Algeria's shale gas dreams are a nightmare for locals

#Algeria

Algeria's vast energy resources could solve its domestic problems, but the environmental consequences threaten its Saharan communities

Kieran Cooke's picture
Sunday 5 March 2017 12:12 UTC
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In theory, the project looks like the ideal solution to many of Algeria’s problems.

According to the US government’s Energy Information Administration, Algeria has vast shale oil and gas resources with an estimated 5.7 billion recoverable barrels of shale oil and the biggest shale gas deposits in the world after those of China and Argentina.

'All energy sources, whether conventional or not, are a gift from God and it is our duty to use them for the development of the country'

- Algerian President Abdelaziz Bouteflika

The idea, brewing for the past four years, has been to tap into these so-called unconventional energy resources, using them not only to earn billions of dollars in exports to Europe and elsewhere, but also to feed an increasingly energy-hungry domestic market. The Algerian government has said it would commit $70bn to the shale project.

“All energy sources, whether conventional or not, are a gift from God and it is our duty to use them for the development of the country,” says Abdelaziz Bouteflika, Algeria’s ageing president.

Yet after considerable hype and several years of planning, little has so far happened - with the government seemingly unable or unwilling to confront various environmental, political and security factors hindering exploration operations.

Excess exploitation

The desert town of In Salah is deep in the Sahara, about 1,000 km southeast of Algiers, with a population of a little over 30,000 people in the area who are mostly dependent on nomadic style agriculture.

In 2014 the state-owned – and politically powerful – Sonatrach oil and gas conglomerate drilled two exploratory shale gas wells near the town. The results were described as “very promising” and evidence of “resources that were vital to exploit” by the then Energy Minister Youcef Yousfi.

Local people did not share the government’s enthusiasm for shale exploration. In moves which seemingly caught the government by surprise, thousands gathered in In Salah and nearby towns in early 2015 to protest.

Drilling for shale deposits – a process called hydraulic fracturing or fracking – involves pumping millions of litres of water together with chemicals and sand deep underground at high pressure; shale rock is then fractured, releasing gas and oil.



Algeria is among the driest countries on earth with availability of freshwater per head of only 300 cubic metres per year, compared to more than 8,000 litres per head in the US and over 2,000 in the UK.

People living in the south of Algeria depend for almost all their water on pumping supplies from an aquifer system deep under the Sahara.

Demonstrators said shale drilling would rob local people of water and chemicals could pollute the aquifer – already under threat from excess exploitation of its resources.

Police and troops were moved in as the demonstrations intensified. There were sit-ins at foreign oil installations.

'We are not people to be experimented on. All we have is our water – we need it to water our crops and feed our animals'

- Anti-fracking protestor

Demonstrators were not only angry about the environmental consequences of fracking; for many years, people in the south have felt ignored in terms of economic and social development.

Though the southern territories of Algeria make up nearly 90 percent of the country’s total area, they only contain nine percent of the population.

“We are not people to be experimented on,” said one protester. “All we have is our water – we need it to water our crops and feed our animals.”

The government accused demonstrators of being in the pay of unnamed foreign powers. Tear gas was fired; several protesters were injured. Many were arrested and subsequently jailed.

Amnesty International has told Middle East Eye that the last of the demonstrators jailed as a result of the In Salah protests was released at the end of 2016.



Impending obstacles

The government is clearly nervous about further trouble; Yousef Yousfi lost his position as energy minister in mid-2015, reportedly over his mishandling of the demonstrations.

His successor, Salah Khebri, lasted in office little more than a year before being replaced by the present incumbent, Nouredine Bouterfa.

The shale gas project faces other obstacles. While Algeria has a highly developed oil and gas sector, its fracking industry needs both foreign expertise and capital in order to get off the ground.

The demonstrations could be one reason why most foreign entities have so far seemed reluctant to be involved, but security concerns are another factor.

In early 2013, 40 employees at a gas plant in the south operated by Norway’s Statoil along with BP and Sonatrach were killed in an attack by Islamist militants who had reportedly come over the border from Libya.



A gas field in the Algerian desert town of In Amenas, jointly operated by British oil giant BP, Norway's Statoil and Algerian state-run Sonatrach where employees were taken hostage and killed by militants (AFP)

Another gas plant, near In Salah and operated by the same companies, was attacked by al-Qaeda last year with a rocket propelled grenade though this time no casualties were reported.

Worries about climate change and a growing movement in Europe away from fossil fuels is also causing some investors concern.

Algeria itself has been experiencing changes in its climate, hit by an unusually high number of heatwaves in recent years. Rainfall patterns across the North Africa region have become more erratic.

Investors jittery

Economic factors might also be dissuading foreign companies from rushing to take advantage of Algeria’s abundance of energy. Oil and gas accounts for about 60 percent of government revenues and more than 95 percent of export earnings. This makes Sonatrach by far the most powerful economic force in the land.

Oil and gas accounts for about 60 percent of government revenues and more than 95 percent of export earnings

Over the years the state-owned behemoth has jealously guarded its control over the country’s energy wealth; despite various re-organisations and reforms, Sonatrach still insists on maintaining a majority share in all oil and gas projects, a ruling which tends to act as a further disincentive to foreign investment.

More generally, there are concerns about overall political stability in the country. Bouteflika, now 79 and president for the past 17 years, is very rarely seen in public after a series of strokes.

There are rumours of an intense power struggle developing, with doom-mongers warning of the potential for another 1990s style civil war, in which up to 200,000 are believed to have been killed.

The government is increasingly strapped for cash, with oil revenues dropping 40 percent since mid-2014 due to the fall in prices. Existing non-shale fossil fuel resources are being depleted and production in many areas static or declining.



Algerians demonstrate against the exploration of shale gas in the desert village of In-Salah on 5 March, 2015 (AFP)

Attempts to save money by cutting back on a system of subsidies for power, water and food products risks provoking more public unrest.

Why not go solar?

Some energy experts say that rather than sinking billions of dollars into shale development, Algeria should be following Morocco’s example in investing in renewable energy, particularly solar power.

However, the domestic subsidy regime, which means that electricity prices in Algeria are among the cheapest in the MENA region, acts as a disincentive for solar investors and plans for solar power exports to Europe are still at a very early stage.

Meanwhile, the demonstrations in the south over shale gas have died down but the protesters are still active. Mohad Gasmi played a key role in mobilising opposition to the sinking of shale wells in the In Salah region.

In a recent interview with the climate change action group 350.0rg, Mohad said people in the south would no longer tolerate being ignored and marginalised.

“We have the mechanism for action and the people who are willing to act,” he said.

“The moment a shale well appears, we will be there, protesting.”

Kieran Cooke is a former foreign correspondent for the BBC and the Financial Times, and continues to contribute to the BBC and a wide range of international newspapers and radio networks.

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Eye.

Photo: A road sign near an accomodation compound belonging to Algeria's Sonatrach oil company in Tiguentourine, in Algeria's deep south on 19 January 2013 (AFP).

This article is available in French on Middle East Eye French edition.