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World Has 10 TIMES More Shale Oil Than Thought In 2011, Says US EIA

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Edward McAllister and Timothy Gardner, Reuters

Estimated global reserves of oil in shale rock deposits have increased ten-fold since 2011, a U.S. government report said on Monday, offering a preliminary glimpse of potential energy resources that remain untapped across the world.

 

The Energy Information Administration estimated technically recoverable shale oil reserves in 41 countries are 345 billion barrels, up from an estimate of 32 billion barrels in 2011 and adding about 11 percent to global crude reserve estimates.

Meanwhile shale gas reserves have risen to 7,299 trillion cubic feet, up from 6,622 tcf estimated in 2011, said the EIA, the independent statistics arm of the Department of Energy.

Technically recoverable reserves are an estimation of the amount of oil or gas that can be extracted with today’s technology. Russia topped the list of oil reserves, with 75 billion barrels, ahead of the United States with 48 billion, China with 32 billion and Argentina with 27 billion barrels, according to an assessment prepared for the EIA by Advanced Resources International (ARI).

The United States, with 1,161 tcf, held the highest natural gas reserves, according to ARI, ahead of China with 1,115, Argentina with 802 tcf and Algeria with 707 tcf.

Algeria’s estimate has more than tripled from the 231 tcf estimated in 2011. Oil and natural gas production has rocketed in the United States in recent years due to the emergence of horizontal drilling and hydraulic fracturing, or fracking, that have unlocked decades of supply from shale deposits dotted across the country.

But while the EIA report offers a comprehensive glimpse of global shale potential, technically recoverable reserves are not a guarantee of supply and it is unclear if deposits outside the United States, with varying geology, can be developed economically.

Even inside the United States some areas have proved to be more difficult and expensive to develop than others, halting development.

“The reserves are one thing, but the ability to scale up the production for those reserves is another thing, which is not as straightforward in many parts of the world as it has proved to be in the U.S.,” said Jan Stuart, head of energy research at Credit Suisse in New York.

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World Shale Gas Resources: An Initial Assessment of 14 Regions Outside the United States

Executive summary

This report provides an initial assessment of shale oil resources and updates a prior assessment of shale gas resources issued in April 2011. It assesses 137 shale formations in 41 countries outside the United States, expanding on the 69 shale formations within 32 countries considered in the prior report. The earlier assessment, also prepared by Advanced Resources International (ARI), was released as part of a U.S. Energy Information Administration (EIA) report titled World Shale Gas Resources: An Initial Assessment of 14 Regions Outside the United States.1

There were two reasons for pursuing an updated assessment of shale resources so soon after the prior report. First, geologic research and well drilling results not available for use in the 2011 report allow for a more informed evaluation of the shale formations covered in that report as well as other shale formations that it did not assess. Second, while the 2011 report focused exclusively on natural gas, recent developments in the United States highlight the role of shale formations and other tight plays as sources of crude oil, lease condensates, and a variety of liquids processed from wet natural gas.

As shown in Table 1, estimates in the updated report taken in conjunction with EIA’s own assessment of resources within the United States indicate technically recoverable resources of 345 billion barrels of world shale oil resources and 7,299 trillion cubic feet of world shale gas resources. The new global shale gas resource estimate is 10 percent higher than the estimate in the 2011 report.

Table 1. Comparison of the 2011 and 2013 reports
ARI report coverage2011 Report2013 Report
Number of countries3241
Number of basins4895
Number of formations69137
Technically recoverable resources, including U.S.
Shale gas (trillion cubic feet)6,6227,299
Shale / tight oil (billion barrels)32345
Note: The 2011 report did not include shale oil; however, the Annual Energy Outlook 2011 included an estimate for U.S. shale and tight oil resources and is included here for completeness. The 2013 report adds estimates for 41 countries in addition to the U.S.

Although the shale resource estimates presented in this report will likely change over time as additional information becomes available, it is evident that shale resources that were until recently not included in technically recoverable resources constitute a substantial share of overall global technically recoverable oil and natural gas resources. The shale oil resources assessed in this report, combined with EIA’s prior estimate of U.S. tight oil resources that are predominantly in shales, add approximately 11 percent to the 3,012 billion barrels of proved and unproved technically recoverable nonshale oil resources identified in recent assessments. The shale gas resources assessed in this report, combined with EIA’s prior estimate of U.S. shale gas resources, add approximately 47 percent to the 15,583 trillion cubic feet of proved and unproven nonshale technically recoverable natural gas resources. Globally, 32 percent of the total estimated natural gas resources are in shale formations, while 10 percent of estimated oil resources are in shale or tight formations.

 

Table 2. Technically recoverable shale oil and shale gas unproved resources in the context of total world resources (assessment dates shown in footnotes)
Crude oil
(billion barrels)
Wet natural gas
(trillion cubic feet)
Outside the United States
Shale oil and shale gas unproved resources2876,634
Other proved reserves 11,6176,521
Other unproved resources 21,2307,296
Total3,13420,451
Increase in total resources due to inclusion of shale oil and shale gas10%48%
Shale as a percent of total9%32%
United States
EIA shale / tight oil and shale gas proved reserves 3, 4n/a97
EIA shale / tight oil and shale gas unproved resources558567
EIA other proved reserves625220
EIA other unproved resources51391,546
Total2232,431
Increase in total resources due to inclusion of shale oil and shale gas35%38%
Shale as a percent of total26%27%
Total World
Shale / tight oil and shale gas proved reservesn/a97
Shale / tight oil and shale gas unproved resources3457,201
Other proved reserves1,6426,741
Other unproved resources1,3708,842
Total3,35722,882
Increase in total resources due to inclusion of shale oil and shale gas11%47%
Shale as a percent of total10%32%

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