Producing natural gas from shale has increased significantly over the past years. Shale gas was expected by the Energy Information Administration (EIA) to account for 30% of the global natural gas output by 2040.
EIA estimated the world’s total recoverable resources of shale gas at 7,299 trillion cubic feet (tcf) and estimated shale gas production to reach 168 billion cubic feet per day (bcf/d) by 2040.
As several countries are using the latest technologies to extract oil and gas from unconventional resources, shale gas has become a game-changer in these countries’ production and economy.
Shale Gas Exploration Performance & Effects on Petroleum Performance
In 2016, natural gas accounted for 22% of the world’s overall energy demand, according to the energy mix report published by the United Nations Conference on Trade and Development (UNTCAD) in 2018.
The report mentioned that the demand for coal was higher than natural gas, as it recorded 27%.
However, as the world is going green, people’s awareness of CO2 emissions is increasing. Therefore, people are starting to adopt a more environment-friendly low-carbon lifestyle by shifting to natural gas in many applications, including factories, households, and vehicles.
Natural gas consumption grew by 4.6% in 2018, accounting for half of the global demand increase in this year, according to EIA.
Meanwhile, UNTICAD expected the world’s natural gas consumption to be 25% of the global energy demand by 2040.
In order to meet the rising demand for natural gas the world is shifting its attention into producing from unconventional shale formations and several countries have already taken steps towards producing shale gas. These countries include China, with the highest recoverable reserves recording 1,115.2 tcf, Argentina, 801.5 tcf, and Canada, 572.9 tcf, the EIA said. The countries that began their shale exploration activities further include the United Kingdom (UK), Algeria, Poland, South Africa, and Egypt. The country with the hugest shale exploration success is the US.
The US is the largest shale gas contributor since 2009, as it produced 80% of the world’s shale from 2009 to 2018, according to UNTCAD.
Moreover, it is projected to be producing 2/3 of the world shale by 2040. The US owns huge shale reserves recording 662.5 tcf, according to EIA’s report.
Shale production has been widely affecting oil and gas world. It does not only affect the gas production, but it also contributed to different fields that play a role in the economy. Exploring shale gas affects other sectors like the petrochemicals sector, energy generation, transportation sector, and the liquefied petroleum gas (LPG) market.
Exploring Shale Turns the Tables
Shale gas exploration has significantly affected the economy and turned the tables in many countries. In the US, the country has been a net exporter of natural gas for years thanks to its shale exploration. Also, its production growth is dominated by shale gas, which grows at a rate of almost 4% per year, four times faster than conventional gas, EIA estimated.
Thanks to the American shale revolution, the US has more energy than what is in use, and therefore it became a liquefied natural gas (LNG) supplier.
“Growing LNG supply from the US means more competition, liquidity and supply diversity that will make global gas markets more flexible, efficient and secure,” Jason Bordoff, energy expert at Columbia University, stated in a report on financing clean energy transition.
“Gas will trade more like oil, meaning market forces will determine price and where supply flows,” he added.
An HIS report published in October 2012, reported the actual and expected economic impacts of shale gas exploration on the American economy, noting that shale gas is expected to provide 2.1 million job vacancies in 2035.
Meanwhile, unconventional energy activity is expected to have value-added contributions to the US gross domestic product (GDP) reaching $475 billion per annum in 2035.
Furthermore, shale gas exploration contributed to the economy of several countries. In the UK, for example, it led to an increase of up to 7% in the level of employment supported by the UK oil and gas industry sector, according to Redacted ‘Rural Community Policy Unit’ report published in March 2014.
Shale Exploration in Egypt
Egypt has potential for shale gas production in four basins, Naturn, Abu Gharadig, Shoushan-Matruh, and Alamein, located in the Western Desert. The four basins are located in the Khatatba formation, which dates back to the M.Jurassic geological age.
The Khatatba reservoir has around 535 tcf of shale gas in place, with approximately “100 tcf risked, technically recoverable shale gas resources,” EIA said.
Egypt has already started tapping its shale gas reserves. In February 2017, Schlumberger and Khalda Petroleum Company held a presentation to showcase the success of the unconventional completion operation of the Apollonia JD gas field, located in the Abu Gharadig basin.
Egypt achieved natural gas self-sufficiency in 2019. However, in fiscal year (FY) 2019/20, the country faced a petroleum trade deficit of $421 million, according to the Central Bank of Egypt (CBE).
Accordingly, Egypt exported $8.5 billion worth of petroleum products and natural gas, and imported $8.9 billion worth of petroleum to meet the high consumption.
The country is still using huge amounts of petroleum products as a fuel for industries, households, and vehicles, therefore it needs to import petroleum to meet the domestic demands.
Producing natural gas from shale could help the country produce more than its current natural gas needs and eventually replace other petroleum products and decrease the petroleum trade deficit. This can also reinforce the governmental approach to use more natural gas in households and industries and the presidential initiative to use compressed natural gas (CNG) as an alternative fuel for vehicles.
Exploring shale gas opens new scopes for the economy to grow, as it has helped nations to shift their fuel strategies and it will still help more nations to achieve their economic plans.
Shale gas will further empower countries in their green initiatives as they increase natural gas output and lead the world to a low-carbon economic future.