The US shale revolution

The past decade has seen major technological breakthroughs in gas extraction.

In the US, new drilling and production techniques have made it possible to produce gas held in shale rocks.

The emergence of shale gas has enhanced US energy security. By triggering a rapid increase in natural gas production, it has increased local gas supply and reduced gas prices.

Big resource, big production

In 2012, the US Government’s Energy Information Administration (EIA) estimated the country has about 482 trillion cubic feet (tcf) of recoverable shale gas.

US shale gas production rose from less than 1.3tcf in 2007 to more than 5.3tcf in 2010 – an increase of more than 300%.

In 2000 shale gas provided only 1% of U.S. natural gas production; by 2012 it accounted for 39%. The EIA predicts that by 2035, 46% of US natural gas supply will come from shale gas.

Economic benefits

Rising shale gas production has had an enormous impact on the US, cutting emissions and boosting the economy.

Gas is an important component in many industrial processes. US chemical, plastics, aluminium, iron and steel, rubber, coated metals, and glass industries have been revitalised. The country is now also a net exporter of refined petroleum products.

In a 2012 report, business and economic research firm IHS found that US shale gas production alone will create some 1.5 million jobs by 2015, and 2.4 million by 2035.

The IHS study further concluded that the shale gas boom will continue to drive economic growth, receiving $3.2 trillion in cumulative investment between 2010 and 2035, and contributing $332 billion to US gross domestic product (GDP) by 2035.

Environmental benefits

US greenhouse gas emissions have fallen as industry and consumers switched from coal to gas. The nation’s 2011 emissions were 9% lower than its 2007 emissions.

Australian shale gas potential

The US Energy Information Administration has estimated that Australia could have up to 396 trillion cubic feet in shale gas resources. At current production rates, this is equivalent to about 185 years of total Australian gas production.

Tapping into these resources would boost Australia’s energy security and economy, and would provide larger reserves of reliable cleaner energy.

Shale gas exploration and appraisal programs are now underway in Western Australia, South Australia and the Northern Territory.

If these programs are successful, Australia could experience economic and environmental benefits similar to those in the US.