THE energy industry’s worst kept secret is out: techniques to bust open shale deposits have unleashed a mammoth new resource of natural gas in the world. And the latest assessment, by its authors’ own admission, is likely to get much larger.
The new study by the US’ Energy Information Administration (EIA) found almost 6,000 trillion cubic feet (cf) of technically recoverable shale-gas reserves in 32 countries. The figure excludes the US, where rapid application of hydraulic fracturing and horizontal drilling has seen shale-gas production rise from 390bn cf in 2000 to 4.87 trillion cf in 2010 – or almost a quarter of the country’s total dry-gas output.
But the study did not measure the resource in Russia and countries in the Middle East – between them home to the bulk of the world’s conventional gas. The EIA said its priority was to assess the resources in regions without large existing reserves, but that “potentially productive shales exist in Russia and most of the countries of the Middle East”. Data from some basins were also inadequate, it said, and the study did not include coal-bed methane or tight gas.
Adding the 5,760 trillion cf of technically recoverable shale gas to its estimate of US reserves, the EIA thinks the total figure to be 6,622 trillion cf. Adding this total to the global conventional gas resource, the EIA reckons total technically recoverable reserves to be 22,600 trillion cf, or 40% higher than it previously thought.
But the EIA admits even these figures may be conservative. As well as ignoring large shale deposits thought to exist in gas-rich Russia and the Middle East, the EIA said the resource assessment covered only “higher quality, prospective areas” of each formation. The administration also “risked” each play to account for flow-rates and its view of how much land in a given basin would be open for drilling. “No doubt, future exploration drilling will lead to adjustments in these two risk factors and thus the ultimate size of the developable international shale gas resource,” the study said.
So ample upside exists. Indeed, the study concluded that the total shale-gas resource outside the US – including reserves not yet considered technically recoverable, or able to be extracted using commercial techniques and according to existing rules – amounts to more than 22,000 trillion cf.
It also noted that much of this resource exists in countries “with limited conventional gas supplies or where the conventional gas resource has largely been depleted, such as in China, South Africa and Europe”. Europe has also spent the past decade gripped with worries over the security of its gas supplies from Russia.
“For these countries, shale-gas development could significantly alter their future gas balance, which may motivate development,” the study said, citing France, Poland, Turkey, Ukraine and South Africa as examples.
These countries will hope to repeat a fraction of the US’ shale-gas success. There, shale-gas reserves now account for more than a third of the country’s total, and half of the lower 48 states’ resources, the EIA said. Shale gas will the largest contributor to the projected growth in gas production, it added, forecasting that by 2035 output will meet almost half of the US’ total.
Comparing continents, the study estimates that Asia’s risked, technically recoverable resource of 1,404 trillion cf is greatest, followed by South America (1,225 trillion cf). Derek Brower, London