According to the US Energy Information Agency, shale formations in countries such as the US and a few others potentially hold as much as 10% of the world’s recoverable crude and a third of natural gas.
However, much of the oil and gas drilling success will depend more on market forces than geology alone.
The amount of known technically recoverable oil from shale formations has gone up tenfold in the past two years, according to a US EIA, which surveyed 137 shale formations in 41 countries.
The amount of technically recoverable shale gas has gone up to 7299 trillion cubic feet or an increase of 10% from the last time EIA surveyed the world’s shale formations.
The EIA said these shale oil and shale gas resources were considered “technically recoverable resources” or those that could be produced using existing technology.
“The shale gas resources assessed in this report, combined with EIA’s prior estimate of US shale gas resources, add approximately 47% to the 15,583 trillion cubic feet of proved and unproven non shale technically recoverable natural gas resources,” the report says.
“Globally, 32% of the total estimated natural gas resources are in shale formations.”
However, what remains uncertain is how much of the available shale resources will end up being produced.
Although the number of identified shale formations has doubled in the past two years, analysts say energy market forces will prevail over geology.
Of the countries surveyed, only the US and Canada are producing shale oil and gas, with many other countries attempting, in varying degrees, to replicate the North American success.
In the US, hydraulic fracturing and horizontal drilling techniques have led to recovery of vast oil and gas deposits within the shale formations.
Led by the shale formations in North Dakota, oil production in the country has climbed by 1 million barrels a day from a year earlier. That recently meant US domestic production exceeded its imports for the first time since 1997.
“As shale oil and shale gas production has grown in the US to become 30 per cent of oil and 40 per cent of natural gas total production, interest in the oil and natural gas resource potential of shale formations outside the U.S has grown,” EIA administrator Adam Sieminski said in a statement.
According to the report, China leads the world in shale gas resources with 1115 trillion cubic feet, while also holding the third spot in shale oil resource with 32 billion barrels.
Russia, with 75 billion barrels of shale oil resource tops the chart of shale oil reserves, with Argentina showing promise. It potentially holds 27 billion barrels of shale oil and 802 trillion cubic feet of shale gas.
However, the EIA numbers come with caveat. While the report itself highlights the resource potential of shale formations across the world, it does warn that more data needs to be gathered to ascertain the economics of the shale resources.
Given the variation across the world’s shale formations in both geology and above ground conditions, the extent to which global technically recoverable shale resources will turn out to be economically recoverable is unclear. Much of it would depend on domestic production costs, volumes as well as pricing policies.
