Shale Gas: And the Hits Just Keep On Coming

It needs to be broadcast loud and clear: energy crises are the result of 'above the ground geopolitics' not a lack of global resources. When it comes to supply, as the latest U.S. Energy Information Administration (EIA) report assessing recoverable shale deposits in 14 regions/32 countries outside North America makes clear, we need to ditch the alarmism of the doom and gloom-mongers once and for all. While talk of energy crises sell books and make eye catching headlines, the fact is that current circulating maps of global energy reserves have been rendered meaningless.

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Energy insiders may be striving, by their own admission, to avoid hyperbole when it comes to the shale gas revolution, but the simple fact is that worldwide shale gas and oil along with Canada's gigantic Athabasca Oil Sands are sending recoverable energy figures stratospheric. That's it. Hyperbole done -- but it's justified. So let's hunker down on the hard facts.

World shale gas resources

The sheer magnitude of what this latest EIA report World Shale Gas Resources: An Initial Assessment of 14 Regions Outside the United States contains cannot be overstated. Here's just a taster from the report that gives perspective:

Although the shale gas resource estimates will likely change over time as additional information becomes available, the report shows that the international shale gas resource base is vast. The initial estimate of technically recoverable shale gas resources in the 32 countries examined is 5,760 trillion cubic feet ... Adding the U.S. estimate of the shale gas technically recoverable resources of 862 trillion cubic feet results in a total shale resource base estimate of 6,622 trillion cubic feet for the United States and the other 32 countries assessed. To put this shale gas resource estimate in some perspective, world proven reserves of natural gas as of January 1, 2010 are about 6,609 trillion cubic feet, and world technically recoverable gas resources are roughly 16,000 trillion cubic feet, largely excluding shale gas. Thus, adding the identified shale gas resources to other gas resources increases total world technically recoverable gas resources by over 40 percent to 22,600 trillion cubic feet.

In 'Shale Gas's Wow! Moment' on his excellent shale gas commentary site No Hot Air, Nick Grealy rightly enthuses: "Basically adding shale adds 40 per cent to world gas resources, not far off the US Potential Gas Committee report of 2009 figures for US shale resources. Which now seem conservative, but who is going to quibble?" Well possibly, the energy doom-and-gloom mongers of peak alarmism -- all set to lose lucrative new book deals, I guess. Make no bones about it, the shale gas and oil phenomenon is changing the parameters of the global energy debate, as the EIA map below makes plain enough. And remember, these are 'recoverable resources'. Source to 'EIA, 2011' But even the EIA report itself presents what is widely known to be a conservative estimate there are still a number of potentially big players missing. If map 1 above alone changes the energy resource then if we are able to include the some other shale big hitters, including Russia, India and particularly China, then the need to rip up oft-quoted figures becomes imperative. Try this: Source it to 'No Hot Air, 2011'. See what I mean about becoming more realistic and factoring in potentially 'stratospheric' new energy figures?

Transitional bridge

One particularly fascinating thing is that, as it turns out, Europe does have significant energy resources apart from coal and these are liberally spread at that. The list runs from around 8 trillion cubic feet in Germany right up to France (180 trillion c/f) and Poland with an enormous 187 trillion c/f. But even for heavy gas consumers like the UK with around 20 trillion c/f projected, it will mean more than doubling what is currently still available from North Sea resources. The EIA table shows recoverable resources on a mind-boggling scale around the globe. China, at a staggering 1,275 trillion c/f. Argentina at 774 trillion c/f, Mexico at 681 trillion c/f, South Africa at 485 trillion c/f, Canada at 388 trillion c/f. Algeria...well, you get the message. And who knows just how much shale gas or oil lies beneath the still un-assessed Middle East? One thing is clear. Pretty soon we are going to have to stop referring to shale deposits as 'unconventional' as they are soon set to become highly conventional indeed. Equally, we need to understand that this EIA assessment is just an initial survey and, given the scant nature of some of the information, is a wholly conservative estimate, as the report itself makes clear. It should also be understood that the EIA's assessment excludes potential international shale oil deposits, such as Canada's massive Athabasca Sands and Israel's just announced onshore developments, as well as offshore shale gas basins, coal-bed methane, tight gas and other deposits. Above all, what the report confirms is that hundreds of years of fossil fuels still remain to be tapped. Just as significantly, much of it is in own 'backyards' -- and away from the control of dictatorial regimes who use current reserves as geopolitical leverage. Now we could do it the French way. That would be: ignore it, leave it in the ground and desperately cast around for alternatives to Russian gas. Or we could do it the sensible way -- understanding that that 'le fracking' and SAGD (for oil sands) processes are tried and trusted, no matter what the eco-media likes to assert -- start drilling and save billions of dollars on unnecessary oil and gas imports. Tough call, wouldn't you say?