Global shale gas production

According to estimates, unconventional natural gas production accounted for 15% of global natural gas production in 2010, most of which came from North America. Of the approximately 420 billion m2 (14.8 trillion ft3) of unconventional gas production that the Beiguan region contributed that year, half was tight gas. Annual shale gas production has grown by 11 percent in the past decade, reaching nearly one-third of total unconventional gas production in 2010.

In the United States, tight gas production has gone through more than 40 years, and coalbed methane production has passed through more than 20 years. The production of shale gas started later, but since 2005, with the improvement of mining technology, the production of shale gas has grown rapidly. By 2010, shale gas production had exceeded 20% of total U.S. natural gas production. In the rest of the world, it is estimated that CBM production is about 10 billion m3 (350 billion ft3) and tight gas production is 60 billion m3 (2.1 trillion ft3).

Rapidly growing countries: Canada produces tight gas, coalbed methane and a small amount of shale gas. Australia has good potential for CBM development, and small-scale production has been carried out. But future research projects in Australia that focus on producing liquefied natural gas from coalbed methane are more likely to succeed. Three similar projects were launched in 2014-2016. China, India and Indonesia, which currently produce small amounts of unconventional gas, are looking for ways to increase their output.

Despite strong interest from European governments, public concerns about high population densities and potential environmental impacts are holding back shale gas development. We already know that Argentina, Algeria and Mexico are also likely to have large potential shale gas resources.

New drilling and other related advanced technologies have made feasible and economical production possible in shale basins around the world. Thanks to these technologies, there has been a huge increase in the amount of available resources worldwide, which will lead to lower gas prices and higher gas demand over the next few decades (EIA-IF02011).

The main source of natural gas supply in the United States – shale gas

U.S. natural gas production has grown from 50 billion per day in 2005 to 63 billion per day in 2011, a 20% growth rate, and production has also shifted from conventional sandstone basins to shale and tight sandstone formations. Not only that, but crude oil and natural gas liquid products(such as propane, ethane and butane) — commonly known as wet gas — are increasing the economic viability of shale extraction, expanding the geology that can produce (or potentially produce) natural gas. The development of shale gas pushes the development of the entire natural gas resources to a higher level. In 2011, the United States had technically recoverable natural gas reserves (proven and potential reserves) in various forms totaling 2543 trillion, of which 827 trillion was in the form of shale gas (California Energy Commission, 2012).

Because current production methods need to adapt to new directions, and shale resources may not be stored in traditional oil and gas formations, the future development of shale gas will depend on the joint efforts of industry, government departments and local society. Regardless of the country, only by establishing an understanding of the potential benefits of unconventional natural gas production, taking practical measures to protect groundwater and air quality, and minimizing the impact on the environment can shale resources develop smoothly.

In the absence of certainty that unconventional gas production technologies can be successfully applied outside the United States, Exxon Guanfu expects to see unconventional natural gas become a more important part of Asia Pacific, South and Central America, and Europe in recent decades.

For some regions, increasing production of unconventional resources means limiting import demand, but for Asia Pacific and Europe, it means more imports via pipelines and LNG tankers to meet their respective needs (ExxonMobil 2012).

Reasons for developing unconventional natural gas: There are two main reasons: (1) the technological progress in the past 20 years, especially the related technologies of hydraulic fracturing; (2) the rising gas price at the beginning of the 21st century. Countries that need to import natural gas are eager to explore for unconventional gas, because if they can produce large quantities of unconventional gas, they will have greater energy security and energy independence, and less reliance on expensive imported energy. On the other hand, gas producers developing unconventional gas will be able to export larger quantities of gas.

Read more: Unconventional natural gas reserves