"Natural gas is poised to enter a golden age, but will do so only if a significant proportion
of the world’s vast resources of unconventional gas – shale gas, tight gas and coalbed
methane – can be developed profitably and in an environmentally acceptable manner.
Advances in upstream technology have led to a surge in the production of unconventional
gas in North America in recent years, holding out the prospect of further increases in
production there and the emergence of a large-scale unconventional gas industry in other
parts of the world, where sizeable resources are known to exist. The boost that this would
give to gas supply would bring a number of benefits in the form of greater energy diversity
and more secure supply in those countries that rely on imports to meet their gas needs, as
well as global benefits in the form of reduced energy costs.
Yet a bright future for unconventional gas is far from assured: numerous hurdles need
to be overcome, not least the social and environmental concerns associated with its
extraction. Producing unconventional gas is an intensive industrial process, generally
imposing a larger environmental footprint than conventional gas development. More wells
are often needed and techniques such as hydraulic fracturing are usually required to boost
the flow of gas from the well. The scale of development can have major implications for
local communities, land use and water resources.
We assume that the conditions are in place, including approaches to unconventional gas development consistent with environment safe production and social concerns resolved
which would allow for a continued global expansion of gas supply from unconventional resources,
with far-reaching consequences for global energy markets. According to the latest report from the IEA greater availability of gas would have
a strong moderating impact on gas prices and, as a result, global gas demand rises by more
than 50% between 2010 and 2035. The increase in demand for gas is equal to the growth
coming from coal, oil and nuclear combined, and ahead of the growth in renewables. The
share of gas in the global energy mix reaches 25% in 2035, overtaking coal to become the
second-largest primary energy source after oil.
Production of unconventional gas, primarily shale gas, more than triples in the Golden
Rules Case(study scenario shale production in a safe an environmentally clean and
friendly towards communities, land and water resources)to 1.6 trillion cubic metres in 2035. This accounts for nearly two-thirds of
incremental gas supply over the period to 2035, and the share of unconventional gas in total
gas output rises from 14% today to 32% in 2035. Most of the increase comes after 2020,
reflecting the time needed for new producing countries to establish a commercial industry.
The largest producers of unconventional gas over the projection period are the United
States, which moves ahead of Russia as the largest global natural gas producer, and China,
whose large unconventional resource base allows for very rapid growth in unconventional
production starting towards 2020. There are also large increases in Australia, India, Canada
and Indonesia. Unconventional gas production in the European Union, led by Poland, is
sufficient after 2020 to offset continued decline in conventional output.
Global investment in unconventional production constitutes 40% of the $6.9 trillion (in
year-2010 dollars) required for cumulative upstream gas investment in the Golden Rules
Case. Countries that were net importers of gas in 2010 (including the United States)
account for more than three-quarters of total unconventional upstream investment,
gaining the wider economic benefits associated with improved energy trade balances and
lower energy prices. The investment reflects the high number of wells required: output at
the levels anticipated in the Golden Rules Case would require more than one million new
unconventional gas wells worldwide between now and 2035, twice the total number of gas
wells currently producing in the United States".
of the world’s vast resources of unconventional gas – shale gas, tight gas and coalbed
methane – can be developed profitably and in an environmentally acceptable manner.
Advances in upstream technology have led to a surge in the production of unconventional
gas in North America in recent years, holding out the prospect of further increases in
production there and the emergence of a large-scale unconventional gas industry in other
parts of the world, where sizeable resources are known to exist. The boost that this would
give to gas supply would bring a number of benefits in the form of greater energy diversity
and more secure supply in those countries that rely on imports to meet their gas needs, as
well as global benefits in the form of reduced energy costs.
Yet a bright future for unconventional gas is far from assured: numerous hurdles need
to be overcome, not least the social and environmental concerns associated with its
extraction. Producing unconventional gas is an intensive industrial process, generally
imposing a larger environmental footprint than conventional gas development. More wells
are often needed and techniques such as hydraulic fracturing are usually required to boost
the flow of gas from the well. The scale of development can have major implications for
local communities, land use and water resources.
We assume that the conditions are in place, including approaches to unconventional gas development consistent with environment safe production and social concerns resolved
which would allow for a continued global expansion of gas supply from unconventional resources,
with far-reaching consequences for global energy markets. According to the latest report from the IEA greater availability of gas would have
a strong moderating impact on gas prices and, as a result, global gas demand rises by more
than 50% between 2010 and 2035. The increase in demand for gas is equal to the growth
coming from coal, oil and nuclear combined, and ahead of the growth in renewables. The
share of gas in the global energy mix reaches 25% in 2035, overtaking coal to become the
second-largest primary energy source after oil.
Production of unconventional gas, primarily shale gas, more than triples in the Golden
Rules Case(study scenario shale production in a safe an environmentally clean and
friendly towards communities, land and water resources)to 1.6 trillion cubic metres in 2035. This accounts for nearly two-thirds of
incremental gas supply over the period to 2035, and the share of unconventional gas in total
gas output rises from 14% today to 32% in 2035. Most of the increase comes after 2020,
reflecting the time needed for new producing countries to establish a commercial industry.
The largest producers of unconventional gas over the projection period are the United
States, which moves ahead of Russia as the largest global natural gas producer, and China,
whose large unconventional resource base allows for very rapid growth in unconventional
production starting towards 2020. There are also large increases in Australia, India, Canada
and Indonesia. Unconventional gas production in the European Union, led by Poland, is
sufficient after 2020 to offset continued decline in conventional output.
Global investment in unconventional production constitutes 40% of the $6.9 trillion (in
year-2010 dollars) required for cumulative upstream gas investment in the Golden Rules
Case. Countries that were net importers of gas in 2010 (including the United States)
account for more than three-quarters of total unconventional upstream investment,
gaining the wider economic benefits associated with improved energy trade balances and
lower energy prices. The investment reflects the high number of wells required: output at
the levels anticipated in the Golden Rules Case would require more than one million new
unconventional gas wells worldwide between now and 2035, twice the total number of gas
wells currently producing in the United States".
