Shale Adds 47% to Gas Reserves, Could Fuel For a Decade
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
Global shale resources increase the world’s total gas reserves by 47 percent and oil reserves by 11 percent, said a U.S. government report released Monday, and are vast enough to cover more than a decade of energy consumption.
Global shale resources increase the world’s total gas reserves by 47 percent and oil reserves by 11 percent, said a U.S. government report released Monday, and are vast enough to cover more than a decade of energy consumption.
In an initial assessment of shale oil resources and an update of shale gas reserves, the U.S. Energy Information Administration estimated there were some 345 billion barrels of “technically recoverable” shale oil reserves in 41 countries it surveyed, representing 10 percent of the world’s crude oil supplies.
The government report also said there is 10 percent more shale gas in the world than it estimated in 2011 – amounting to 7,299 trillion cubic feet of gas, which could boost natural gas resources by 47 percent.
The report seeks to quantify the potential global significance of the shale boom, after the exploitation of North American shale deposits transformed the U.S. oil and gas industry.
Monday’s assessment indicated that Russia has the largest recoverable shale oil resource, followed by the U.S., China, Argentina and Libya – collectively accounting for more than 63 percent of the world’s total.
The top six countries in terms of recoverable shale gas resources – China, Argentina, Algeria, the U.S., Canada and Mexico – account for more than 60 percent of the world’s recoverable shale gas resources.
Related: Russia To Build $38 Billion Gas Pipeline To Asia
Related: Greece Potentially Sitting On $600 Billion Worth Of Natural Gas: Report
However, the EIA cautioned that the estimates are “highly uncertain and will remain so until they are extensively tested with production wells.”
“Today’s report indicates a significant potential for international shale oil and shale gas, though the extent to which technically recoverable shale resources will prove to be economically recoverable is not yet clear,” EIA administrator Adam Sieminski said.
Technically recoverable reserves are not a guaranteed supply but an estimate of how much oil or gas could be extracted using the latest technology and they do not take into account economic viability.
The cost of some wells internationally could be higher than in the U.S., potentially marking the “difference between a resource that is a market game changer and one that is economically irrelevant at current market prices.” The U.S. and Canada are the only countries producing shale oil and shale gas in commercial quantities.
Shale oil currently accounts for 30 percent of total U.S. oil production and shale gas accounts for 40 percent of total production, according to the EIA.
Related: Can the US Dethrone Saudi Arabia as the World’s Top Oil Producer?: Chris Faulkner Interview
Related: CNPC Readying $40 Billion Investment In US Shale: Report
The jump in U.S. shale production has helped keep a lid on crude oil prices at about $120 a barrel, giving Western countries leverage to impose sanctions on Iran, a key supplier. World oil demand is about 90 million barrels a day, suggesting the world shale oil resource covers 10.5 years of consumption.
In the longer term, the report said the effect of shale oil on global oil prices will depend on the Organisation of Petroleum Exporting Countries’ “ability and willingness” to trim output. A retreat in prices could also boost oil consumption that “would tend to soften any long-term price-lowering effects of increased production.”
Related: Why Even The Shale Boom May Not Prevent $200 Oil – Interview With Chris Martenson
Related: How The Great Recession Fundamentally Altered World Oil Prices
