Shale gas buried underground is estimated to increase recoverable gas in the world by 50%. Shale oil would allow oil reserves to expand by 10%. The US Energy Information Administration changed its estimates after a new study where it took into account twice as many oil and gas fields than in 2011.
Unconventional treasure: Shale gas is trapped deep inside rock formations.
Shale gas is a new and abundant source of natural gas, trapped in rock formations. Oil companies have known about it for decades but always dismissed it because it was too expensive and difficult to extract.
In the past few years new technologies that pump water underground to fracture the rock and free the gas have been perfected. The breakthrough has opened a new frontier for the energy industry and turned long-held assumptions about the world’s dwindling supplies on their head.
via Shale gas blasts open world energy market on Propurchaser
The energy revolution experienced by the United States for the past ten years will not come to Europe anytime soon. Members of the European Union are indeed very divided on the issue of the exploitation of non-conventional energy resources.
In November 2012, after 3 studies published earlier by the European Commission which concluded that Europe would not reach energy self-sufficiency, the European Parliament invited to comment on the development of shale gas, was unable to pass a binding resolution. In the end, the two resolutions adopted in Strasbourg just called for the Member States to exercise caution in this area because of environmental constraints.
A binding resolution encouraging to explore or exploit shale reserves would probably not have had a majority of votes because of many European MPs opposition, as risks associated with shale gas extraction are not perceived in the same way throughout Europe.
China seeks to develop its massive shale gas resources. After giving two sets of exploration licenses to oil and gas companies, it hopes to keep the momentum going. The Minister of Land and Resources said he intended to shortly allocate new licenses, without giving any timeframe.
This week, 19 exploration areas were distributed to 16 Chinese companies. Foreign companies were allowed to participate in the auction through joint ventures, but none were successful. The winners agreed to invest at least 13 billion yuan (1.56 billion euros) in the next three years.
Ed Davey, the Secretary of State for Energy and Climate Change, has lifted restrictions on the controversial practice of shale gas hydraulic fracturing, giving a green light to drilling, in a country that consumes the most gas in the EU but where conventional gas reserves are dwindling.
From a net exporter, the UK has become an importer. Promises of shale gas from Cuadrilla Resources, a small British company, could increase energy independence. Some hope that domestic shale gas production could reduce prices by 2% to 4% from 2021. But there is a world between promises and reality.
The European Parliament voted last Wednesday two resolutions calling on the EU countries to exercise restraint on the development of shale gas. It calls for “strong regulatory regimes” regarding hydraulic fracturing, the biggest point of contention regarding the exploitation of shale gas. European countries are advised to be “cautious” when granting new licenses.
This is important, considering that shale gas exploitation has drastically driven US gas prices down and has started to impact other industries. The resolutions adopted in Strasbourg are not binding, and the decision to operate or not unconventional reserves remain under the sovereignty of European Member States. France banned hydraulic fracturing, while Bulgaria and the Czech Republic have declared a moratorium. Poland, meanwhile, will take advantage of its large shale gas reserves to reduce its dependence from natural gas imports from Moscow.
Plunging prices have turned the U.S. into one of the most profitable places in the world to make chemicals and fertilizer, industries that use gas as both a feedstock and an energy source. And they have slashed costs for makers of energy-intensive products such as aluminum, steel and glass.
“The U.S. is now going to be the low-cost industrialized country for energy,” the energy economist Philip Verleger says. “This creates a base for stronger economic growth in the United States than the rest of the industrialized world.
On September 7th 2012, the European Commission published three new studies on unconventional fossil fuels, in particular shale gas. The studies look at the potential effects of these fuels on energy markets , the potential climate impact of shale gas production , and the potential risks shale gas developments and associated hydraulic fracturing (“fracking”) may present to human health and the environment .
It had been hoped that the controversial fracking technique could allow Europe to match the US’s success in extracting natural gas from shale rocks. Now the European Commission says that, at best, Europe’s shale gas will only compensate for its slowing production of conventional gas. Europe will still have to import 60 per cent of its needs.
The National Development and Reform Commission, China’s Ministry of Finance, the Ministry of Land and Resources (MLR), and the National Agency Energy on March 13, 2012 jointly published the first five-year plan for development of shale gas in China for 2011–2015.
Production targets are ambitious and emphasize the need for foreign cooperation, particularly in technology, to allow the growth of this economic sector .
As France takes the path of experimentation on shale gas, many European countries have launched investigations for future exploitation. But Bulgaria, Germany and the UK recently froze all exploration.
After commissioning a study on the various regulations and procedures relating to the exploration and exploitation of shale gas in Poland, France, Germany and Sweden, the European Commission estimated that there was no need to introduce new regulations at European level.
According to the institution, in the four countries studied, laws already cover the various issues raised (legal, financial, safety, water, noise …). However, Günther Oettinger, European Commissioner for Energy, previously estimated that harmonization of standards is needed because the situation is very different from one country to another.