There are many imitators out there, but only one region currently enjoying a genuine shale boom: North America. China, Australia, Poland, Lithuania, and Ukraine, amongst others, have all tried to emulate the North American shale bonanza. But as the Energy Information Administration (EIA) reminds us, the US and Canada remain the world’s only producers of significant quantities of shale gas. The EIA reports:
The United States and Canada are the only major producers of commercially viable natural gas from shale formations in the world, even though about a dozen other countries have conducted exploratory test wells, according to a joint U.S. Energy Information Administration (EIA)/Advanced Resources International (ARI) study released in June. China is the only nation outside of North America that has registered commercially viable production of shale gas, although the volumes contribute less than 1% of the total natural gas production in that country. In comparison, shale gas as a share of total natural gas production in 2012 was 39% in the United States and 15% in Canada.
This is partly due to the head-start North America is enjoying—the benefit of being a first mover in this new field of energy extraction. But that doesn’t explain why the rest of the world is finding it so difficult to ramp up any kind of commercial production. The fuller explanation is that this shale revolution has been, for a variety of reasons, a uniquely American success story.
North America’s geology was particularly well-suited for horizontal drilling, and much of it had already been mapped out, making it easier to know where to drill. The US already had a pool of investors willing to take risks, to wildcat in new oil and gas plays with new technologies. We also already had the world’s largest network of pipelines to help bring new oil and gas to market, as well as the subsurface mineral rights to give locals an incentive to permit drilling. And finally, unlike China, North America has enough water to use in the fracking process.
Mexico is slowly liberalizing its oil sector. If our southern neighbor opens its doors to the foreign companies with the expertise necessary to extract its prodigious shale oil and gas reserves, the whole of North America will be walking tall in a brand new energy landscape.