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Singular Shale
It’s Hard Playing Catch-Up to US Shale

In less than a decade the U.S. has ditched concerns over increasing oil imports in favor of debates over whether or not to lift the crude export ban. Fracking has set off an energy revolution here in America, and the rest of the world is keen to get in on the action. But, as the EIA reports, only three other countries are managing to commercially produce hydrocarbons from shale:

In Canada, tight oil production doubled between 2011 and 2014, from 0.2 million bbl/d to 0.4 million bbl/d. Most Canadian tight oil production comes from Alberta and Saskatchewan. The same is true of Canadian shale gas production, which increased from 1.9 Bcf/d in 2011 to 3.9 Bcf/d as of May 2014, when including production from the Montney formation…

In China, Sinopec and PetroChina have reported commercial production of shale gas from fields in the Sichuan Basin. Their combined shale gas output has reached 0.163 Bcf/d, or 1.5% of total natural gas production.

In Argentina, tight oil production comes mainly from Vaca Muerta’s Neuquen Basin. National oil company YPF, partnering with Chevron, is producing about 20,000 barrels of tight oil per day from the Loma Campana area.

The kinds of shale production numbers Canada, China, and Argentina are reporting pale in comparison to the mighty American renaissance. The difficulty other countries are having in replicating the U.S. experience pays tribute to the remarkably long list of favorable conditions that allowed the shale boom to ignite here in the first place.

From favorable mineral rights to large pools of capital, from an already robust pipeline infrastructure to evenly layered geology, the U.S. seemingly had all of the parts of the shale equation already in place. And as other countries with large shale deposits lag behind in getting their own production up and running, the more providential—and singular—the American shale boom looks.

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  • LarryD

    I will point out that the basic principals of fracking go back a long time, the current boom is because the technology has improved a lot.

    And, of course, the American oil industry has had the right resources and conditions to really exploit the improved technology.

  • JR

    In short, AMERICA, FUCK YEAH BITCHES!!!! Boo-yah!!!!

    • FriendlyGoat

      That being “in short”, is too short for sense.

  • Fat_Man

    I am sure that Canadian Geology is very much the same as the adjacent US geology, by the grace of God.

    • gabrielsyme

      Well, I think we’d need a geologist to tell us whether or not that is actually the case. My impression is that Canada is actually doing quite well in using fracking technology. The US has a head start, but the main reason for the differential in “tight” oil production is that Canada produces a much higher proportion of its oil from offshore and oil sands sources, which aren’t suitable for fracking at all (though an increasing amount of oil sands production does use similar technologies, which have advanced hugely over the last few years). In terms of shale gas, Canada is a little further behind, but is in pretty rapid development. Overall, Canada has nothing to be ashamed of in terms of the adaptability, technical ability and ingenuity of its oil industry.

      • Fat_Man

        I am not a geologist, but I do know that the distance from North Dakota to Saskatchewan is appropriately 0.00 miles. Just saying.

        • gabrielsyme

          The Bakken Shale does indeed straddle the border, and the Canadian side is being exploited. However, Canada’s part of the Bakken isn’t a very large share of its oil & gas reserves, so the clearly similar geology only applies to a small fraction of Canada’s production.

  • Alex K.

    From my readings on tight oil and gas, including Nyssa Darbonne’s The American Shales most lately (I have blogged about it), US success was based on these prerequisites:

    – a pool of entrepreneurial explorers with access to risk-loving capital;
    – ease of securing mineral rights;
    – a dynamic, well-developed service industry.

    For all I know, China’s oil & gas is dominated by state-controlled giants and an independent, privately owned service industry is just beginning to emerge. Transferring US know-how in shale or tight oil more generally is not nearly as straightforward as, say, in mobile telecoms. State-owned companies are too inflexible to invest the sort of human effort that went into US shales.

    • Frank Natoli

      In the U.S., you left out one essential criterion: the exclusion of almost one trillion barrels of conventionally and economically extractable oil in Alaska ANWR, Pacific, Gulf and Atlantic coasts by one political party whose environmental wing is a core constituency. Were the U.S. to open the aforementioned areas, unconventionally extractable oil would become prohibitively expensive.

      • Alex K.

        To some degree, I would probably agree with you but I am far from sure that unconventional onshore oil would become prohibitively expensive if those offshore areas were opened for drilling. Shale technologies may have never been developed if coastal shelf had been available for drilling, but the recent advances in onshore well construction have likely made onshore shale oil competitive with all but the most shallow offshore projects.

  • Jacksonian_Libertarian

    I disagree with the idea that the American shale boom is built on anything but the American free market. The excuse that American shale is somehow better or easier to develop than shale in other countries is just that, an excuse. The fact is that American shale developers have gone through a long learning period where production per well was low, and have been steadily improving their performance until they have begun to rock the world markets.

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