Global Shale Gas Technologies and Markets

Market Insights: A Selection From The Report

Employment in the US Shale Plays

As of July 2010, a total of 1,585 rotary rigs were actively drilling in the United States, 62 percent of which were drilling for gas.29 SBI Energy estimates that two-thirds of these gas rigs were drilling for shale gas, indicating that over 40 percent of total US oil and gas drilling activity was devoted to shale gas at the time. Drilling rig activity is a strong indicator of oil and gas industry employment. Rig counts provide an indication of both current employment levels related to well site preparation and drilling operations and future employment which would be required to subsequently operate producing wells.

Shale Gas Production in the United States

The United States has led the world in developing and producing shale gas. In fact, the first commercial gas well in the US was a shale gas well, drilled in 1821 in Fredonia, New York. Since then, production of gas from shale formations in the US has occurred on a continuous basis, albeit in small volumes. Until recent years, shale gas production in the country had been eclipsed for over a century and a half by the ability to more economically obtain much larger volumes of gas from conventional gas reservoirs. However, as volumes from conventional resources have declined in the United States, and accessing conventional reservoirs has itself become more difficult and costly, technology and the economics of shale gas production have improved.

Growth in Global Energy Consumption
Global energy consumption is expected to increase by 25% from 473 quadrillion Btu in 2005 to over 590 quadrillion Btu in 2020. Global recessionary conditions moderated consumer demand for goods and services and related manufacturing, and global energy consumption concurrently declined by 2.2% in 2009. Since then, the developing non OECD (Organization for Economic Cooperation and Development) nations have led the global recovery. There are also indications that the recession in the US has ended, and while recovery in Europe and Japan has lagged the EIA International Energy Outlook projects that most nations will have recovered from recessionary conditions by 2012, and revert to long-term growth patterns.

Driven by U.S. Investments, Shale Natural Gas Grows Into an International Energy Market Heavyweight

New York, February 9, 2011 —Shale gas, natural gas produced from shale formations, has the potential to dramatically impact global energy markets, according to Global Shale Gas Technologies and Markets by leading industrial research firm SBI Energy.

“Declining production from depleting conventional gas resources in many parts of the world, combined with rising global demand for energy and natural gas has caused dramatic increases in the price of crude oil and natural gas over the better part of the decade. This has both driven demand for shale gas and improved the economic viability of shale gas developments,” says Shannon Shuflat, SBI Energy analyst and co-author of Global Shale Gas Technologies and Markets alongside Akash Shah.

According to Shuflat and the report, the response to these factors has been an astounding twelve-fold increase in the recorded global production of shale gas from 2000 to 2010. SBI Energy estimates that global shale gas production grew at a compound annual average rate (CAGR) of nearly 50% per year from 1,002 billion cubic feet in 2006 to 5,042 billion cubic feet in 2010.

Presently, the success of shale gas production in North America, and particularly in the United States, has triggered the exploration of shale gas resources around the world. Shale gas exploration is occurring in China, India, Poland, Germany, Spain, France, the United Kingdom, the Netherlands, Australia, Austria, Sweden, Switzerland, Italy, Hungary, Romania, Ukraine, and Argentina, among other nations seeking to lower-carbon fuels while also ensuring energy security and economic development. An earlier start and aggressive action to date indicate China, Poland, and India will likely emerge as the first producers of shale gas outside of North America.

“The confluence of growing natural gas demand and breakthrough technological advancements has made investments in shale plays attractive in recent years. Advancements in horizontal drilling and hydraulic fracturing technologies have enabled the achievement of high rates of gas production from deep, low permeability shale formations. These breakthroughs have facilitated access to some of the largest undeveloped gas resources in the world," says Shah.

Despite the severe global economic recession over the past two years, growth in shale gas production volume has continued unabated. However, the wellhead production value of global shale gas has not kept pace with production volume growth because natural gas prices have declined steeply since the recession hit in the latter half of 2008. Lower realized wellhead prices notwithstanding, the global value of shale gas production grew by nearly 35% per year from $6.4 billion in 2006 to over $21 billion in 2010. The global value of shale gas production is expected to grow by 12% annually to ultimately exceed $37 billion in 2015 and further by 9% annually to more than $56 billion in 2020.

Global Shale Gas Technologies and Markets includes a broad review of the global market for shale gas. The report presents the characteristics of currently identified global shale gas resources and key technologies leveraged in the production of shale gas. Environmental considerations and the regulatory landscape are discussed. Additionally, details of major U.S. shale play investments are provided along with discussion of the potential economic impact of shale development and U.S. sub-sector employment trends. Key market participants are profiled. The report provides historic and forecast global shale production 2006 to 2020. Market drivers including global energy demand, gas demand, supply, and price trends and market inhibitors are reviewed in detail.

About SBI Energy
SBI Energy, a division of MarketResearch.com, publishes research reports in the industrial, energy, building/construction, and automotive/transportation markets. SBI Energy also offers a full range of custom research services.

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