Shale Gas & Shale Oil Reshape World Energy Landscape
After unleashing an energy revolution in the United States, shale gas and oil are now becoming energy game-changers worldwide, a break with the past whose ramifications are still unclear.
Thanks to the advent of hydraulic fracturing technology—used to extract oil and gas locked in sedimentary shale rock—the United States is on track to become the world-number-one oil producer by 2017 and a net exporter by 2030, according to the International Energy Agency (IEA).
Besides radically changing the US energy landscape, this “fracking” revolution is also reshaping markets overseas.
Thanks to the sudden abundance of cheap natural gas, American electricity suppliers are shunning domestic coal—leading producers to export it at low prices to Europe and Asia.
That trend has revived the appeal of coal-fired power plants in Europe and taken a toll on plans to transition toward gas-burning plants, despite the air-pollution concerns around coal.
Energy experts say the United States will also likely begin exporting liquefied natural gas (LNG) to Europe and Asia in the next several years.
US authorities have already greenlighted four LNG export terminals.
“We anticipate that from around 2016, we are really going to see volumes of LNG coming out of the United States and they are going to change the way that markets connect over the coming decades,” said IEA analyst Tim Gould at a recent conference.
“The United States won’t export a huge amount of gas, because they’ll be looking to keep domestic price levels as low as possible, but eventually there will undoubtedly be more than 10 export terminals geared toward Europe and Asia,” said Jerome Ferrier, head of the International Gas Union.
With all its new non-conventional output, the United States is now producing more than seven million barrels of oil per day, returning to the level of 25 years ago, said Olivier Appert, head of the French institute for oil and new energies (IFPEN).
“The fact that the United States is set to become the top oil producer by 2020, ahead of Saudi Arabia, changes everything,” said Appert.