Experts at EIA Energy Conference discuss Shale Gas

Potential natural gas production from shale formations has dramatically improved North America's supply outlook, three panelists agreed during annual Energy Outlook Conference cosponsored by the US Energy Information Administration and Johns Hopkins University's School for Advanced International Studies. recently held in Washington. The technology behind it also could change gas supply patterns overseas and influence domestic demand for other fuels, they added.

Michelle M. Foss, chief economist and head of the University of Texas at Austin's Center for Energy Economics, suggested that US shale gas development will respond to market demand. "I also think the potential could be greater if the technology improves further," she said. "There have been some major strides combining lateral drilling with fracturing. But try to imagine being able to drill microscopically. All of the pore bases in these domestic formations are different. So are geological environments and water availability. There are still challenges."

It could take longer overseas, according to Andrew Slaughter, business environment manager for Royal Dutch Shell PLC's Upstream Americas division in Houston. "In North America, we have a very efficient development process, with relatively quick consumption. Other areas face major distances between production sites and markets, and have to deal with stranded supplies," he said, adding that governments could take 20 years to change policies and energy firms operate in a 45-to-50-year investment timeframe.

"Europe is struggling with similar issues," said Foss. "It's looking at what we do with shale gas because countries there have some too." Slaughter agreed that shale gas offers potential in Europe, but said it will take longer to develop than in the US. "Its significance is that a lot of it is in countries like Poland and Ukraine, which have relied heavily on Russia for their gas," he said. "If it isn't developed, their heavy reliance on coal also could continue."

Source: Caspian Energy