The overall worldwide production of shale gas was about 535.915 bcm in 2018. The increase in domestic consumption of natural gas is likely to increase the demand for shale gas. Besides this, advancement in horizontal drilling technology and the development of hydraulic fracturing technology made the shale gas production activity economically viable and also improved access to deeper shale gas deposits. However, technological advancements in the use of renewable energy and government environment policies affected the shale gas market. Environmental activists are protesting against shale gas and oil drilling and production activity as it requires lots of water and produced harmful emissions. Whereas the European Union and many other countries’ governments are investing in renewable energy technology for clean energy requirements. This, in turn, is expected to hinder the growth of the shale gas market in the coming years.
- Increasing environmental concerns during the production of shale gas are expected to restrain the market studied.
- The shale gas technology advancement for the deepwater and ultra-deepwater are expected to provide a great opportunity for the shale gas market.
- North America is expected to dominate the market across the world from the early days of this shale gas exploration and production technology.
Key Market Trends
Increasing Environmental Concerns to Restrain the Market
- Despite the economic benefits, environmental risks associated with hydraulic fracturing are restraining the shale gas market.
- Methane gas emissions during the drilling process pose potential air pollution risks. Additionally, incorrect disposal of large volumes of chemically treated water used in hydraulic fracturing operations can potentially cause severe surface water contamination. This has attracted criticism from environment protection bodies and NGOs, around the world. Local farmers and residents have also repeatedly opposed hydraulic fracturing, owing to its impact on health and farming.
- Additionally, a typical fracking well requires approximately 2-10 million gallons of water during fracking operations, which puts additional strain on the water supply, particularly in the drought-prone regions.
- In West Texas, where the Permian Basin (which is expected to drive the growth of shale gas activities in the United States ) is located, shale gas companies already faced opposition and criticism from the farmers, owing to the water shortage due to hydraulic fracturing.
- The United States Geological Survey (USGS) blamed shale gas activities for the increase in earthquakes in the recent times, in certain parts of the Central and Eastern United States that are well-known for the extraction of oil and gas.
- Thus, this is expected to restrain the market during the forecast period.
North America to Dominate the Market
- In 2018, the statistics of the International Trade Center (ITC) observed that the USA climbed to first place in the world ranking of gas producers due to the increasing production of unconventional gas. Major companies are investing in shale gas because it is an excellent option to reduce carbon footprint. However, the IRENA’s database has estimated that over three-quarters of the onshore wind and four-fifths of the solar PV project capacity due to be commissioned in 2020 worldwide should produce cheaper electricity than any coal, oil, or natural gas option. This factor is likely to have a negative impact on the ongoing shale gas revolution in the United States.
- Canada is known to have significant conventional gas reserves, and the country was a key supplier of natural gas to the United States for decades until the recent shale boom in the country. However, with conventional natural gas sources in decline, Canada’s industry is turning to unconventional sources, including shale gas. Many oil and gas companies are now exploring and developing shale gas resources in Alberta, British Columbia, Quebec, and New Brunswick, which could balance the difference in shale gas production in the coming future.
- An estimation by EIA shows that American dry shale gas production in 2018 is about 593.23 bcm and is equal to approximately 69 % of total natural gas production in the United States. The current scenario of the region demands more natural gas supply during the forecast period, which attracts investment in the exploration and production of shale gas.
The global shale gas market is moderately fragmented due to many companies operating in the industry. The key players in this market include Chesapeake Energy Corporation, Royal Dutch Shell PLC, Exxon Mobil Corporation, PetroChina Company Limited, and ConocoPhillips, among others.
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