Unconventional gas in Europe
Europe is the world's second-largest natural gas market and demand is continuing to rise, particularly as a preferred fuel for power generation. The International Energy Agency (IEA) estimates there are about 344 trillion cubic meters of technically recoverable unconventional gas reserves around the world, with around 19 trillion cubic meters found in Europe.
In Europe, unconventional gas potential has been identified in Poland, Germany, France, the Netherlands, Sweden, Denmark, Hungary, Ukraine, Romania, Turkey and the UK. Exploration activity is underway in some areas, but it will likely be years before the full potential is realized. ExxonMobil forecasts global demand for energy to rise by 25 per cent between 2014 and 2040. Diversifying Europe's supply of natural gas through domestic and imported natural gas, including that produced from unconventional formations, will become increasingly important to meet the Europe’s energy security objectives.
Today, 50 - 60 per cent of European natural gas supplies come from domestic production and the balance is supplemented by imports from major global gas producers, including Russia, the Middle East, the Caspian states, North Africa and potentially the United States. According to IEA projections, by 2040 81 per cent of the EU's total primary gas supply will come from imports, up from 50 per cent in 2010. The sources of its imports are expected to diversify and include a greater share of liquefied natural gas (LNG).
Further exploration and technological advances will reinforce Europe's extraction capabilities, help reduce its reliance on gas imports, and contribute to meeting European Union greenhouse gas emission reduction targets, while boosting economic growth.
Unconventional gas in the U.S.
The "Shale Gas Revolution" in the United States has changed the North American energy landscape. Adding unconventional gas to natural gas production has allowed the United States, one of the world's largest energy consumers, to supply more and more of its demand from domestic sources.
According to the Energy Information Administration (EIA), in 2013, unconventional gas represented 59 per cent of total U.S. natural gas production—40 per cent from shale gas and 19 per cent from other unconventionals. By 2035, unconventional gas is projected to account for 79 per cent of total U.S. gas production—60 per cent from shale gas and 19 per cent from other unconventional gas. Natural gas is fast becoming the new fuel of choice for the U.S. power sector: in 2011, coal-fired power generation slumped by 19 per cent while gas-fired power generation has increased by 38 per cent, according to the U.S. Department of Energy.
To date, the economic benefits of the shale gas industry in the U.S. have been significant. Currently, the unconventional oil and gas industry supports 1.7 million jobs, and residents and small businesses have benefitted from an increase in disposable income of an average of $1,200 per household in 2012, according to an IHS study. By 2035, shale gas production is projected to treble, bringing $1.9 trillion in capital investment into the U.S. economy and generating nearly $1 trillion in local, state and federal tax revenues, according to the same forecasters.
The evolving U.S. energy demand and supply structure is also changing the global energy supply. Decreasing U.S. reliance on imported liquefied natural gas (LNG) is diverting shipments to Europe and other parts of the world. If shale gas exploration continues on its existing trajectory, the United States could potentially move from being an LNG importer to an exporter, if domestic regulations permit this.
On this website, we adhere to the international classification of tight gas within the group of unconventional gas, followed by e.g. the International Energy Agency (IEA). In some countries, like for example Germany, tight gas has been produced successfully for many years since the 1990s. Given the long experience with these reservoirs, many experts no longer categorize tight gas as unconventional gas.