U. S. Shale Gas and Global Energy Dr. James L U.S. Shale Gas and Global Energy Dr. James L. Smith, Southern Methodist University September 23, 2010 Hong Kong Baptist University Workshop on Electricity Reliability, Environment, and Cost June 10, 2014
Today’s Presentation: What is shale gas? How is it affecting the US energy scene? How will it affect global energy markets? What are the benefits for Asian consumers and industry?
U.S. Gas Production (tcf)
Shale Beds are the Original Source of Gas
Fracking and Horizontal Drilling are the Keys
Chesapeake Energy Gas Rig -- Pennsylvania
Click to Play Video
Shale Basins are Widespread
Global Shale Basins Source: U.S. Energy Information Administration
Technically Recoverable Shale Gas Resources Total = 7,299 TCF Source: U.S. EIA, June 10, 2013
The Contribution of Horizontal Wells Source: U.S. Energy Information Administration
U.S. Shale Plays Also Attract Foreign Investors Source: U.S. Energy Information Administration
KNOC Upstream Oil & Gas Projects Source: U.S. Energy Information Administration
Dramatic Rise of U.S. Shale Gas Production
Potential Future Impact on U.S. Gas Price
Shale Gas Impact on U.S. Price Source: K. Medlock, “U.S. LNG Exports: Truth and Consequence”
U.S. Coal Consumption for Electricity Source: U.S. Energy Information Administration, Deutsche Bank
U.S. Coal Exports (net) 1,000 short tons Source: U.S. Energy Information Administration
Shale Gas Pushes Coal into Export Channel … and depresses the price. Source: U.S. Energy Information Admin., U.S. Bureau of Labor Statistics
Europe & Asia Receive More U.S. Coal Source: U.S. Bureau of Labor Statistics
Potential Impact on GHG Emissions
Gas Consumption Represents a GHG Tradeoff As gas-based emissions rise, emissions from other fuels fall by more. Source: U.S. Energy Information Administration
How to Replace Nuclear: Coal or Gas?
Global LNG Market Imbalance Source: K. Medlock, “U.S. LNG Exports: Truth and Consequence”
Profitability of U.S. LNG Exports Source: K. Medlock, “U.S. LNG Exports: Truth and Consequence”
Shale Gas: Focus on China
China Primary Energy Consumption
China: Power Generation
China: LNG Imports are Diversified
The New Russian-Chinese Pipeline Gas Deal 38 billion cubic meters/year @ $10/mmbtu ≈ 25% of Russian gas exports to Europe ≈ 10-15% of total Chinese gas supply by 2020
China’s Shale Gas Upside Potential Source: U.S. Energy Information Administration
China’s Primary Shale Gas Basins Source: U.S. Energy Information Administration
China Electric Power: Coal vs. Everything Else
Concluding Thoughts Expanding supplies of US shale gas are pushing energy prices down, in the US and abroad. Global arbitrage will tend to reduce (but not eliminate) the wedge between U.S. and Asian gas prices. Shale gas is pushing coal out of U.S. power generation and into the export stream—resulting in lower coal prices but increased carbon emissions in Europe. The U.S. shale gas revolution represents only the tip of the iceberg, with impacts likely to grow as the global abundance of shale resources is recognized and exploited. All energy consumers (especially import-dependent consumers like Japan, Taiwan, and Korea) will benefit from the abundance of gas. Producers of competing fuels (coal and oil) will not.
Thank You! jsmith@smu.edu