Between 2005 and 2010 the country’s shale-gas industry, which produces natural gas from shale rock by bombarding it with water and chemicals in a technique known as hydraulic fracturing or “fracking,” grew by 45 per cent a year. As a proportion of America’s overall gas production, shale gas has increased from four per cent in 2005 to 24 per cent today.
America produces more gas than it knows what to do with. Its storage facilities are rapidly filling, and its gas price — because prices for gas, unlike oil, are set regionally — has collapsed. Last month it dipped below $2 per million British thermal units, less than a sixth of the pre-boom price and too low for producers to break even.
Those are problems most European and Asian countries, which respectively pay roughly four and six times more for their gas, would relish. America’s gas boom confers a huge economic advantage. It has created hundreds of thousands of jobs, directly and indirectly, and it has rejuvenated several industries, including petrochemicals, where ethane produced from natural gas is a raw material.
The gas price is likely to rise in the next few years because of increasing demand. Peter Voser, CEO of Royal Dutch Shell, an oil firm with big shale-gas investments, expects it to double by 2015.
Yet it will remain below European and Asian prices, so the industry should still grow. America is estimated to have enough gas to sustain its current production rate for more than a century.
This is astonishing. Barely five years ago America was expected to be a big gas importer. Between 2000 and 2010 it built infrastructure to “re-gasify” more than 100 billion cubic metres of imported liquefied natural gas. In 2011, however, American LNG imports were less than 20 bcm. Efforts are now underway to convert idle re-gasification terminals into liquefaction facilities in order to export LNG. Plans for a terminal in Sabine Pass, La., are expected to be approved in June.
The shock waves of America’s gas boom are being felt elsewhere. Development of Russia's vast Shtokman gas field in the Barents Sea, a $40-billion project which was intended to supply America with LNG, has stalled. Qatari LNG, once earmarked for America, is going to energy-starved Japan. A bigger change is expected, however, with large-scale shale-gas production possible in Argentina, Australia, China and several European countries, including Poland and Ukraine.
The Economist mentions the environmental issues in connection with the "fracking" process, but rightly points out that they can be managed:
The greens have a case, but they exaggerate it. So long as well shafts are properly sealed, there is hardly any risk that fracking will poison groundwater. By eliminating venting, methane emissions can be kept to an acceptable minimum.
All major studies have confirmed that shale gas extraction, properly managed, does not pose any serious environmental risks.
Shale gas is the backbone of the US economic revival. Shale oil will add to the positive development. And the shale gas revolution will not be confined only to the US: BP e.g. forecasts that "growth in shale oil and gas supplies, along with other fuel sources, will make the western hemisphere virtually self-sufficient in energy by 2030."