US Shale Gas and Tight Oil Boom - The Opportunities and Risks for America

Abstract

Abstract Shale gas and tight oil from unconventional deposits is now a very attractive target in the UnitedStates. Thanks to the technological revolution brought about by the combined use of horizontal drilling and hydraulic fracturing the US is now exploiting shale gas and tight oil formations in record numbers. The success of these exploitations were indicated in the most recent report released by the International Energy Agency (IEA) announcing the United States will overtake Russia as the biggest gas producer by 2015 and will become the largest oil producer by 2017. The Energy Information Administration (EIA) estimates that the US has more than 750 trillion cubicfeet of technically recoverable shale gas, and estimates that there could be in excess of 24 billion barrels of on-shore technically recoverable tight oil resources. Already the Barnett Shale play in Texas produces 6 percent of all natural gas produced in the United States, and Leonardo Maugeri predicts the natural endowment of the initial Bakken/Three Forks American shale play could become a big Persian Gulf producing country within the United States on its own. The risks concerning shale plays are the effects of hydraulic fracturing on the environment, whichisperceived as contributing to both land and water contamination among other health and community impacts. The pros and cons of this aspect will be scrutinized in this paper. The analysis in this paper will examine the prospects of the major shale plays in the US and the technology being used to enhance the potential opportunities this boom has for American jobs and the economy. This paper will also review a series of federal laws governing most environmental aspects of shale gas and tight oil development, and the full range of environmental and health risks this potentialshale revolution may hold for the United States.