bacteria).

Frequently asked questions

How is shale gas formed?

Hydrocarbon systems are composed of three key elements: a source rock rich in organic material, a reservoir rock characterized by variable porosity and permeability and a cap rock that acts as a seal. Shale gas is an unconventional system in which all three elements of a hydrocarbon system are found in a single rock unit. Artificial stimulation techniques specific to this type of hydrocarbon system are needed to increase gas flow to commercially viable rates because of the very low permeability of these shales.

Why was shale gas not developed in the past?

Shales that host gas have very low permeability, which reduces their ability to naturally flow gas. The extraction of gas at commercially viable rates has become possible only because of the recent combination of two techniques: horizontal drilling and multistage hydraulic fracturing. The repeated fracturing of the rock volume adjacent to the well bore’s horizontal section allows the release of economic volumes of natural gas.

Geology of shale gas in Quebec

Shale gas exploration has reached an unprecedented level in Quebec, with industry reporting initial high production rates from exploration wells in the St. Lawrence Lowlands area.

Key facts

  • The Utica Shale holds tremendous potential for producing natural gas. The overlying unit also has shale gas potential, although it has not been demonstrated yet.
  • The Utica Shale is defined by age (about 460 million years) and lithology. Similar rock units are present from North Carolina in the south to Newfoundland and Labrador in the north. The actual explored domain for this unit is limited to the south shore of the St. Lawrence River, from Québec to upstate New York.
  • This shale is sporadically exposed at surface along the St. Lawrence River’s north shore between Québec and Trois-Rivières and is buried at progressively greater depths eastward. It is relatively rich in organic carbon (e.g. plant and animal matter) and is generally 100 to 200 metres thick.
  • The Utica Shale has a different mineralogy with higher carbonate content (e.g. carbonate rocks include limestone) and is older than most other North American shale gas deposits

Frequently asked questions

When was the Utica shale gas potential discovered?

The presence of natural gas in the Utica Shale has been known for several decades. Geological research and exploratory drilling for deeper conventional hydrocarbon reservoirs documented high organic-carbon content and significant gas kicks in the Utica Shale. However, gas flow rates were considered too low for commercial viability. Technological advancements in recent years increased the economic viability of exploring for shale gas in Quebec.

Is there potential for discovering liquid hydrocarbons?

Liquid hydrocarbons include natural gas liquids or condensates – such as ethane, propane and butane – and liquid oils. There is potential for discovering liquid hydrocarbons, although it is restricted to narrow zones near the surface. For most of the St. Lawrence Lowlands, the Utica Shale was buried under more than 5 kilometres of sediments. At these depths, the temperature is sufficient to convert organic matter and liquid hydrocarbons into gas. More than 350 million years of erosion have brought the Utica Shale to shallower depths, making the gas accessible.

Economic impact of shale gas development

The development of shale gas has the potential to make significant economic contributions and provide affordable and relatively clean energy for Canadians. Economic benefits include

  • lease and royalty payments to the provincial governments that own the resources
  • macroeconomic benefits including improved employment, investment, tax revenues and trade balances, with a reduced dependence on imported energy

Key facts

Canada

  • The oil and gas sector is a major contributor to the Canadian economy, currently contributing more than 500 000 direct and indirect jobs across Canada.
  • The Canadian Energy Research Institute anticipates that the oil and gas industry will contribute more than $3.5 trillion to the Canadian economy over the next 25 years.
  • In 2008, the oil and gas industry paid more than $28 billion in royalties to provincial governments.

Provinces: for example, Quebec

  • Upstream oil and gas development has invested more than $200 million in Quebec since 2007.
  • Quebec spends approximately $2 billion per year importing natural gas to meet 11 percent of its energy demand.
  • At current consumption rates, and given estimates of shale gas resources, Quebec could have sufficient natural gas for decades.

Frequently asked questions

What is the estimated value of Quebec’s Utica Shale gas resource?

With an estimated recoverable resource between 18 and 40 trillion cubic feet1 if fully developed, Quebec’s shale gas deposits would have a market value2 between $70 billion and $140 billion at current natural gas prices.

How do governments affect the pace of shale gas development?

Federal and provincial governments seek to provide efficient regulatory and competitive fiscal frameworks to attract investment. Provinces may tailor their royalty structure to attract shale gas development. Final investment decisions are taken by private industry.

Greenhouse gas emissions from shale gas

Lifecycle greenhouse gas emissions from Canadian shale gas are approximately 4% higher than from conventional natural gas production and use.

Key facts

  • Lifecycle analysis considers all significant greenhouse gas emissions from all stages of production, processing, transportation, and use of a fuel to provide a complete carbon footprint. Natural Resources Canada’s GHGenius lifecycle analysis tool was used to model the lifecycle greenhouse gas emissions of shale gas.
  • Shale gas in Canada produces on average 4% higher lifecycle greenhouse gas emissions than average Canadian conventional gas3. For the two major shale gas developments currently underway, the results are 1% lower than from conventional gas for the Montney play and 10% higher than from conventional gas for the Horn River play. The large difference is due to the unusually high carbon dioxide content in the Horn River play.
  • Production results from early stages of Canadian shale gas development indicate that these wells will be highly productive, and the incremental emissions produced during horizontal drilling and hydraulic fracturing will be small when spread over the expected lifetime production of a shale gas well.

Frequently asked questions

Does shale gas really produce more greenhouse gas emissions than coal?

No. In fact, similar to conventional gas, shale gas produces much lower emissions than coal. For comparison, electricity generated from a gas-fired turbine will result in approximately 56% fewer lifecycle greenhouse gas emissions than from a coal-fired power plant and approximately 55% fewer emissions if the turbine is fired by Canadian shale gas.

What about the impact of methane emissions from drilling and hydraulic fracturing?

Some studies on greenhouse gas emissions from shale gas claim that large volumes of methane, a potent greenhouse gas that is the main component of natural gas, are vented to the atmosphere during well construction. This is unlikely in Canada for environmental, economic, and safety considerations, and most provinces that have significant gas production also have initiatives to reduce venting of gas. Most gas produced during this stage is captured and either flared or gathered for processing and sale. Once the well is completed, the gas is processed the same way as gas produced by conventional wells, so fugitive methane emissions will be no different.

Overall, what are the greenhouse gas emission implications of increasing shale gas production, versus conventional gas production, in Canada? 

Most prospective shale gas plays have low carbon dioxide content, similar to typical conventional gas production. Therefore, as more shale gas development occurs, the greenhouse gas emissions per unit of shale gas produced and consumed should be similar to that from conventional natural gas production and use.

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1Le développement du gaz du schiste au Québec – Document technique, 15 septembre 2010, ministère des Ressources naturelles et de la Faune.
2Assuming market value of $4/gigajoule, close to current prices in eastern Canada.
3 Shale Gas Update for GHGenius, S&T Squared Consultants Inc, August 31, 2011.