Now that Santos has acquired a majority share in East Star, in Australia extraction can begin on the largest natural gas reserves in the country. This may seem like a trivial point on the global energy scene, but the agreement in question will have consequences that go well beyond the local geographical context in which they are happening. Santos-a multinational with liquid natural gas (LNG) exploration and distribution projects in Indonesia, Egypt, Vietnam and India-has paid 500 million Euros for drilling rights to the reserves in New South Wales belonging to East Star-millions of cubic meters just waiting to be tapped. But the exploration and extraction methods being used are extremely invasive.
And in this the US has led the way. Halliburton and ConocoPhillips are at the forefront of natural gas extraction since the US is investing huge amounts of capital on natural gas as an alternative to oil and nuclear power. Analysts predict that half the US gas supply will come from shale by 2020. Research in this area Is not just an economic revolution, but part of a very deliberate energy policy aimed at reducing dependence on traditional suppliers like Russia, Algeria, and Libya. A Rice University study has concluded that increases in production in the US, Canada, and unexplored territories of Oceania will help prevent Russia and the Gulf countries from dictating prices on gas exports to European countries. The Obama administration has publicized natural gas as a green and inexpensive way to free the US from imports. But drilling comes at a cost-a very high cost.
Shale is sedimentary rock that breaks along parallel layers. The gas-trapped at depths of more than a thousand meters-is extracted using methods that have a devastating impact. Tons of pressurized water mixed with sand and chemical substances is shot into the wells. The technique is known as "fracking," or hydraulic fracturing. Since the fracturing is done horizontally, several horizontal wells are needed in place of the single vertical well of traditional drilling.
Now farmers in New South Wales are going to feel the environmental impact of hydraulic fracturing exploration. Few of them will protest-unless they want to happen to them what happened to actor Mark Ruffalo, who organized a screening of Josh Fox's "GasLand" (which was nominated for an Oscar) at the Sundance Film Festival. The documentary tells of the disasters that occurred as a result of shale gas extraction by Halliburton in Pennsylvania. Ruffalo was labeled a "terrorist" and ended up on a government watchlist.
Translated by Gary Cestaro