Ten percent of the world’s recoverable crude-oil reserves and nearly one-third of natural-gas reserves may be held in shale formations in the U.S. and in dozens of other countries where exploitation of resources trapped in the rock is in the early stages, according to a U.S. government report released Monday.
The estimate by the Energy Information Administration said these shale-oil and shale-gas resources in the U.S. and in 137 shale formations in 41 other countries are considered “technically recoverable resources,” or those that can be produced using current technology without reference to economic profitability.
More than half of the identified shale-oil resources outside the U.S. are concentrated in four countries–Russia, China, Argentina and Libya–while more than half of the non-U.S. shale-gas resources are concentrated in five countries–China, Argentina, Algeria, Canada and Mexico. The U.S. would be ranked second after Russia for shale-oil resources and fourth after Algeria for shale-gas resources if compared with the 41 countries assessed, the EIA said.
The report estimates that shale resources taken in conjunction with the EIA’s own assessment of resources within the U.S. indicate technically recoverable volume 345 billion barrels of oil and 7,299 trillion cubic feet of gas.
The EIA said the actual figure could be higher, as the report doesn’t assess many prospective shale formations, such as those lying under the large oil fields in the Middle East and the Caspian region. But it stressed that resource estimates are “highly uncertain” until more data become available from production wells.
Currently, only the U.S. and Canada are producing shale oil and shale gas in commercial quantities.
In the U.S., use of hydraulic-fracturing and horizontal-drilling techniques has unlocked vast oil and gas deposits trapped in shale formations. Oil output, led by flows from North Dakota shale plays, has climbed by one million barrels a day from a year earlier, reducing the need for imported oil. U.S. crude-oil output exceeded imports for the first time since 1997 last week, EIA data show.
“As shale-oil and shale-gas production has grown in the United States to become 30% of oil and 40% of natural gas total production, interest in the oil and natural-gas resource potential of shale formations outside the United States has grown,” said EIA Administrator Adam Sieminski. “Today’s report indicates a significant potential for international shale oil and shale gas, though the extent to which technically recoverable shale resources will prove to be economically recoverable is not yet clear.”
Shale-oil and shale-gas resource estimates are highly uncertain and will remain so until the shale basins are extensively tested with production wells. The report’s methodology for estimating the shale resources outside the U.S. is based on the geology and resource-recovery rates of similar shale formations in the U.S. that have produced shale oil and shale gas from thousands of producing wells.