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US offers India technology to exploit shale gas news
26 August 2010

Washington: In a major initiative Washington has offered India and China its expertise in exploring and exploiting shale gas resources. The move is aimed at helping both nations considerably reduce their dependence on oil and gas imports.

Shale Gas
Briefing media representatives at the Global Shale Gas Initiative Conference here in Washington, David Goldwyn, the Obama administration's coordinator for International Energy Affairs, said, ''Coincident with prime minister Singh's visit to the US, we launched a memorandum of understanding with India on shale gas.

And we have proposed... that the US Geological Survey (USGS) do a resource assessment of certain shale basins in India.''

Goldwyn said that the USGS would also train Indian geophysicists to enable them to professionally assess shale resources. This cooperation, he said, would be within the overall ambit of the US-India Strategic Dialogue.

"What we have offered to India is to bring our best knowledge about how you make that estimate, how you make that resource evaluation, and to bring our scientists to them to talk about that," Goldwyn said.

"We are waiting for India's reaction and we're hopeful that they'll do it.''

Seventeen nations, including India and China, are participating in the two-day international conference hosted by the US State Department.

Goldwyn said effective tapping of shale gas by the US had transformed global energy markets, resulting in a decrease in the global prices of liquefied natural gas.

This successful exploitation was possible because the United States has developed technology to efficiently tap large quantities of gas from shale. 

"Gas has become cheaper. Gas is now competitive with coal on a BTU basis, which means that countries that might use coal can now not make an economic choice, but on a competitive basis choose gas for their next level of power generation," Goldwyn said.

" (Indian company) Reliance has made an investment in a US company to learn the technology, and what a lot of countries are doing is they're trying to find out how it's done.

"So it'll depend on success and, in India in particular, depend on the price of gas," Goldwyn said.

India will conduct a licensing round, probably in September.

Shale gas has to be extracted from deep reserves that, till recently, were inaccessible because of absence of necessary technology. On the negative side costs of drilling are still higher than that associated with conventional gas and there are worries about contamination of drinking water.

The US is offering technological cooperation at a global level in a bid to develop shale gas resources world-wide in a bid to provide a cleaner alternative to coal.

This fossil fuel is one of prime causes of high levels of carbon emissions which is responsible for what is popularly termed global warming.

It is also one of the most commonly used energy fuels in the fast-growing economies of China and India.

Interestingly, shale gas has now also become a handy tool in geo-political considerations. In Europe, for example, shale gas has the potential to help this continent reduce its reliance on Russia, a prime exporter of oil and natural gas resources.

Twice in recent times Europe has had to face the brunt of a shut-down in gas supplies as Russia and Ukraine faced-off with each other over payment related and other disputes.

Russian oil and gas supplies travel through Ukrainian territory on their way to Western European markets.

Further elaborating on the reasons for US technological cooperation Goldwyn said, ''The main reasons for doing it are national security and climate security.''

''In Eastern Europe in particular, it's really diversity of supply. It's a national security issue,'' Goldwyn said.

''For China and India, it's both climate security and economic security, because they have large demand for resources and the market is volatile,'' he said.

Last year, for the first time in decades, the United States overtook Russia as the world's top gas producer.

''In this country it's entirely possible, if things continue on trend, that we would have the ability to export gas extracted from shale,'' Goldwyn said.

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US offers India technology to exploit shale gas