Shale oil (light tight oil) is rapidly emerging as a significant and relatively low cost new unconventional resource in the US. There is potential for shale oil production to spread globally over the next couple of decades. If it does, it would revolutionise global energy markets, providing greater long term energy security at lower cost for many countries.
Recent advances in combining two drilling techniques, hydraulic fracturing and horizontal drilling, have allowed access to large deposits of shale resources—that is, crude oil and natural gas trapped in shale and certain other dense rock formations. As a result, the cost of that “tight oil” and “shale gas” has become competitive with the cost of oil and gas extracted from other sources. Virtually non-existent a decade ago, the development of shale resources has boomed in the United States, producing about 3.5 million barrels of tight oil per day and about 9.5 trillion cubic feet (Tcf ) of shale gas per year.
The production of tight oil and shale gas will continue to grow over the next 10 years—by about 30 percent and about 60 percent, respectively, according to a recent projection by the Energy Information Administration (EIA). However, the benefits of such oil price reductions will vary significantly by country. Large net oil
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It could also influence the dynamics of geopolitics as it increases energy independence for many countries and reduces the influence of OPEC. The potential environmental consequences of an increase in shale oil production are complex and appropriate regulation will be needed to meet local and national environmental concerns. Shale oil could have adverse environmental effects by making alternative lower carbon transport fuels less attractive, but might also displace production from higher cost and more environmentally sensitive