Fracking: Should India Dive into the Shale Boom?

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The energy economics of the world is now at a crossroads, giving rise to a fiery debate among experts whether it will bring about a momentous change in the world’s strategic balance. The Ukraine crisis has given an impetus to it by threatening a cut in the supply of Russian oil and gas to Europe; the West is now on the lookout for an alternative source of energy. With the United States making rapid progress in the area of shale oil and gas technology, and several large-scale shale reserves being discovered in Western Europe and Latin America, dependence on hydrocarbon supplies from the Middle East and the Persian Gulf will decrease, which will ultimately lead to a lapse in big power involvement in the region. This has all come as a boon to American companies involved in the exploitation of shale resources, and they are leaving no stone unturned in sweeping away the impediments to their business expansion.

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Now the big question is whether India can take advantage of these technological advancements, as she also has commercially viable shale reserves.

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But there is a flip side to the shale revolution. Environmentalists worldwide have protested against the exploitation of shale resources, arguing that it may cause serious ecological harm as the process involves use of poisonous chemicals. Even officials in India’s Ministry of Environment and Forests voiced opposition in inter-ministerial meetings convened to consider the draft policy on the use of shale technology. There are also allegations in the United States that many of these companies engaged in shale exploitation are not divulging their modus operandi, making it difficult to know the true extent of environmental impact.

More transparency can help if shale is to solve the world’s longstanding energy problems and geopolitical overreliance on the Middle East. Last year the World Bank was hopeful that oil prices would fall under $102 per barrel. Although the projection seemed a bit optimistic, it cannot be denied that the Western world has moved towards energy self-sufficiency, and the emerging energy situation may not be as bleak as it has been made out to be. While the US has been increasing its domestic crude oil production – recording a jump of 1.4 percent in 2012 – Canada is sitting on a massive reserve of two trillion barrels. Production has also been growing in various other Central and South American countries like Brazil, Columbia and Mexico. Read on ...