Can Shale Go Global? – 6 Key Considerations
The success of shale in the US has been phenomenal. Gas prices have dropped to a third of that in Europe, and net oil imports have dropped down from 60% in 2005 to 42% today. With the success story spreading, many nations abroad have begun to explore their own potential reserves and ask the question, ‘can shale go global?’.
In answer to this question it is reasonable to consider occurring strengths in the US, and compare these with issues developing shale nations may encounter. Here is my list of 6.
1. Developed Infrustructure
The US benefits from a well developed energy infrastructure that has enabled and supplied its residents for almost 100 years. Shale may be new, but a developed infrastructure has been key in bringing energy to the consumer.
2. Ownership
Unlike the UK, the US benefits from surprisingly loose private ownership laws. These make it far easier for oil & gas companies to approach and attain resources, it also makes it easier for those who hold rights to the land to decide what they deem best to do with it.
3. Drillers
A competitive industry setting allows for a great number of independent drillers. In this regard, competition makes for fast paced and exciting discoveries made across the entire nation.
4. Risk Capital
Easy access and solutions for risk capital can often allow for spectacular returns over a small period of time. In the energy industry, and with shale in particular, US risk capital has benefitted the entire industry.
5. Supply Chains
Equally, flexible and adaptive supply chains have allowed the transfer system of organisations, people, technology, activities, information and resources to flourish even with frequent changes at state and national level.
6. Regulation
Relatively supportive state and national regulation, along with encouraging fiscal regimes have allowed for shale to be untapped whilst some nations question the resources benevolence.
Have we left any considerations out?
Do you think other emerging shale nations have a chance at US success?
Let us know your thoughts by commenting below.
Alternatively if you’d like to discover and learn more about shale global expansion, why not attend our event Shale Gas World UK & Shale Gas World Europe.
at 12:06 pm
The biggest problem in shale gas/shale oil going anywhere (not only global) is the public acceptance issue. Whatever measures are taken to mitigate the technical and financial risks, if the local residents say “no”, that’s the end. Companies and nations are used to explore and produce offshore or in remote, non-developed areas of the globe, away from somebody’s back garden. Once, exploration reached our home, things changed dramatically.
at 1:16 pm
good points listed.
for Europe i believe point 2. Ownership, is a key deterrent to allow shale gas drilling to proceed.As we all experience in Europe we are also on point 3 and 6 pretty far behind the US and nothing is expected to change that. shortsighted windmill believers are racking up tax money to be pumped into a green nightmare which will need more tax money to fix the power distribution network to balance short term delivered wind power all over Europe at exorbitant prices.
at 5:01 pm
Water availability may be an issue concerning certain geographies. Gás pipeline and storage facilities may also be of concern.
at 3:50 pm
It is interesting to see the impact how China (no private land but government control) will be on the factors listed above. They are rollin out a large number of shale plays this year with numerous smaller Chinese companys, not the 4 major NOCs.