The Brazilian government’s first-ever auction of natural-gas concessions whose development might involve hydraulic fracturing, or fracking, has caused an uproar among environmentalists, scientific and water-service associations, congressmen and federal watchdog authorities. Many of these critics are calling for a moratorium on development of so-called unconventional gas reserves, which are contained in shale formations, until the risks of fracking are better known.

Until now, the regulatory National Oil Agency (ANP) has auctioned offshore and onshore gas concessions that call for development of the conventional kind, in which gas is extracted by drilling vertically into reservoirs. But a Nov. 28 auction allowed for the possibility of fracking, which involves drilling horizontally through shale formations and injecting large quantities of water, toxic chemicals and sand at high pressure to fracture the rock and release the gas.

The ANP estimates that in five of Brazil’s largest onshore basins there could be 515 trillion cubic feet of unconventional gas. The U.S. Energy Information Administration says Brazil has the 10th largest recoverable shale-gas reserves (245 trillion cubic feet), with China, Argentina, Algeria, the United States, and Canada in that order, having the highest potential.

Bids total $71 million

As a result of the Nov. 28 auction, domestic and foreign bidders agreed to pay R$165.2 million (US$71 million) to work 72 of 240 onshore blocks, mainly in three sedimentary basins in which there are indications of conventional and unconventional gas deposits.

The state oil company Petrobras, alone or in consortia, won concessions to 49 of the blocks. Eight domestic and four foreign firms, in consortia with Petrobras or bidding alone, also bought concessions to work a smaller number of blocks. The four foreign companies that won bids were GDF Suez of France, Petrominerales of Colombia, Trayectoria Oil & Gas of Panama, and GeoPark of Bermuda.

Opposition to shale-gas development began in August, when the ANP announced the auction. On Aug. 5, the Brazilian Society for Scientific Progress (SBPC) and the Brazilian Academy of Sciences (ABC), the two most prestigious scientific associations here, asked President Dilma Rousseff to declare a moratorium on auctioning shale-gas concessions.

“Many of the shale-gas concessions being auctioned in Paraná state are located in sedimentary basins below the Guarani Aquifer, a major source of South American drinking water, and should be evaluated with caution because of the risk of contaminating this aquifer,” they said in a letter. “So we ask that you suspend the auctioning of concessions for shale gas exploration. It makes no sense to do so without more information and a better understanding of the properties of these gas reserves, the conditions needed to explore them, and the environmental consequences of doing so.”

The 1.2-million-square-kilometer (460,000-sq-mile) Guarani Aquifer, one of the largest freshwater reserves in the world, extends into sedimentary basins in five western, southeastern and southern Brazilian states, where it provides irrigation as well as industrial and drinking water. Around one-third of the aquifer reaches into Argentina, Uruguay and Paraguay. In Brazil, the aquifer extends through the Paraná Basin in the states of Paraná and São Paulo, where the ANP auctioned 16 concessions for conventional and unconventional gas. The ANP also sold 53 concessions in the Reconcavo and Sergipe/Alagoas basins in northeastern Brazil where there are smaller but sizeable aquifers, also supplying local populations.

Lack of study decried

Jailson de Andrade, a member of the SBPC board of directors and a professor of chemistry at the Federal University of Bahia, argues that careful study should have preceded concession sales. “Unless you know the quality of the water in those aquifers before shale gas extraction is done, you can’t tell whether such extraction has contaminated them with methane or toxic chemicals,” he says. “Nor has the ANP studied what to do with the 70%-80% of water that is laced with toxic chemicals and, after being injected to extract the shale gas, returns to the surface as flowback water which can’t be reused indefinitely.”

Such calls have been echoed by critics ranging from Greenpeace Brazil to the Brazilian Association of Sanitary and Environmental Engineers (ABES). On Nov. 28, Antonio Manvailer, a federal prosecutor in Piauí State, filed a civil suit to suspend shale-gas development. And at a Dec. 5 hearing in the Chamber of Deputies, the lower house of Congress, Green Party member José Sarney Filho presented a bill that would impose a five-year moratorium.

For its part, the ANP argues there is time to ensure ample safeguards are in place. Said President Magda Chambriard in an interview with EcoAméricas: “The ANP will, in early 2014, approve rules regulating shale-gas exploration and production. This won’t represent a regulatory delay because companies won’t begin such exploration for a number of years.”