“The Paradigm Shift”

Shale Gas

- Amardeep Chhabra
 Objectives
 Is shale gas a viable resource?
 What are the problems with it?
 Is it economical?
 Where is it?
 Future trends?
 Pros n cons?
 Process?
What is Shale Gas?
 Natural gas
 Unconventional
 Found in certain types of
shale
 6000-12,000 feet deep
 Low permeability
 Expensive technology
 2,300 trillion cubic feet in
U.S.
www.energytomorrow.org
 Extraction

1. Leasing land
2. Exploration
3. Drilling
• Hydraulic fracturing
• Horizontal drilling
4. Collecting
5. $$$
6. Restoration
Unconventional vs. Conventional
Conventional gas
- Accumulations in medium to highly porous
reservoir with sufficient permeability to allow
gas to flow to producing well
- Pressure regime tends to move gas towards
producing well (i.e. natural flow)

Unconventional gas
- Deposits of natural gas found in relatively
impermeable rock formations – tight sands,
shale and coal beds
- To get resources out of the ground, artificial
pathways (fractures) have to be created
- Key technologies are horizontal drilling and
modern fracturing techniques

Consequences
- Need to understand geology better
- Need for much higher number of extraction
points
 Supporting Evidence
 Plentiful
 Cleaner than other fossil fuels
 Money $
 Jobs
• Engineering and surveying
• Construction and earthmoving
• Equipment manufacturing, service and repair
• Environmental permitting
• Water transport/wastewater management
• Servicing

 Economy
 Low maintenance
 THE GAME CHANGER

- Newest form of natural gas gaining currency.

- after pumping gas from the Krishna-Godavari basin Reliance has
proceeded to the next level in the energy space.
- spent $2 billion, in 3 acquisitions for buying shale-gas fields in US.

AS NATURAL RESOURSE- IT IS MORE DEMOCRATIC

- US has really tapped this resource, CHINA the 2nd one.

- is found in several countries, here the work has barely begun.
- can effect countries, companies and consumers.
- 2009- 13% of US energy, projected to increase to 30% in three years
 OTHER PLAYERS GRABING OPPURTUNITY

- Abdullah Bin Hamad Al-Attiyah Qatar’s minister of

energy & industy since 1992
- second largest producer of natural gas in world, after Russia
- invested $90 billion in natural gas
- gas prod. to incr. to 77million tonnes in 2011 against 22 in
2004
- strategy was oriented around selling to the two big
markets: US and Europe

Has deep pockets & a low cost of production:

. Location
. Oil wells in Gulf of Mexico at 2500 m. here at 90 m.
 WAIT MIGHT TURN OUT TO BE A LONG, EVEN FUTILE

- Henry Hub, gas at $3-4per mmbtu (million metric british thermal

unit), as $10-12in 2007-08.
- Energy prices cooling off.
- gas produc. incr,. By 14%, against 3% in crude.
- CNG replacing petrol & diesel
- share of gas 10-12%, expected to be 25% by 2020.
- K—G will reduce oil import by 10% or $9 billion.

SHALE GAS-- 1) if democratic resource- energy self sufficiency

2) prices attractive only when not long transportation or liquifid
3) pipelines.

EXXON PAID $42 million to buy XTO

 Shale Gas Potential
WORLDWIDE
 North America is currently the  Shale gas contributes an 11%
most profitable shale gas rise in natural gas in the U.S.
producer  Pennsylvania Marcellus Shale
 Worldwide development of contains about 500 trillion
shale gas plays are expected to
develop, especially in Europe cubic feet of natural gas
and Asia
 Difficult to Obtain?
- Manufacturers mindset.

- 8000-12000 feet compared to 3000-5000 ft

- success rate is not too great.

- Although shale gas is one of the fastest growing trends in

onshore oil and gas exploration there is still a long way to go!

- Better, more efficient technology needs to be obtained.

- Natural gas historically has only provided 22% of the total

energy consumed.
 Difficult to Obtain
 Each gas shale basins is different and each has
a unique set operational challenges.

 Because of these differences, the development

of shale gas resources in each of these areas
faces potentially unique opportunities and
challenges.
 Benefits
 Natural Gas is the cleanest of all fossil fuels
• Can reduce the emissions of pollutants into the
atmosphere
 The main products of natural gas combustion
are carbon dioxide and water vapor
• Carbon dioxide is a less potent pollutant
 Environmental Benefits
 Natural gas does not
contribute much to smog
• Emits low levels of nitrous
oxide and almost no particulate
matter
 Can be used to fuel vehicles
• Cut down on the emissions from
gasoline and diesel.
 The Social Spectrum
PRO
 Means more jobs
 Less pollution
 There is money to be had
 May cause lower prices for fuel
in the future
CON
 There are many development
issues when it comes to shale
gas
 People don’t necessarily want
their land dug up
 Wildlife advocates worry about
the disturbance of habitats
 The Political Spectrum
PRO
 Greater energy security
 More money to be had by local
and state governments
 Allows for less dependence on
foreign oil
• Shale Gas can be developed in
America
CON
 In developing a shale gas there
are a lot of factors that need to
be taken into consideration.
 There is an abundance of
paperwork a contractor needs
to go through to get the
approval to harvest shale gas.
 Economic Issues
 Advances in Hydraulic fracturing and
horizontal completions
 Costs more to produce but low risk of shale
gas wells
 North America the developing leader
 Penn State study showed
• 29,00 jobs
• 2.3 billion dollars to the economy
 Conclusion
 Shale gas is one such area that will give us the
technological edge if we move in fast.” If the
shale story unfolds the way Reliance is seeing
it, and early evidence suggests it might, the
energy landscape will never be the same again.