The Shale Gas Revolution

Jane Van Ryan
Posted April 7, 2011

There's a revolution occurring in the United States, and it is spreading throughout the world. It is the shale gas revolution, and it has the potential to alter the global energy picture for many years to come. It began a few years ago when Texas oil man George Mitchell had a hunch that he could produce natural gas from the Barnett Shale formation in the Dallas-Ft. Worth area. Although some geologists were skeptical, Mitchell discovered that gas could be produced by using a combination of horizontal drilling and hydraulic fracturing. When other energy companies learned of his success, they improved on his innovation and helped to create a new industry and thousands of jobs across the country.

In a recent Wall Street Journal article, energy expert Daniel Yergin noted that shale gas accounted for about 1 percent of U.S. natural gas supplies in 2000; today it accounts for 25 percent and could rise to 50 percent within two decades. Yergin says the so-called "shale gale" also has cut the cost of this clean-burning energy resource by about half during the past three years.

Now the shale revolution is poised to move into other countries. A study commissioned by the U.S. Energy Information Administration (EIA) and conducted by Advanced Resources International looked at shale gas formations in 32 countries and found that together they could boost worldwide natural gas supplies substantially. It identified an estimated 5,760 trillion cubic feet of technically recoverable gas in 70 shale gas deposits outside the United States. U.S. shale gas deposits are estimated at 862 trillion cubic feet, enough to meet domestic demand for about 100 years.

"Adding identified shale gas resources to current estimates of other gas resources increases total world technically recoverable resources by over 40 percent, to more than 22,000 trillion cubic feet," said EIA Administrator Richard Newell in a statement. The statement also says this estimate is likely to be "quite conservative."

The potential benefits of the shale gas revolution are huge. As Yergin points out, having ample supplies of cleaning-burning natural gas could change the world's energy mix and result in lower carbon emissions. Yergin says shale gas could become "a highly competitive alternative to both nuclear and wind power and even to coal generation," adding that "the United States has among the largest shale gas resources in the world, [so] it's conceivable that the nation could export natural gas and achieve greater energy security."

Other countries are following the shale gas developments here in the United States. Recently a Chinese company announced its intention to invest heavily in the Eagle Ford formation in Texas to learn more about the technologies used in shale gas production. The EIA study shows that China's shale gas formations could hold an estimated 1,275 trillion cubic feet of natural gas. (Financial Times)

U.S. political leaders, including the president, also recognize the societal, economic and environmental benefits of natural gas production. In his energy speech last week, President Obama said, "Recent innovations have given us the opportunity to tap large reserves-perhaps a century's worth-in the shale under our feet. The potential here is enormous." We agree.