Shale gas--the unfolding story

Howard Rogers

Oxford Review of Economic Policy, 2011, vol. 27, issue 1, 117-143

Abstract: In the early 2000s US gas production was in slow but steady decline despite increasing drilling activity. As US natural gas prices rose in response to the resulting tight market, the only supply-side solution appeared to lie in the development of liquefied natural gas (LNG) projects in the Middle East and Africa for importation to the North American market. Almost unnoticed in its early stages, the US shale gas phenomenon gathered momentum from 2004 onwards through the combination and application of two proven technologies, namely horizontal drilling and pressure-induced hydraulic fracturing or 'fracking'. The pioneers of this approach were not the majors but the much smaller, domestically focused 'independent' upstream companies who, together with a well-established and adaptable service sector, instigated what is now commonly referred to as the 'shale gas boom' and which has increased US natural gas production to the point where only minimal imports of LNG are expected to be required for the foreseeable future. This paper looks at the genesis of the US shale gas industry, the intensive nature of its operations, and the factors which have underpinned its success to date. It also addresses the question of whether similar developments might be expected in Europe and what specific challenges would need to be overcome. In a world where increased LNG supply has created trade flow and price linkages between regional gas markets, the paper also examines the impact US shale production has had on other markets through the re-direction of LNG originally intended for the US market. Copyright 2011, Oxford University Press.

Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (20)

Downloads: (external link)
http://hdl.handle.net/10.1093/oxrep/grr004 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:oxford:v:27:y:2011:i:1:p:117-143

Access Statistics for this article

Oxford Review of Economic Policy is currently edited by Christopher Adam

More articles in Oxford Review of Economic Policy from Oxford University Press and Oxford Review of Economic Policy Limited
Bibliographic data for series maintained by Oxford University Press ().