Last week Argentina’s oil and gas giant YPF announced that it had found 4.5 trillion cubic feet of gas in the southern province of Neuquén.
You can see my article about it here.
While YPF’s unconventional gas find is the biggest of its kind in South American history, other companies already had beat YPF to the punch and found unconventional gas in the country.
Unconventional gas is akin to traditional gas, except that it’s twice as expensive to obtain because its harder to get out of the ground. Companies often have to drill down thousands of feet, and horizontally, to get the gas, which is embedded in rock or sand formations that can be hundreds of millions of years old.
To extract the gas, they use a new technique called hydraulic fracturing, or “fracking.” This allows for the extraction of gas from shale rock and deep sands. The process entails injecting fluids into deep rock or sand formations at very high pressures to break up the rock and free up the gas.
So-called “tight gas” is simply gas that is locked in largely impermeable tight rock or sand formations.
Fracking has revolutionized the gas industry in the U.S., where unconventional gas already accounts for more than a third of the total gas market. And many people are hoping it will similarly change the industry in Argentina, which has only about eight years left of natural proven gas reserves.
The lack of gas in Argentina, coupled with year after year of rising demand, has forced Argentina to import gas from Bolivia and Trinidad & Tobago.
Fracking, however, may soon make that unnecessary. The country is experiencing a boom in the exploration and production of unconventional gas.
But critics say there’s a catch. (more…)