B Surendar

For several decades at a stretch, the US has been exploring and producing shale gas. It is only in the last 10 years, though, that it has ramped up production, thanks to the combination of horizontal drilling and hydro-fracking. A case-in point is Barnett, in Texas, which a decade ago, had a handful of wells. Today, that modest figure has swelled to over 12,000 wells. Another example is the Marcellus Basin, in the north-eastern part of the country, which is said to contain an estimated 500 trillion cubic feet of shale gas. At the risk of stating the obvious, these numbers are phenomenal.

Today, thanks to the ramp up, there is conviction in the voice when the US says it has moved that much closer to securing its energy needs for the foreseeable future. Figures vary, but it is generally agreed that while the country imported 11% of its gas needs in 2008, it imports only four per cent today.

Shale gas in the US is for real, said Aloulou Fawzi, at the recently concluded MEGAS Summit in Abu Dhabi. Fawzi works for the Washington DC-based Energy Information Administration (EIA), which is part of the US Department of Energy.

It is not just the US but also Canada, China and Australia that are shale-gas rich. The volumes of gas they contain in their boughs are widely regarded as significant in the oil and gas sectors. Further, the cost of production is comparable to that of producing conventional gas. Yes, there is concern about the potential contamination of aquifers through the exploration of the gas, but experts agree there are adequate leak-prevention measures in place to minimise the risk. With barriers, such as this, falling, it is little surprising to hear of talk that shale gas will impact demand for natural gas worldwide. That’s precisely what speaker after speaker at the MEGAS Summit conveyed to the delegates in no uncertain terms. Prices are coming down, they said. Russia and the countries of the Arabian Gulf will no longer be able to dictate higher prices for export, they added.

To put things in perspective, Qatar is the world’s largest exporter of LNG. It is LNG that contributes significantly to the country’s GDP. In that context, the extent of the impact of shale gas on the peninsula remains to be seen. It is important in the interests of the construction and HVACR sectors that Qatar formulates a formidable response to the challenge.