As it stands the global shale gas revolution is missing in action. To be sure, its impact in the United States – and the subsequent ripple worldwide – was nothing short of game-changing, but the wave of enthusiasm has yet to produce substantial results outside of North America.
Still, the dream is far from dead and exciting prospects abound from Argentina to China, and elsewhere in between. Both shale gas and tight oil – more than happenings in Iran, or drilling in the Arctic – look primed to be the dominant market movers in the short- to medium-term.
The U.S. experience is hard to replicate, and with the custom-tailored approach that hydraulic fracturing demands, it’s a difficult template for shale hopefuls to follow verbatim. It does however, provide a basic outline for what works and what doesn’t – an outline that explains the muted success abroad.
First, a helpful tax regime minimized the risk for early, pre-commercial, shale wildcatters. Between 1980 and 2002, tax credits via the federal government subsidized shale gas producers by between 20 to 60 percent of market prices. Also of note is the U.S.’ extensive – and unbundled – pipeline network, robust service sector, and the relative widespread availability of water.
Related: China Doubles Down On Dirty Fuel
Perhaps more important though, are mineral rights. One of the key ingredients to the shale revolution in the U.S. is the ownership of mineral rights for landowners. That gives them a stake in the boom. But that is rare outside of the U.S. – in many other countries the government owns the mineral rights beneath a landowner’s land. That has slowed development in China, and contributed to preventing shale gas development across mainland Europe.
In the U.S., federal or nationally owned lands hinder, rather than help, development. Since fiscal year 2010, production of primarily shale gas and tight oil on federal land is down 31 percent and 10 percent respectively. Conversely, nonfederal lands have seen shale gas and tight oil production grow 37 percent and 89 percent respectively.
Of course, none of the aforementioned factors are prerequisite for shale success. Where there’s a will, there’s a way – and several countries are blazing their own trail in the pursuit of shale spoils.
Relatively new on the scene, but hot out of the gates is Argentina. The South American country is believed to hold more than 800 trillion cubic feet of technically recoverable shale gas – ranking it at number three globally. At 27 billion barrels, its technically recoverable shale oil resources rank fourth worldwide.
Related: What Is In Store For the Halliburton-Baker Hughes Tie-Up?
Argentina has yet to produce commercial volumes of shale gas – April saw production hit 67 million cubic feet per day (MMcf/d) – but interest and capital are present in abundance. Americas Petrogas, Chevron, Dow Chemical, Gazprom, Petronas, and Sinopec are just some of the players working with the national energy company, YPF, to tap the massive Vaca Muerta shale play.
To read more at: http://oilprice.com/Energy/Natural-Gas/Where-In-The-World-Is-The-Shale-Gas-Revolution.html
Still, the dream is far from dead and exciting prospects abound from Argentina to China, and elsewhere in between. Both shale gas and tight oil – more than happenings in Iran, or drilling in the Arctic – look primed to be the dominant market movers in the short- to medium-term.
The U.S. experience is hard to replicate, and with the custom-tailored approach that hydraulic fracturing demands, it’s a difficult template for shale hopefuls to follow verbatim. It does however, provide a basic outline for what works and what doesn’t – an outline that explains the muted success abroad.
First, a helpful tax regime minimized the risk for early, pre-commercial, shale wildcatters. Between 1980 and 2002, tax credits via the federal government subsidized shale gas producers by between 20 to 60 percent of market prices. Also of note is the U.S.’ extensive – and unbundled – pipeline network, robust service sector, and the relative widespread availability of water.
Related: China Doubles Down On Dirty Fuel
Perhaps more important though, are mineral rights. One of the key ingredients to the shale revolution in the U.S. is the ownership of mineral rights for landowners. That gives them a stake in the boom. But that is rare outside of the U.S. – in many other countries the government owns the mineral rights beneath a landowner’s land. That has slowed development in China, and contributed to preventing shale gas development across mainland Europe.
In the U.S., federal or nationally owned lands hinder, rather than help, development. Since fiscal year 2010, production of primarily shale gas and tight oil on federal land is down 31 percent and 10 percent respectively. Conversely, nonfederal lands have seen shale gas and tight oil production grow 37 percent and 89 percent respectively.
Of course, none of the aforementioned factors are prerequisite for shale success. Where there’s a will, there’s a way – and several countries are blazing their own trail in the pursuit of shale spoils.
Relatively new on the scene, but hot out of the gates is Argentina. The South American country is believed to hold more than 800 trillion cubic feet of technically recoverable shale gas – ranking it at number three globally. At 27 billion barrels, its technically recoverable shale oil resources rank fourth worldwide.
Related: What Is In Store For the Halliburton-Baker Hughes Tie-Up?
Argentina has yet to produce commercial volumes of shale gas – April saw production hit 67 million cubic feet per day (MMcf/d) – but interest and capital are present in abundance. Americas Petrogas, Chevron, Dow Chemical, Gazprom, Petronas, and Sinopec are just some of the players working with the national energy company, YPF, to tap the massive Vaca Muerta shale play.
To read more at: http://oilprice.com/Energy/Natural-Gas/Where-In-The-World-Is-The-Shale-Gas-Revolution.html
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