Market Trends of Shale Gas Industry
Increasing Environmental Concerns to Restrain the 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 environmental protection bodies and NGOs around the world. Due to its impact on health and farming, local farmers and residents have repeatedly opposed hydraulic fracturing.
- 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 drought-prone regions.
- In 2022, North America and Asia-Pacific recorded the world's highest carbon dioxide emissions. While Europe, the Middle East, and Africa tend to have the lowest emission. The global carbon dioxide emissions from fossil fuels and industry totaled 37.15 billion metric tons in 2022. Emissions are projected to increase by 1.1 percent in 2023 to reach a record high of 37.55 billion metric tons. Since 1990, global CO₂ emissions have increased by more than 60 percent.
- Recently in West Texas of the United States, where the Permian Basin (expected to drive the growth of shale gas activities in the United States) is located, shale gas companies faced opposition and criticism from the farmers due to the water shortage.
- The United States Geological Survey (USGS) blamed shale gas activities for the increase in earthquakes in recent times in certain parts of the Central and Eastern United States that are well-known for oil and gas extraction.
- Thus, the increasing environmental concerns are expected to restrain the market during the forecast period.
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North America to Dominate the Market
- The United States is the largest producer of shale gas in the world. Different countries, such as Brazil, Canada, China, and Argentina, have tried to emulate the American shale boom but have not been able to succeed. However, large progress has been made in China, but due to the difficulties posed by the unstable reservoirs, shale gas production may only rise slightly in the forecast period.
- According to U.S. Energy Information Administration (EIA) in 2022, U.S. dry natural gas production from shale formations was about 28.5 trillion cubic feet (Tcf) and equal to about 80% of total U.S. dry natural gas production in 2022.Shale gas production may increase further due to new wells being drilled across the country.
- While 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 may balance the difference in shale gas production in the coming future.
- An Energy Information Agency (EIA) estimation shows that the current scenario of the region may demand more natural gas supply during the forecast period, which may attract investment in the exploration and production of shale gas.
- Hence, North America is expected to dominate the market due to the overwhelming production of shale on the continent.
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