It’s hard to grasp just how important the ‘shale gas revolution’ is to the United States.
In a talk this month in Argentina to the Latin America Summit, Robert F. Cekuta of the U.S. State Department’s energy resources desk, described what’s happening.
- The United States is now a net exporter of natural gas. Experts projected a few years ago that the U.S. would have to import 64 percent of its natural gas needs by 2035. But exports of LNG have started, due in no small part to the “shale gas revolution” in the United States.
- Current projections estimate that unconventional gas – including shale gas, tight gas, and coal-bed methane – could make up more than 75 percent of U.S. natural gas production and that U.S. gas production could reach 33.14 trillion cubic feet in 2040.
- The shale gas boom is attracting interest in industries such as steel, glass, and cement production, supporting the contention of a number of studies that low-priced natural gas can be a feedstock catalyzing a renaissance in American manufacturing, or what European Union Commissioner for Energy, Günther Oettinger called the “re-industrialization of the United States.”
- Unconventional oil and gas development is currently projected to create, directly or indirectly, almost 2.5 million jobs and add $350 billion to the U.S. GDP by 2015.
- Producers in the United States are able to capitalize on factors like a well-functioning market, attractive investment frameworks, extensive pipeline networks and other infrastructure, and an experienced and capable workforce from the conventional upstream side of the industry.
- Single unconventional wells can cost twice as much or more than conventional wells. Up-front exploration and initial production costs are high relative to conventional costs, and high depletion rates after initial production require continuing capital expenditures to maintain and increase target levels of shale gas or oil production. An attractive fiscal regime has been essential to the success of unconventional resource development in the United States.
- Unconventional resource development is changing America’s engagement with major energy exporters. A few years ago, the dialogue with OPEC and other major producers was based on U.S. oil import needs. Discussions today look at declining import needs of the Americas, the rising import needs of Asian and non-OECD markets, and the growing number of new oil and gas producers.