View PhotoAFP –
Shale-based resources increase the world’s total potential oil reserves by 11 percent and natural gas by 47 percent, according to a US report released Monday.
In an initial assessment of shale oil resources and an update of shale gas reserves, the US Energy Information Agency said shale deposits could add 345 billion barrels of oil to global reserves, increasing the total to 3,357 billion barrels.
Shale gas adds 7,299 trillion cubic feet of natural gas, or 32 percent of the world total, the EIA report estimated.
The report seeks to quantify the potential global significance of the shale boom, after the exploitation of North American shale deposits transformed the US oil and gas industry.
It said an improvement in geologic data has allowed a better view of global resources. In addition to the United States, other countries with large shale resources include Russia, China, Argentina, Algeria and Libya.
However, the EIA cautioned that the estimates are “highly uncertain and will remain so until they are extensively tested with production wells.”
The report also does not assess the economic viability of developing the resources. The cost of some wells internationally could be higher than in the US, potentially marking the “difference between a resource that is a market game changer and one that is economically irrelevant at current market prices.”
So far, only the US and Canada produce shale energy in commercial quantities.
The report is an update of a 2011 EIA report on natural gas resources, boosting the global quantity of shale gas by 10.2 percent. The 2011 report did not estimate the global potential of shale oil.
Not all of the drilling data has led to higher estimates on resources.
EIA slashed the estimate for China to 1.1 trillion cubic feet of gas from 1.3 trillion cubic feet in 2011 after acquiring better data that revealed the size of key hydrocarbon fields and their total organic content.
China is estimated to have the world’s greatest recoverable shale resources and the third-larges shale oil resources.
The report also cites recent drilling in Argentina, Mexico and Poland as shedding more light on resources. It does not assess prospective shale formations in some regions, such as the Middle East and the Caspian region.
The top six countries in terms of recoverable shale gas resources — China, Argentina, Algeria, the US, Canada and Mexico — account for more than 60 percent of the world’s recoverable shale gas resources.
The top five countries in terms of recoverable shale oil — Russia, the US, China, Argentina and Libya — account for 63 percent of the world’s total.
Because of both geology and “above-the-ground conditions,” the report said, “the extent to which global technically recoverable shale resources will prove to be economically recoverable is not yet clear.”
Key above-ground advantages in the US and Canada that may not apply in other countries include private ownership of subsurface rights “that provide a strong incentive for development,” the report said.
EIA also cited the availability of many independent operators and supporting contractors with expertise and drilling rigs and preexisting gathering and pipeline infrastructure.
The report said the jump in US shale oil production played a role recently in keeping a lid on oil prices.
Longer term, the report said the effect of shale oil on oil prices will depend on the Organization of Petroleum Exporting Countries’ “ability and willingness” to trim output. A retreat in prices could also boost oil consumption that “would tend to soften any long-term price-lowering effects of increased production.”
The US boom has been enabled by the controversial drilling technique of hydraulic fracturing, which involves pumping fluids deep into rock to allow extraction.
Some countries, such as France and Bulgaria, have blocked fracking, while others, such as the Netherlands, are studying the issue.