Climate

Mexico’s methane emissions threaten the environment

Sunday, July 16, 2017

Mexico is in transition towards commercial exploitation of its shale gas, which is being included in two auctions of 24 hydrocarbon blocks, at a time when the country is having difficulty preventing and reducing industrial methane emissions.

Increasing atmospheric release of methane, which is far more polluting than carbon dioxide (CO2) and which is emitted along the entire chain of production, is threatening the climate goals adopted by Mexico within the Paris Agreement which aims to contain global warming.

“Shale gas is the last gas that is left to exploit after reserves that are easier to access have been used up. Its production entails higher economic, environmental and energy costs. It is practically impossible for a shale gas well to be non-polluting,” researcher Luca Ferrari, of the Geosciences Institute at the state National Autonomous University of Mexico (UNAM) told.

The state-run but autonomous National Hydrocarbons Commission (CNH) issued a resolution on Jun. 22 calling for bids for the two auctions of 24 blocks of gas and oil in five basins, located in the north, southeast and south of the country. For the first time, shale gas reserves are included. Bidding will take place on Jul. 12, and total estimated reserves of 335 million barrels are being offered.

By refraining from producing non-conventional fuels (like shale gas) itself, the government is partially opening the energy sector to participation by private enterprise to supply the country’s industrial gas needs.

Mexico’s energy reform, introduced in August 2014, opened up exploitation, refining, distribution and sales of hydrocarbons, as well as electricity generation and sales, to national and foreign private sectors.

In shale gas deposits, hydrocarbon molecules are trapped in sedimentary rocks at great depths. Large quantities of a mixture of water, sand and chemical additives, which are harmful to health and the environment, have to be injected to recover shale gas and oil.

The “fracking” technique used to free shale gas and oil leave huge volumes of liquid waste that has to be treated for recycling, as well as methane emissions that are more polluting than CO2, the greenhouse gas responsible for most global warming.

Mexico, shale superpower

An analysis of 137 deposits in 41 countries by the U.S. Energy Information Administration (EIA) puts Mexico in sixth place worldwide for technically recoverable shale gas reserves, behind China, Argentina, Algeria, the United States and Canada, with reserves of 545 trillion cubic feet. The country occupies seventh place for shale oil.

However CNH quotes more moderate estimates of probable reserves, of the order of 81 trillion cubic feet.

“Current regulations are based on best practices, but the philosophy of environmental protection has been abandoned. Exploitation is deepening inequities in a negative way, such as environmental impact. It is irresponsible to auction reserves without a proper evaluation of environmental and social impacts,” researcher Ramón Torres, of UNAM’s Development Studies Programme, told IPS.

In March, the national Agency for Industrial Safety and Environmental Protection, responsible for regulating the hydrocarbons sector, published a regulatory package on exploitation and extraction of non-conventional reserves.

The regulations identify the risks of fracking fluid leaks, heightened demand for water, pollution caused by well emissions of methane and other volatile organic compounds, pollution caused by toxic substance release and by the return of injected fluid and connate water to ground level from the drill hole.

The regulations indicate that 15 to 80 percent of fracking fluid returns to the surface, depending on the well. As for atmospheric pollutants, they mention nitrogen oxides, benzene, toluene, methane and coal.

Measures are imposed on companies, such as verifying the sealing of wells, applying procedures for preventing gas leaks, and disclosing the composition of drilling fluids. Gas venting is prohibited, and burning is restricted.

Since 2003, Petroleos Mexicanos (PEMEX) has used hydraulic fracking – applicable not only to shale extraction – to drill at least 924 wells in six of the country’s 32 states, according to CartoCritica, a non-governmental organisation. At least 28 of these were confirmed to be of non-conventional crude.

Gas emissions

Within this context, Mexico faces problems in reducing methane emissions.

In 2013 the country emitted 126 million tonnes of methane into the atmosphere, of which 54 million were from the stock rearing sector, 31 million from oil and gas, and 27 million from waste products. The rest was from electricity generation, industry and deforestation. Use of gas for electricity generation contributed at least 0.52 million tonnes.

Mexico, Latin America’s second largest economy, emitted a total of 608 million tonnes of CO2 during the same year.

Pemex Exploration and Production, a subsidiary of the state PEMEX group, reported that in 2016 its total methane emissions were 641,517 tonnes, 38 percent higher than the previous year.

Shallow water undersea extraction contributed 578,642 tonnes, land based fields 46,592 tonnes, hydrocarbon storage and distribution 10,376 tonnes, gas fields not associated with oil fields 5,848 tonnes, and non-conventional fields 57 tonnes.

In 2016, PEMEX changed the way it reported emissions of CO2 and other greenhouse gases (GHG). Previously these volumes were reported by production region, making comparative analysis difficult.

In 2015, the Northeast Marine Region comprising the Gulf of Mexico, where the largest underwater oil deposits are located, emitted 287,292 tonnes.

The emissions reduction was presumably associated with reduced fossil fuel production due to a fall in international prices and PEMEX’s own lack of financial resources.

But between 2012 and 2014 emissions increased by 329 percent, leaping from 141,622 tonnes to 465,956 tonnes, presumably because of increased venting and burning of gas (whether or not associated with crude oil wells). PEMEX lacked the technology for gas recovery.

By reducing venting and burning, PEMEX was able to reduce its emissions between 2009 and 2011, after GHG emissions grew from 2007 to 2009.

In Ferrari’s view, the problem is a technical and economic one. “The first step is to prevent venting,” but that requires investment, he said.

According to the Global Gas Flaring Reduction Partnership (GGFR) led by the World Bank, in 2015 Mexico burned 5 billion cubic metres of gas, putting it in eighth place in the world, the same as for venting intensity, the relation between cubic metres of gas burned to barrels of oil produced.

The aim of the GGFR is to eradicate such practices by 2030.

Mexico is one of 24 goverrnments participating in the initiative, together with French Guiana and Peru in the Latin American region. Thirty-one oil companies – not including PEMEX – and 15 multilateral financial institutions are also involved. The World Bank will publish its first report on burning and venting gas this year.

Torres and Ferrari agree that the volume of gas produced by hydraulic fracking will not be sufficient to satisfy domestic demand.

“The volume that can be exploited is small and insufficient,” said Torres. Ferrari’s calculations indicate that shale gas would only supply domestic needs for 10 months.

In May Mexico produced 5.3 billion cubic feet of gas per day, and imported 1.79 billion cubic feet. Meanwhile, it extracted 2.31 million barrels of crude per day.

In the same month, the Energy Ministry updated its Five Year Plan for Oil and Gas Exploration and Extraction 2015-2019 and set a new target to auction reserves of nearly 31 billion barrel equivalents of non-conventional fuels.

Fracking expands under the radar on mexican lands

“People don’t know what ‘fracking’ is and there is little concern about the issue because it’s not visible yet,” said Gabino Vicente, a delegate of one of the municipalities in southern Mexico where exploration for unconventional gas is forging ahead.

Vicente is a local representative of the community of Santa Úrsula in the municipality of San Juan Bautista Tuxtepec, some 450 km south of Mexico City in the state of Oaxaca, where – he told IPS – “fracking is sort of a hidden issue; there’s a great lack of information about it.”

Tuxtepec, population 155,000, and another Oaxaca municipality, Loma Bonita, form part of the project Papaloapan B with seven municipalities in the neighbouring state of Veracruz. The shale gas and oil exploration project was launched by Mexico’s state oil company, Pemex, in 2011.

Papaloapan B, backed by the governmental National Hydrocarbons Commission (CNH), covers 12,805 square kilometres and is seeking to tap into shale gas reserves estimated at between 166 and 379 billion barrels of oil equivalent.

The project will involve 24 geological studies and the exploratory drilling of 120 wells, for a total investment of 680 million dollars.

But people in Tuxtepec have not been informed about the project. “We don’t know a thing about it,” said Vicente, whose rural community has a population of 1,000. “Normally, companies do not provide information to the local communities; they arrange things in secret or with some owners of land by means of deceit, taking advantage of the lack of money in the area.”

Shale, a common type of sedimentary rock made up largely of compacted silt and clay, is an unconventional source of natural gas. The gas trapped in shale formations is recovered by hydraulic fracturing or fracking.

Fracking involves the massive pumping of water, chemicals and sand at high pressure into the well, a technique that opens and extends fractures in the shale rock deep below the surface, to release the natural gas on a massive scale.

The process generates large amounts of waste liquids containing dissolved chemicals and other pollutants that require treatment before disposal, environmental organisations like Greenpeace warn.

The U.S. Energy Information Administration (EIA) puts Mexico in sixth place in the world for technically recoverable shale gas, behind China, Argentina, Algeria, the United States and Canada, based on the analysis of 137 deposits in 42 countries. And Mexico is in eighth position for technically recoverable shale oil reserves.
A map of the areas of current or future fracking activity in Mexico, which local communities say they have no information about. Credit: Courtesy of Cartocrítica

A map of the areas of current or future fracking activity in Mexico, which local communities say they have no information about. Credit: Courtesy of Cartocrítica

Fracking is quietly expanding in Mexico, unregulated and shrouded in opacity, according to the non-governmental Cartocrítica, which says at least 924 wells have been drilled in six of the country’s 32 states – including 349 in Veracruz.

But in 2010 the study “Proyecto Aceite (petróleo) Terciario del Golfo. Primera revisión y recomendaciones” by Mexico’s energy ministry and the CNH put the number of wells drilled using the fracking technique at 1,323 in Veracruz and the neighbouring state of Puebla alone.

In the northeastern state of Tamaulipas, where 100 wells have been drilled, Ruth Roux, director of the Social Research Centre of the public Autonomous University of Tamaulipas, found that farmers who have leased out land for fracking knew nothing about the technique or its effects.

“The first difficulty is that there is no information about where there are wells,” Roux told IPS. “Farmers are upset because they were not informed about what would happen to their land; they’re starting to see things changing around them, and they don’t know what shale gas or fracking are.”

While producing the study “Diagnosis and analysis of the social impact of the exploration and exploitation of shale gas/oil related to culture, legality, public services, and the participation of social actors in the states of Coahuila, Nuevo León and Tamaulipas”, Roux and her team interviewed five sorghum farmers and two local representatives from four municipalities in Tamaulipas.

The researcher said the preliminary findings reflected that locals felt a sense of abandonment, lack of respect, lack of information, and uncertainty. There are 443 homes near the 42 wells drilled in the four municipalities.

The industry sees the development of shale gas as strategically necessary to keep up production levels, which in April stood at 6.2 billion cubic feet per day.

But according to Pemex figures from January 2014, proven reserves of conventional gas amounted to just over 16 trillion cubic feet, while shale gas reserves are projected to be 141 trillion cubic feet.

By 2026, according to Pemex projections, the country will be producing 11 billion cubic feet of gas, 45 percent of which would come from unconventional deposits.

The company has identified five basins rich in shale gas in 11 states.

For the second half of the year, the CNH is preparing the tender for unconventional fossil fuel exploitation, as part of the implementation of the energy reform whose legal framework was enacted in August 2014, opening up electricity generation and sales, as well as oil and gas extraction, refining, distribution and retailing, to participation by the domestic and foreign private sectors.

The historic energy industry reform of December 2013 includes nine new laws and the amendment of another 12.

The new law on fossil fuels leaves landowners no option but to reach agreement with PEMEX or the private licensed operators over the occupation of their land, or accept a court ruling if no agreement is reached.

Vicente said the law makes it difficult for communities to refuse. “We are worried that fracking will affect the water supply, because of the quantity of water required and the contamination by the chemical products used. When we finally realise what the project entails, it’ll be a little too late,” he said.

Local residents of Tuxtepec, who depend for a living on the production of sugar cane, rubber and corn, as well as livestock, fishing and trade, know what it is to fight energy industry projects. In 2011 they managed to halt a private company’s construction of the small Cerro de Oro hydroelectric dam that would have generated 14.5 MW.

The formula: community organisation. “We’re organising again,” the local representative said. “What has happened in other states can be reproduced here.”

Papaloapan B forms part of the Veracruz Basin Integral Project, which would exploit the shale gas reserves in 51 municipalities in the state of Veracruz.

Pemex has already drilled a few wells on the outer edges of Tuxtepec. But there is no data available.

Farmers in Tamaulipas, meanwhile, “complain that their land fills up with water” after fracking operations, and that “the land isn’t producing like before,” said Roux, who added that exploration for shale gas is “a source of conflict…that generates violence.”

The expert and her team of researchers have extended their study to the northern states of Nuevo León and Coahuila, where 182 and 47 wells have been drilled, respectively.

Each well requires nine to 29 million litres of water. And fracking uses 750 different chemicals, a number of which are harmful to health and the environment, according to environmental and academic organisations in the United States.



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