A Baker Institute study dismisses the notion, recently debated in the U.S. media, that the shale gas revolution is a transitory occurrence. The study projects that U.S. shale production will more than quadruple by 2040 from 2010 levels of more than 10 billion cubic feet per day, reaching more than 50 percent of total U.S. natural gas production by the 2030s. The study incorporates independent scientific and economic literature on shale costs and resources, including assessments by organizations such as the U.S. Geological Survey, the Potential Gas Committee and scholarly peer-reviewed papers of the American Association of Petroleum Geologists,
“The idea that shale gas is a flash-in-the-pan is simply incorrect,” said Kenneth Medlock III, the James A. Baker III and Susan G. Baker Fellow for Energy and Resources Economics and co-author of the study. “The geologic data on the shale resource is hard science and the innovations that have occurred in the field to make this resource accessible are nothing short of game-changing. In fact, we continue to learn as we progress in this play, and it is vital that we understand and embrace the opportune circumstances that shale resources provide. U.S. policymakers should not get diverted from the real opportunities that responsible development of our domestic shale resources present.”
The study notes that multiple, independent estimates of future shale gas production done over the years have come up with higher and higher projections. A 2003 study by National Petroleum Council estimated 38 tcf of technically recoverable reserves in the US. In 2005, the EIA upped it to 140 tcf. This year, Advanced Resources International put that figure at 865 tcf.
Other findings of the study include that U.S. shale gas will:
- Reduce competition for LNG supplies from the Middle East and thereby moderate prices and spur greater use of natural gas, an outcome with significant implications for global environmental objectives.
- Combat the long-term potential monopoly power of a “gas OPEC.”
- Reduce U.S. and Chinese dependence on Middle East natural gas supplies, lowering the incentives for geopolitical and commercial competition between the two largest consuming countries and providing both countries with new opportunities to diversify their energy supply.
- Reduce Iran’s ability to tap energy diplomacy as a means to strengthen its regional power or to buttress its nuclear aspirations.