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Shale gas is natural gas produced from shale, a type of sedimentary rock. Shale gas has become an increasingly important source of natural gas in the United States over the past decade, and interest has spread to potential gas shales in Canada, Europe, Asia, and Australia. One analyst expects shale gas to supply as much as half the natural gas production in North America by 2020.
Beach Petroleum Limited has announced plans to drill for shale gas in the Cooper Basin, South Australia.[1]
In July 2011, that vertical well was successfully "fracked" and flowed gas to the surface. The well is essentially the first positive production from shale gas plays in Australia.
Recent shale gas discoveries have caused a sharp increase in estimated recoverable natural gas in Canada.[2] The nation has a number of prospective shale gas targets in various stages of exploration and exploitation in British Columbia, Alberta, Saskatchewan, Ontario, Quebec, New Brunswick and Nova Scotia.[3]
One major area of exploration in Canada is north of Fort Nelson, in north east British Columbia. Encana and EOG Resources are developing the area known as Horn River due to its high yield shale deposits. A number of these well sites are serviced by Alberta fracturing companies, many of which, started out as a one person operation with the purchase of a cement truck.
This rapid expansion of shale gas in Canada is not without controversy. On March 8, 2011, the Quebec provincial government effectively declared a temporary moratorium on the use of chemical fracturing during shale gas drilling pending a stricter full environment assessment audit. Acting under recommendations from a provincial environmental assessment board, Quebec Minister of Environment Pierre Arcand stated that “We are committed to making sure that it is done properly or it won’t be done at all,”[4] The assessment board cites the chief concern of groundwater contamination with respect to the St. Lawrence valley, and recommended the audit in order to fully inform and involve communities and the public of the risks involved in shale gas exploitation in Quebec.[5]
China has set its companies a target of producing 30 billion cubic meters a year from shale, equivalent to almost half the country's gas consumption in 2008.[6] Potential gas-bearing shales are said to be widespread in China, although as yet undeveloped.[7] In November 2009, US President Barack Obama agreed to share US gas-shale technology with China, and to promote US investment in Chinese shale-gas development.[8]
China launched a national shale gas research centre in August 2010. Based on existing reports, China may have 30 trillion cubic metres of shale gas reserves.[9]
While Europe has no shale gas production as yet, the success of shale gas in North America has prompted geologists in a number of European countries to examine the productive possibilities of their own organic-rich shales.[10][11][12][13]
Norwegian company Statoil is in a joint venture with Chesapeake Energy to produce Marcellus Formation shale gas in the eastern US, and has indicated interest in bringing knowledge gained in the US to European shale gas prospects. Russian giant Gazprom announced in October 2009 that it may buy a US shale-gas producing company to gain expertise which it could then apply to Russian shale gas prospects.[14] In the Barnett Shale in Texas, French oil firm Total SA entered a joint venture with Chesapeake Energy, and Italy's ENI purchased an interest in Quicksilver Resources.
Potential host formations for shale gas in Europe include shales in northeast France,[15] the Alum Shale in northern Europe, and Carboniferous shales in Germany and the Netherlands.[16]
Exploration is underway in Austria, where OMV is working on a promising basin near Vienna.[6]
Еxploration is underway in Bulgaria, as Chevron signed 30 million contract for the exploration of shale gas deposit in Novi Pazar.[17] Additional five places will be studied in the near future.[18]
ExxonMobil holds 750,000 acres (3,000 km2) of leasehold in the Lower Saxony Basin of Germany, where it plans to drill 10 shale-gas wells in 2009.[19]
In 2009, ExxonMobil drilled the first wells for shale gas in the Makó Trough in Hungary.[20]
In Feb, 2011 Enegi Oil was given an option over 495-square kilometers in the Clare Basin, in west Ireland.[21]
As of 2010, Poland imports two-thirds of its natural gas from Russia. ConocoPhillips has announced plans to explore for shale gas in Poland,[22] along with Lane energy.[23]
The recently made available US Department of Energy report[24] revealed that the largest reserves of shale gas in Europe are in Poland. The authors of the report calculate that Poland has reserves of about 22.45 trillion cubic meters of shale gas, of which 5.30 trillion cubic meters is immediately available for extracting. Most of the shale gas is in Baltic Sea basin about 3.66 trillion cubic meters, about 1.25 trillion cubic meters within the region of Lublin Voivodeship, or Lublin Province, and next 0.4 trillion cubic meters in Podlaskie Voivodeship.
The companies such as BNK Petroleum, Talisman Energy, Marathon Oil, Chevron and ExxonMobil are actively drilling to find the potential new gas well sites. The region with the greatest shale gas potential in Poland is the Baltic Basin where leases have already been awarded to participating oil companies. The most active company in Baltic basin region is 3Legs Resources, subsidiary of Lane Energy Poland in a joint venture with ConocoPhilips. The results of first borings were announced on 21 June 2011. They showed large gas saturation in the well.[25]
Lublin Voivodeship is the basin bounded to the north by the Trans European Fault near Grójec, to the east by Polesie Lubelskie and to the south by the Ukrainian border.
The most active company in this region is Halliburton, which in September 2010 carried out the first drilling for the Polish consortium PGNiG. The results to date remain confidential. Six other firms have acquired concessions in that region including ExxonMobil, Chevron and Marathon Oil.
The last region with shale gas potential is the Podlaski basin, although exploration drilling in that area has not yet begun. The concession for this region has been acquired by Exxon-Mobil.[26][27][28][29][30][31][32][33]
Marathon Oil has extensive leasehold in Poland, which it intends to explore for Silurian-age shale gas.[34][35]
Previous reports indicated that Poland might have the large shale gas resources in Europe. If recent reserve estimates of a minimum of 3 trillion cubic meters are accurate,[36] Poland would have gas reserves of more than 200 times annual consumption, and more than 750 times Poland's current annual production (2009).[37]
Such shale gas resources would greatly boost the Poland proven reserves, and lessen the importance of gas imports from Russia.[38][39]
Royal Dutch Shell evaluated the viability of the Alum Shale in southern Sweden as a source of shale gas, but as of 2011 has decared that it is not viable and decided to abandon the operation.[40][41]
Eurenergy Resource Corporation has announced plans to drill for shale gas in southern England's Weald Basin.[42]
Shale gas has been discovered by a small firm, Cuadrilla Resources, close to the coastal resort of Blackpool, Lancashire at a depth of 4,000 ft (1,200 m) in Bowland shale. The extent of the gas field is not yet known. Further wells are to be drilled to determine the size of the field. It was hoped to start gas production in January 2012. However, as of June 2011 an investigation is under way to determine whether the drilling is linked to two small earthquakes on the Lancashire coast.[43]
In September 2011 Cuadrilla Resources announced that it had found 200 trillion cubic feet (5,700 km3) of gas under the ground in the Lancashire area. This find is more than 10 times the reserves known to exist under the UK's part of the North Sea - more than the total known in all UK fields. [44]
Following strong lobbying from Europe Écologie Euro MP José Bové against shale gas exploration in the Larzac area of southern France, the French government has suspended three gas exploration permits "until at least this summer". The Environment minister Nathalie Kosciusko-Morizet announced the creation of a commission charged with evaluating the environmental impact of shale gas production, adding "no authorizations for shale gas exploration will be given, or even considered, before the commission reports". The final report is expected in June 2011.[45]
Companies including Reliance Industries Limited (E&P), RNRL, have expressed interest in exploring for shale gas in India. Reliance Industries paid a reported US$1.7 billion for a 40% share in Atlas Energy's leasehold in the Marcellus shale gas play in the eastern US.[46] A complication to shale gas in India is that the government-issued leases for conventional petroleum exploration do not include unconventional sources such as shale gas.[47]
In August 2010, a delegation including the director-general of hydrocarbons and officials of the oil ministry is scheduled to meet in Washington with the US Geological Survey to discuss help in identifying and exploiting shale-gas resources in India. Basins of preliminary interest identified by Indian geologists are the Cambay Basin in Gujarat, the Assam-Arakan basin in northeast India, and the Gondwana Basin in central India.[48]
During US President Obama's visit to India in November 2010, India and US decided to cooperate in the fields of clean-tech and shale gas. "We agreed to deepen our co-operation in pursuit of clean energy technologies, including the creation of a new clean energy research centre here in India, and continuing our joint research into solar, biofuels, shale gas and building efficiency," Obama said.[49] In January 2011,India's biggest energy explorer Oil & Natural Gas Corporation ONGC has discovered the country's first shale gas reserve at Durgapur in Burdwan district of West Bengal. The gas reserve spread over 12,000 square km in the Durgapur-Ranigunj area - is the world's third shale gas find.[50] As per the initial studies, many shale sequences in well explored basins are found to be promising like Damodar, Cambay, and Krishna Godavari and Cauvery basins. The potentiality of these basins was also vetted by international experts.[51]
Shell Oil intends to explore for shale gas using hydraulic fracturing in the Karoo region of the Western and Northern Cape provinces. This is bitterly opposed by a coalition of environmentalists, farmers and local residents.[52]
The first commercial gas well drilled in the US, in 1821 in Fredonia, New York, was a shale gas well producing from the Devonian Fredonia Shale formation. After the Drake Oil Well in 1859, however, shale gas production was overshadowed by much larger volumes produced from conventional gas reservoirs.
In 1996, shale gas wells in the United States produced 0.3×1012 cu ft (8.5 km3), 1.6% of US gas production; by 2006, production had more than tripled to 1.1×1012 cu ft (31 km3) per year, 5.9% of US gas production. By 2005 there were 14,990 shale gas wells in the US.[53] A record 4,185 shale gas wells were completed in the US in 2007.[54] In 2007, shale gas fields included the #2 (Barnett/Newark East) and #13 (Antrim) sources of natural gas in the United States in terms of gas volumes produced.[55]
A study by MIT says that natural gas will provide 40% of America's energy needs in the future, from 20% today, thanks in part to the abundant supply of shale gas.[56] With 4% annual production growth expected between 2010 and 2030, shale gas has been "a veritable game changer" for the United States.[57]
Shale gas, especially from the Marcellus Shale, have tested up to 16% ethane content.[58] This low priced feedstock for ethylene synthesis has led to a "frenzy" of new ethylene plants in the US.[59]
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