Effects and Sustainability of the U.S. Shale Gas Boom


Currently only three countries are producing shale gas through hydraulic fracturing (fracking) on a commercial scale: the United States, Canada, and China. The United States is by far the dominant producer, with a new high of 32.9 billion cubic feet (bcf) per day in 2014.1 Key U.S. regions for shale gas mining are Pennsylvania, Louisiana, and Texas. Canada is a distant second, with 3.9 bcf per day of natural gas as of May 2014; most of that production takes place in Alberta and Saskatchewan.2 China is in third place, with currently only 0.25 bcf per day.3 The Chinese shale gas fields are located in the Sichuan Basin. All three of these countries increased their output in 2014—and at a higher rate than conventional gas.4

The United States is the only country where shale gas production not only accounted for a significant share of total natural gas production but, by end of 2013, surpassed per-day output from non-shale wells and became the dominant source.5 (See Figure 1.) This made the United States a leading nation in natural gas in spite of declining conventional production.6 (See Figure 2.) Russia still has the strongest natural gas reserves (see Figure 3), followed by Iran and Qatar.7 Global estimated technically recoverable resources of shale gas are 7,299 trillion cubic feet (tcf).8 These appear to favor a different set of countries: China (1,115 tcf), Argentina (802 tcf), Algeria (707 tcf), Canada (573 tcf), the United States (567 tcf), Mexico (545 tcf), and Australia (437 tcf).9 However, continued investigations can substantially reduce or increase current estimates, in particular of the fraction that can be economically retrieved. Shale resource exploration efforts are being undertaken in several countries, including Algeria, Argentina, Australia, Colombia, Mexico, and Russia.10 But for various reasons none of these have commercial-scale production so far.11 Important factors include the reserve's depth below the surface, the surface material (rock or soil), existing infrastructure, and current natural gas prices in the markets.

Shale Gas Figure 1


Shale Gas Figure 2


Shale Gas Figure 3


Given limited domestic conventional reserves, most European countries depend on imports for natural gas; while some receive most of their gas from Norway or Qatar, many East European countries get half or more of their gas from Russia, shipped via pipelines through Ukraine.12 The armed conflict in eastern Ukraine and European Union (EU) sanctions against Russia have led to calls for reducing or diversifying Europe's dependence on foreign energy sources.13 But in many cases recoverable quantities of shale gas in Europe remain uncertain, and supplies are located deeper underground, partly in densely populated areas. Additional factors such as ownership of mineral rights, taxation, and substantial environmental and safety concerns inhibit development of Europe’s shale gas resources, and in several countries there are ongoing discussions about fracking.

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