Natural Gas & The Low-Carbon Economy
Figure 6: Top 10 Global Natural Gas Producers, 2008
oil and coal and consequently higher emissions of GHGs. Proven global reserves of natural gas – defined
Source: EIA
another concern. Thus far, seismic activity from fracturing is well below the level that would be noticeable to humans and can be detected only by very sensitive instruments. Data from these instruments can be used to predict whether there is a risk of a larger earthquake being triggered by hydraulic fracturing. This, too, is an area that requires responsible oversight from industry and regulators. Important legal and regulatory issues surrounding the
production of shale gas remain unresolved. For example, although the underground injection of fluids produced during fracturing activities are regulated by the EPA under the Safe Drinking Water Act, the hydraulic fracturing procedure itself is exempt, and as a result is only regulated at the state level. State- level regulation currently varies widely, and the sharing and emulation of best practices among states – particularly those in which these resources are first developed – are essential. Additional research and industry transparency are needed to improve understanding of and decision-making about hydraulic fracturing at the local, state, and federal levels. Unless trust can be established between local stakeholders and gas producers, natural gas’s ability to fulfil its potential contribution to a low- carbon energy system will be weakened.
Beyond North America Although the natural
as gas that geological and engineering analyses indicate are recoverable from known reservoirs under existing economic and operating conditions – have risen significantly in the last three decades. According to the IEA, only 14% of the world’s ultimately recoverable conventional resources have been extracted. At current global rates of production, remaining conventional gas resources alone could last up to 130 years. Many countries with extensive gas resources have hardly begun to
exploit them, and in some cases burn them off as an unwanted by-product of oil production. This is because using gas requires extensive investment in pipelines for distribution while exporting it means building complex and expensive facilities for super-cooling and liquefying it. The recent growth of unconventional gas resources in the US
gas industry has its deepest historical roots in North America, it has become an important global fuel in recent decades. In 2008, global production of natural gas totalled 137 trillion cubic feet, with the US and Russia responsible for 19 and 18% of global production respectively. Other leading producers include Canada, Iran, and Norway. In most countries, however, natural gas plays a much smaller role than it does in North America, which often means higher levels of dependence on
worldPower 2010
The recent growth of unconventional gas resources in the US has already had a significant impact on global markets
has already had a significant impact on global markets. Surging gas supplies contributed to a 30% reduction in net imports of gas to the US between 2007 and 2009, putting downward pressure on the price of internationally traded gas in Europe and Asia. At the same time, efforts to identify and acquire unconventional gas resources have risen in many countries where domestic gas has until now played little role in meeting energy needs. Much of this effort is being led by major oil companies such as BP, ExxonMobil, Statoil, and Total, all of which have recently gained technical expertise via acquisitions and partnerships in North America. And much of the technology for unconventional gas production is held by international oil and gas service companies such as Halliburton and Schlumberger, which are actively deploying it for client companies around the globe. Much of the exploration activity outside of North America has occurred in Europe. Most European countries have legal systems that allow and encourage private development of gas resources. In addition, concerns about over-dependence on Russian gas, highlighted by recent supply disruptions caused by pricing disputes, have encouraged European
governments to seek new sources of gas. Early assessments suggest that unconventional gas resources are significant in Europe, though not likely as abundant as in North America. Among the countries where exploration efforts have shown the most promise are Austria, Germany, Hungary, Poland, and Sweden.
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