Shale gas is natural gas produced from shale. Shale gas has become an increasingly more important source of natural gas in the United States over the past decade, and interest has spread to potential gas shales in Canada, Europe, Asia, and Australia. One analyst expects shale gas to supply as much as half the natural gas production in North America by 2020.^[1]

Some analysts expect that shale gas will greatly expand worldwide energy supply.^[2] A study by the Baker Institute of Public Policy at Rice University concluded that increased shale gas production in the US and Canada could help prevent Russia and Gulf countries from dictating higher prices for the gas it exports to European countries.^[3] The Barack Obama administration in the US believes that increased shale gas development will help reduce greenhouse gas emissions.^[4]

Because shales ordinarily have insufficient permeability to allow significant fluid flow to a well bore, most shales are not commercial sources of natural gas. Shale gas is one of a number of “unconventional” sources of natural gas; other unconventional sources of natural gas include coalbed methane, tight sandstones, and methane hydrates. Shale gas areas are often known as resource plays (as opposed to exploration plays). The geological risk of not finding gas is low in resource plays, but the potential profits per successful well are usually also lower.

Shale has low matrix permeability, so gas production in commercial quantities requires fractures to provide permeability. Shale gas has been produced for years from shales with natural fractures; the shale gas boom in recent years has been due to modern technology in hydraulic fracturing to create extensive artificial fractures around well bores.

Horizontal drilling is often used with shale gas wells, with lateral lengths up to 5,000 feet within the shale, to create maximum borehole surface area in contact with the shale.

Shales that host economic quantities of gas have a number of common properties. They are rich in organic material (0.5% to 25%),^[5] and are usually mature petroleum source rocks in the thermogenic gas window, where high heat and pressure have converted petroleum to natural gas. They are sufficiently brittle and rigid enough to maintain open fractures. In some areas, shale intervals with high natural gamma radiation are the most productive, as high gamma radiation is often correlated with high organic carbon content.

Some of the gas produced is held in natural fractures, some in pore spaces, and some is adsorbed onto the organic material. The gas in the fractures is produced immediately; the gas adsorbed onto organic material is released as the formation pressure is drawn down by the well.

Contents 1 Environment 2 Economics 3 Australia 4 Canada 4.1 Utica Shale, Quebec 4.2 Muskwa Shale, British Columbia 4.3 Montney Shale, British Columbia 4.4 Horton Bluff Shale, Nova Scotia 5 China 6 Europe 6.1 Germany 6.2 Hungary 6.3 Poland 6.4 Sweden 6.5 United Kingdom 7 India 8 United States 9 References

[edit] Environment

Chemicals are added to the water to facilitate the underground fracturing process that releases natural gas. The resulting volume of contaminated water is generally kept in above-ground ponds to await removal by tanker or injected back into the earth.

[edit] Economics

Although shale gas has been produced for more than 100 years in the Appalachian Basin and the Illinois Basin, the wells were often economically marginal. Higher natural gas prices in recent years and advances in hydraulic fracturing and horizontal completions have made shale gas wells more profitable. Shale gas tends to cost more to produce than gas from conventional wells, because of the expense of massive hydraulic fracturing treatments required to produce shale gas, and of horizontal drilling. However, this is often offset by the low risk of shale gas wells.

To date, all successful shale gas wells have been in rocks of Paleozoic and Mesozoic age.

North America has been the leader in developing and producing shale gas because of high gas prices in that market. The great economic success of the Barnett Shale play in Texas in particular has spurred the search for other sources of shale gas across the United States and Canada.

[edit] Australia

Beach Petroleum Limited has announced plans to drill for shale gas in the Cooper Basin, South Australia.^[6]

[edit] Canada

Canada has a number of prospective shale gas targets in various stages of exploration and exploitation in British Columbia, Alberta, Saskatchewan, Ontario, Quebec, and Nova Scotia.^[7]

[edit] Utica Shale, Quebec

The Ordovician Utica Shale in Quebec potentially holds 4×10^¹² cu ft (110 km³) at production rates of 1 MMCF per day^[8][9] From 2006 through 2009 24 wells, both vertical and horzontal, were drilled to test the Utica. Positive gas flow test results have been reported, although none of the wells had been put on production at the end of 2009.^[10] Gastem, one of the Utica shale producers, has announced plans to explore for Utica Shale gas across the border in New York state.^[11]

The Utica shale is a black calcareous shale, from 150 to 700 feet thick, with from 3.5% to 5% by weight total organic carbon. The Utica Shale play focuses on an area south of the St. Lawrence River between Montreal and Quebec City. Interest has grown in the region since Denver-based Forest Oil Corp. announced a significant discovery there after testing two vertical wells. Forest Oil said its Quebec assets may hold as much as four trillion cubic feet of gas reserves, and that the Utica shale has similar rock properties to the Barnett shale in Texas. Quebec has been known to have natural gas reserves, but advanced horizontal drilling techniques and higher gas prices are only now making the play potentially economically viable, observers say.^{[citation needed]}

Forest Oil, which has several junior partners in the region, has drilled both vertical and horizontal wells. Calgary-based Talisman Energy has drilled five vertical Utica wells, and began drilling two horizontal Utica wells in late 2009. Other companies in the play are Quebec-based Gastem and Calgary-based Canbriam Energy.

[edit] Muskwa Shale, British Columbia

The Devonian Muskwa Shale of the Horn River Basin in northeast British Columbia is said to contain 6×10^¹² cu ft (170 km³) of recoverable gas. Major leaseholders in the play are EOG Resources, Encana, and Apache Corp.^[12] The government of British Columbia recently announced lease proceeds for 2008 to be in excess of CDN$2.2 billion, a record high for the province, with the majority of the proceeds coming from shale gas prospects.

[edit] Montney Shale, British Columbia

The Montney Shale play is in east-central British Columbia.^[13]

[edit] Horton Bluff Shale, Nova Scotia

In 2009, Triangle Petroleum Corporation completed two gas wells in the Horton Bluff Shale, of the Windsor Basin, Nova Scotia.^[14]

[edit] China

Potential gas-bearing shales are said to be widespread in China, although as yet undeveloped.^[15] In November 2009, US President Barack Obama agreed to share US gas-shale technology with China, and to promote US investment in Chinese shale-gas development.^[16]

[edit] Europe

While Europe has no shale gas production as yet, the success of shale gas in North America has prompted geologists in a number of European countries to examine the productive possibilities of their own organic-rich shales.^[17][18][19] Norwegian company StatoilHydro is in a joint venture with Chesapeake Energy to produce Marcellus Formation shale gas in the eastern US, and has indicated interest in bringing knowledge gained in the US to European shale gas prospects. Russian giant Gazprom announced in October 2009 that it may buy a US shale-gas producing company to gain expertise which it could then apply to Russian shale gas prospects.^[20] Potential host formations for shale gas include shales in northeast France,^[21] the Alum Shale in northern Europe, and Carboniferous shales in Germany and the Netherlands.^[22]

[edit] Germany

ExxonMobil holds 750,000 acres of leashold in the Lower Saxony Basin of Germany, where it plans to drill 10 shale-gas wells in 2009.^[23]

[edit] Hungary

In 2009, ExxonMobil drilled the first wells for shale gas in the Makó Trough in Hungary.^[24]

[edit] Poland

ConocoPhillips has announced plans to explore for shale gas in Poland.^[25]

[edit] Sweden

Shell Oil is evaluating the viability of the Alum Shale in southern Sweden as a source of shale gas.^[26][27]

[edit] United Kingdom

Eurenergy Resource Corporation has announced plans to drill for shale gas in southern England's Weald Basin.^[28]

[edit] India

Some companies have expressed interest in exploring for shale gas in India. A complication to shale gas in India is that the government-issued leases for conventional petroleum exploration do not include unconventional sources such as shale gas.^[29]

[edit] United States

The first commercial gas well drillied in the US, in 1821 in Fredonia, New York, was a shale gas well producing from the Devonian Fredonia Shale formation. After the Drake Oil Well in 1859, however, shale gas production was overshadowed by much larger volumes produced from conventional gas reservoirs.

In 1996, shale gas wells in the United States produced 0.3 TCF (trillion cubic feet), 1.6% of US gas production; by 2006, production had more than tripled to 1.1 TCF per year, 5.9% of US gas production. By 2005 there were 14,990 shale gas wells in the US.^[30] A record 4,185 shale gas wells were completed in the US in 2007.^[31] In 2007, shale gas fields included the #2 (Barnett/Newark East) and #13 (Antrim) sources of natural gas in the United States in terms of gas volumes produced.^[32]

[edit] References