Shale to be a geopolitical game changer (Shale Oil, Part: V)
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The United States is moving away from the necessity to import large volumes of natural
gas for its domestic requirements.
Over the last few years it has become possible to
produce vast amounts of shale gas that was previously uneconomic to extract.
Between
2007 and 2012, shale gas production in the U.S.
rose from 1.3 trillion cubic feet to around
8.5 trillion cubic feet, and it now accounts for almost 35 percent of total U.S.
gas roduction,
a figure that is expected to rise to nearly 50 percent by 2030.
(1) This contrasts with the
situation that existed just a decade ago when natural gas production in the United States
was in decline:
At that time the Energy Information Administration (EIA) projected that in order to keep up
with rising demand the country would need to import 26 percent of its total natural gas
consumption in 2020.
The combination of horizontal drilling and hydraulic fracturing, otherwise known as
"fracking,” has allowed drillers to release natural gas from shale reserves that had
previously been uneconomic to exploit.
According to the March 2013 analysis by The
American Security Project, “The Geopolitical Implications of U.S.
Natural Gas Exports” (2), the enormous production has resulted in a glut of supply and
rock-bottom prices, and producers hope to relieve the glut of natural gas in the U.S.
by
exporting surplus production, taking advantage of higher prices around the world.
However, the report points out the fact that under the Natural Gas Act, first passed in 1938
and amended several times since, the export of natural gas is illegal without approval from
the Secretary of Energy.
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