South Baltic Gas Forum
5 - 9 September 2011, Gdańsk, Poland

Shale gas

Shale gas is natural gas that is found trapped within shale formations. Shale gas has become an increasingly important source of natural gas in the United States since the start of this century, and interest has spread to potential gas shales in the rest of the world. In 2000 shale gas provided only 1% of U.S. natural gas production; by 2010 it was over 20% and the U.S. government's Energy Information Administration predicts that by 2035, 46% of the United States' natural gas supply will come from shale gas.
Federal price controls on natural gas led to shortages in the 1970s. Faced with declining natural gas production, the federal government invested in many supply alternatives, including the Eastern Gas Shales Project, which lasted from 1976 to 1992, and the annual FERC-approved research budget of the Gas Research Institute, where the federal government began extensive research funding in 1982, disseminating the results to industry. The federal government also provided tax credits and rules benefiting the industry in the 1980 Energy Act. The Department of Energy later partnered with private gas companies to complete the first successful air-drilled multi-fracture horizontal well in shale in 1986. The federal government further incentivized drilling in shale via the Section 29 tax credit for unconventional gas from 1980-2000. Microseismic imaging, a crucial input to both hydraulic fracturing in shale and offshore oil drilling, originated from coalbeds research at Sandia National Laboratories. The DOE program also applied two technologies that had been developed previously by industry, massive hydraulic fracturing and horizontal drilling, to shale gas formations, which led to microseismic imaging.
Shales that host economic quantities of gas have a number of common properties. They are rich in organic material (0.5% to 25%), and are usually mature petroleum source rocks in the thermogenic gas window, where high heat and pressure have converted petroleum to natural gas. They are sufficiently brittle and rigid enough to maintain open fractures.
Europe has estimated shale gas reserves of 639 trillion cubic feet (18.110.12 m3) compared with America's 862 trillion cubic feet (24.410.12 m3), but its geology is more complicated and the oil and gas more expensive to extract, with a well likely to cost as much as three-and-a-half times more than one in the United States. Europe would be the fastest growing region, accounting for the highest CAGR of 59.5%, in terms of volume owing to availability of shale gas reserves in more than 14 European countries.
The most comprehensive study of methane leakage from shale gas to date, initiated by the Environmental Defense Fund (EDF) and released in the Proceedings of the National Academy of Sciences on 16 September 2013, finds that fugitive emissions in key stages of the natural gas production process are significantly lower than estimates in the EPAs national emissions inventory (which are already quite low). The study reports direct measurements from 190 onshore natural gas sites across the country and estimates a leakage rate of 0.42% for gas production. Although the EDF study did not cover all stages of natural gas supply chain, subsequent studies are planned to estimate leakage rates in others parts of the system.

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