Source: Smithsonian. May 2013 map of shale oil and gas formation. fource U.S. EIA & USGS.
Preface. Unconventional US (and some Canadian) fracked tight oil was over 90% of how oil production increased after conventional oil peaked in 2008, but US fracked oil peaked in 2018 (and consequently all world oil, both conventional and unconventional also peaked then). Only the Permian shale basin is not in decline yet.
Shale oil and gas might not exist in the US if there hadn’t been super low interest rates making it easy to borrow billions of dollars and dumb money streaming into pension and 401k mutual funds keeping this industry alive, as Bethany McLean wrote in “Saudi America”. At one point companies were $300 billion in debt, but the money kept rolling in, so drilling continued. In 2023, all shale basins but the Permian are in decline, the best sweet spots drilled, so even in the US the end of the shale oil boom is in sight.
Although tight shale oil & gas exist elsewhere in the world, here are the main reasons it hasn’t been developed so far
- lack of existing oil and gas pipeline infrastructure
- not enough workers with expertise
- strong opposition
- the rules of being able to drill on land are much harder to overcome
- lack of fracking sand
- Seeing the high debt and bankruptcies in the US (though companies are doing better today) even when oil was $100/barrel discouraged investments abroad
- No government subsidies
- Fracking banned: France, Germany, the Netherlands, Denmark, Bulgaria and the Republic of Ireland. Lifted in the UK September 2022 due to energy crisis (but still exist in Scotland and Wales)
China is fracking mainly natural gas, and only producing 35,000 barrels per day of shale oil, less than 1% of oil production there, but has ambitions to exploit shale oil elsewhere in the country as soon as 2025 (Aizhu C 2021 PetroChina’s Gulong shale project may bolster China’s oil output. Reuters).
Argentina is producing some shale oil and gas, but their Vaca Muerta fields have slowed down temporarily as they race to build the road and pipeline infrastructure needed to extract more (Raszewski E 2022 Argentina’s Vaca Muerta shale boom is running out of road. Reuters).
As the energy crisis grows, any nation that might be able to frack will probably try to do so, and it’s being discussed in Central & South American nations, Australia, South Africa and more. But whether the expertise and geology cooperate to make it economically possible is yet to be determined. And the EROEI is low, but less of a problem today since cheap conventional oil exists to make far more expensive fracked oil possible.
Alice Friedemann www.energyskeptic.com Author of Life After Fossil Fuels: A Reality Check on Alternative Energy; When Trucks Stop Running: Energy and the Future of Transportation”, Barriers to Making Algal Biofuels, & “Crunch! Whole Grain Artisan Chips and Crackers”. Women in ecology Podcasts: Financial Sense, WGBH, Jore, Planet: Critical, Crazy Town, Collapse Chronicles, Derrick Jensen, Practical Prepping, Kunstler 253 &278, Peak Prosperity, Index of best energyskeptic posts
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Paraskova T (2022) Chinese Sinopec Raises Stakes With Massive New Shale Basin. oilprice.com & Paraskova T (2021) Why China can’t replicate America’s shale boom. oilprice.com
Unlike in the U.S., the development of shale gas resources in China is much more difficult due to more complex geography and a lack of adequate infrastructure to remote mountainous regions where most of the Chinese shale resources lie. Drilling for shale gas in China requires deeper wells since 80% of their resources are 11,500 feet down (3500 m), and also tricky because of the mountain terrain and geological constraints. Despite these barriers, Chinese state majors have managed to boost conventional and unconventional natural gas production in recent years. Shale gas output has grown by double-digit percentages over the past few years, exclusively due to the national corporations boosting development as per government directive. Last month, Sinopec announced a major shale gas discovery in the Jinshi 103HF exploratory well in the Sichuan Basin. With estimated resources of 387.8 billion cubic meters of gas
2022 September Fracking ban ends in U.K. (3 sources: CNBC, Reuters, Politico)
A 2019 ban has been lifted due to the energy crisis brought on by the Russian invasion of Ukraine, and seen as a key way to reach energy independence by 2040. but there is still opposition due to a 2.9 earthquake and fears of toxic chemicals entering the drinking water. And it still isn’t clear how much might be extracted. And it won’t happen any time soon, the four main areas with over 100 sites have yet to be explored to see if there are reserves worth exploiting. The Cuadrilla Bowland shale is technically challenging and prone to seismic activity because of faulting, making it less economic and much harder than in the US where the shale horizons are unbroken by faulting and run for tens of miles in unpopulated areas. Nor is it clear that there’s much to extract, and will take years to ramp up.
2021 Maierean A. What went wrong? Fracking in Eastern Europe. Discover Energy, Springer.
[ Here is the summary, the long version of this article has many more details ]
In 2015, Chevron ended all attempts to produce natural gas using hydraulic fracturing in Eastern Europe and claimed that “the opportunities here no longer compete favorably with other opportunities in Chevron’s global portfolio”. The move represented the most significant setback to hopeful attempts to start a new European shale gas industry. Chevron made the most serious commitment to shale efforts outside the United States, focusing on Eastern Europe. The company previously started several exploratory wells in Poland and Romania and signed agreements to start drilling in Ukraine and Lithuania. Since Chevron’s exit, Eni of Italy, Exxon Mobil and some smaller companies have also followed suit and ceased operations in the region.
In the end, aside from the differences in physical characteristics, political and social factors prevented the American experience from being replicable in Eastern Europe. In the near future, the prospects of shale gas exploration in Eastern Europe are slim. However, three unlikely scenarios could pivot countries to reconsider their position: a dramatic increase in energy prices, natural gas being reconsidered as a viable source of hydrogen and an escalation of hostility with Russia.
The U.S. experience has been largely effective due to market dynamics, a promising geology, a strong governance structure and mechanisms to minimize risks. It argues that several of these features were absent in many Eastern European countries, leading to overwhelming public distrust of fracking, despite compelling national incentives to increase domestic supplies of natural gas. Each of the factors discussed in this article explain why the American shale gas experience could not be replicated in Eastern Europe. Initial exploration attempts have been hampered by the difficulty to export fracking know-how, the fluctuation of energy prices, the difficult geology, the need for transparent regulatory reforms and the public hostility. In brief, there are more forces opposing than championing the cause of shale in the region. Policy makers were jolted by the unexpected and sustained public opposition to shale exploration. Given the general sense of political uncertainty in Europe, it is unlikely that governments will risk going against mainstream public opinion. Future energy debates will continue to address the renewed concern and policy dilemma of how to reduce the region’s dependency on gas imports from Russia.
2018 Poland Global Fracking Resources. Vinson & Elkins
The U.S. Energy Information Administration (EIA)’s 2013 World Shale Gas and Shale Oil Resource Assessment states that Poland’s four basins may contain up to 146 trillion cubic feet (Tcf) of technically recoverable shale gas reserves. On the other hand, the Polish national geological institute reported in 2012 that recoverable reserves were much lower—only between 346 billion cubic meters and 768 bcm.
While many had hoped for a boom in natural gas production in Poland, a combination of regulatory hurdles, regional unrest, low gas prices, and difficult geological conditions have caused the major oil and gas companies to leave the country. Reports indicate that, as of May 2016, exploration has not yet resulted in a single commercial well in Poland. One analyst recently opined that “the chances of Poland delivering commercial shale gas are now zero.” Poland is currently a large net importer of natural gas. In recent years, over 70% of natural gas consumed in Poland was imported, two-thirds of which was supplied by Russia.
Leggett J (2019) Why the UK government finally gave up on fracking shale for oil and gas.
Leggett studied shale and related rocks while on the faculty at Imperial college from 1978 to 1989. The UK has shale oil and gas. For 7 years it was banned, but that has ended, yet still there is tremendous opposition which has slowed down development. Leggett says that it’s likely the reserves would only last for 5 to 7 years, not the 50 years that BGS reported in 2013.