Study: North America Dominates Global Shale Gas Market

by Jonathan Katz, IndustryWeek, May 26, 2011
North America will hold a 78% share of the global shale gas production in 10 years because of the region's technical expertise and availability of resources, according to a report released May 25 by Markets and Markets [please see remarks below -- D.R.].

In 2010 North America was the only region active with commercial shale gas production. But current exploration and production activities by major oil and gas companies in Europe and Asia Pacific are expected to lead to shale gas commercialization in these regions by 2016, the report says.

The markets representing high growth rate in shale gas production from 2016 to 2021 are China (6.2%), Poland (6%), France (5.4%) [regarding shale exploration in France, please see my post "Shale Gas Development in Europe" below -- D.R.], South Africa (5.1%) and the United States (5%).

Global shale gas production is expected to grow to 6,991 billion cubic feet in 2021 at a compound annual growth rate of 5.4% [sic; from 2011] through 2021. [Please see remarks below -- D.R.]

Rising shale gas production will likely boost ethylene production by 6.6% by 2021. Ethylene is a feedstock [that can also be] derived from natural gas that is used in petrochemicals. [Also, please see my post, including remarks, here -- D.R.]

Challenges that could hinder shale gas development include the capital-intensive nature of shale gas projects and environmental issues associated with hydraulic fracturing. [Full story]

(Please see a press release from Markets and Markets "MarketsandMarkets: Global Shale Gas Market to reach 6.9 tcf by 2021 and With 78% Market Share North America Continues to dominate the Shale Gas Market." According to the U.S. Energy Information Administration/EIA, in the past 10 years, U.S. shale gas production has increased more than 12-fold from 0.39 trillion cubic feet/tcf in 2000 to 4.87 tcf in 2010. In 2010, U.S. shale gas production constituted 23 percent of total U.S. natural gas production---please see here. For exploration of shale gas in Poland, please see my post "Marathon, Nexen to Jointly Explore Shale in Poland," here. For shale gas in Europe, please see my post "World Watch [Shale Gas Development in Europe]," here. For China's quest for unconventional gas, please see my post "China Plans to Exploit its Shale Gas Resources," here. For Mexico's first shale gas production, please see, inter alia, here. Also, please see Table: Estimated Shale Gas Technically Recoverable Resources for Select Basins in 32 Countries, Compared to Existing Reported Reserves, Production and Consumption during 2009 --- EIA, here. -- D.R.)

Estimated Shale Gas Technically Recoverable Resources for Select Basins in 32 Countries -- EIA

Extracted from the EIA's overview, World Shale Gas Resources: An Initial Assessment of 14 Regions Outside the United States, April 5, 2011

Table 1. Estimated Shale Gas Technically Recoverable Resources for Select Basins in 32 Countries, Compared to Existing Reported Reserves, Production and Consumption during 2009 -- EIA 

	2009 Natural Gas Market1                             (trillion cubic feet, dry basis)			Proved Natural Gas Reserves2 (trillion cubic feet)	Technically Recoverable Shale Gas Resources (trillion cubic feet)
	Production	Consumption	Imports (Exports)
Europe
France	0.03	1.73	98%	0.2	180
Germany	0.51	3.27	84%	6.2	8
Netherlands	2.79	1.72	(62%)	49.0	17
Norway	3.65	0.16	(2,156%)	72.0	83
U.K.	2.09	3.11	33%	9.0	20
Denmark	0.30	0.16	(91%)	2.1	23
Sweden	-	0.04	100%		41
Poland	0.21	0.58	64%	5.8	187
Turkey	0.03	1.24	98%	0.2	15
Ukraine	0.72	1.56	54%	39.0	42
Lithuania	-	0.10	100%		4
Others(3)	0.48	0.95	50%	2.71	19
North America
United States(4)	20.6	22.8	10%	272.5	862
Canada	5.63	3.01	(87%)	62.0	388
Mexico	1.77	2.15	18%	12.0	681
Asia[-Pacific]
China	2.93	3.08	5%	107.0	1,275
India	1.43	1.87	24%	37.9	63
Pakistan	1.36	1.36	-	29.7	51
Australia	1.67	1.09	(52%)	110.0	396
Africa
South Africa	0.07	0.19	63%	-	485
Libya	0.56	0.21	(165%)	54.7	290
Tunisia	0.13	0.17	26%	2.3	18
Algeria	2.88	1.02	(183%)	159.0	231
Morocco	0.00	0.02	90%	0.1	11
Western Sahara	-	-		-	7
Mauritania	-	-		1.0	0
South America
Venezuela	0.65	0.71	9%	178.9	11
Colombia	0.37	0.31	(21%)	4.0	19
Argentina	1.46	1.52	4%	13.4	774
Brazil	0.36	0.66	45%	12.9	226
Chile	0.05	0.10	52%	3.5	64
Uruguay	-	0.00	100%		21
Paraguay	-	-			62
Bolivia	0.45	0.10	(346%)	26.5	48
Total of above areas	53.1	55.0	3%	1,001[*]	6,622
Total world	106.5	106.7	0%	6,609

 Sources [and Notes]:
¹Dry production and consumption: EIA, International Energy Statistics, as of March 8, 2011.
² Proved gas reserves: Oil and Gas Journal, Dec., 6, 2010, P. 46-49.
³Romania, Hungary, Bulgaria.
⁴U.S. data are from various EIA sources.

[*Excluding the United States – D.R.]

(Please see my post "World Shale Gas Resources Outside US Assessed," here. -- D.R.)