Shale gas to radically transform global energy landscape

Shale gas will radically transform the global energy landscape and replace other fuel types thanks to new technology, according to Datamonitor.

In a new report the independent business analyst claims that shale gas will become cheaper than conventional sources due to technological advancements that make it easier to extract.

Shale gas is a natural gas that is retrieved from shale formations and was previously expensive to produce due to its high density. However new horizontal drilling and hydraulic fracturing technologies have reduced the cost.

The shale gas revolution began in America and according to the report, is gaining momentum in other parts of the world, with potentially huge ramifications.

Sierra Highcloud, Datamonitor analyst, said: ‘Shale gas has the potential to radically alter the global energy landscape thanks to new technology that makes it cheaper to produce than other forms of gas. There has been strong growth in production in the US and this is now starting to affect markets in other regions, where the implications could be massive. In particular, it has the potential to drastically alter China’s energy market.

‘The country’s gas use is set to soar, driven by rising demand and government policy, which aims to increase the role of gas as a primary energy source to 10 per cent by 2020. Currently, this would result in a production shortfall. China has large shale reserves so the ability to extract from them will be key.’

According to the report, China is tapping into US expertise to extract from its shale gas reserves and companies such as Total and Shell are already making moves.

In Europe, Germany has taken the lead in promoting the transfer of the skills and technology needed to boost shale gas output. Meanwhile India is exploiting its good energy ties with America and is working to catch up with China in terms of knowledge transfer.

Highcloud added: ‘In the UK, shale reserves are relatively small but the need to tap into them is fairly urgent due to its increasing reliance on gas imports. Shale is estimated to boost onshore gas production in the UK by 12%.’

Published on 20/10/2010

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