Thursday, April 7, 2011

World Shale Gas Resources Outside US Assessed

by Guntis Moritis, OGJ Production Editor, OGJ, Apr 6, 2011
Initial estimated technically recoverable shale gas resources in the 32 countries assessed in an Apr. 5 report is 5,760 tcf compared with the 862 tcf in the US. The report was commissioned by the US Energy Information Administration from Advanced Resources International Inc. (ARI). [Please see remarks below -- D.R.]

The report includes 48 shale gas basins in 32 countries, containing almost 70 shale gas formations.

EIA noted that world proved reserves of natural gas as of Jan. 1, 2010, are about 6,609 tcf [please see my post "World's Top 22 Natural Gas Proven Reserve Holders...," here. -- D.R.] and world technically recoverable gas resources are about 16,000 tcf, largely excluding shale gas. Thus, adding the identified shale gas resources to other gas resources increases total world technically recoverable gas resources by more than 40% to 22,600 tcf [i.e., 5,760 tcf + 862 tcf + 16,000 tcf -- D.R.].

EIA said these shale reserves are uncertain given the relatively sparse data that currently exist and the approach ARI employed would likely result in a higher estimate once better information becomes available.

At the current time, efforts are under way to develop more detailed shale gas resource assessments by the countries themselves, with many of these assessments being assisted by several US federal agencies under the auspices of the Global Shale Gas Initiative (GSGI) which was launched in April 2010.

EIA explained that shale gas development was more likely to emerge for two company groupings.

The first group consists of countries such as France, Poland, Turkey, Ukraine, South Africa, Morocco, and Chile that are highly dependent on natural gas imports, have at least some gas production infrastructure, and their estimated shale gas resources are substantial relative to their current gas consumption. South Africa also could use shale gas as feedstock for its existing gas-to-liquids and coal-to-liquids plants.

The second group consists of countries with more than 200 tcf of shale gas resource such as Canada, Mexico, China, Australia, Libya, Algeria, Argentina, and Brazil, [that already produce substantial amounts of natural gas].

The report did not include Russia and Central Asia, Middle East, Southeast Asia, and Central Africa primarily because of existing significant quantities of conventional natural gas reserves in place (Russia and the Middle East) or because of a general lack of information for even an initial assessment. [Full story]

(Please see EIA overview, World Shale Gas Resources: An Initial Assessment of 14 Regions Outside the United States, April 5, 2011, here. And/or please see especially Table 1: Estimated Shale Gas Technically Recoverable Resources for Select Basins in 32 Countries, Compared to Existing Reported Reserves, Production and Consumption during 2009, here. In 2010, US shale gas production reached 4.87 trillion cubic feet/tcf, constituting 23 percent of total US natural gas production, compared with 0.39 tcf in 2000. This shows both the rapid growth and absolute importance of the shale gas resource to the United States. Rising production from shale gas resources has been credited with both lower natural gas prices and declining dependence on imported natural gas. As is often the case with resource development, shale gas production also has raised local environmental concerns, largely centering on the amount of water used in the fracturing process and the need to handle, recycle, and treat fracturing fluids in a manner that addresses the risk of spills that can potentially affect water quality. EIA's Annual Energy Outlook 2011 Reference case also reflects the growing importance of US shale gas. It projects that shale gas will account for about 46% of US natural gas production in 2035---please see U.S. EIA, Today in Energy, Apr 5, 2011, here. For exploration of shale gas in Poland, please see my post "Marathon, Nexen to Jointly Explore Shale in Poland," here. For shale gas in Europe, please see my post "World Watch [Shale Gas Development in Europe]," here. For China's quest for unconventional gas, please see my post "China Plans to Exploit its Shale Gas Resources," here. For Mexico's first shale gas production, please see, inter alia, here. -- D.R.)

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