For all of its transformative power, the shale boom has remained a uniquely American phenomenon, despite the fact that at least three countries have more shale gas than the United States, and billions of barrels of crude remained trapped in shale formations around the world.
The formula for America’s singular success is a long one, and involves many variables: a relatively plentiful supply of water; evenly layered “wedding cake” geology that, it turns out, is particularly well-suited to horizontal well drilling; a deep pool of capital from which oil and gas explorers could draw; a robust drilling services industry along with the world’s largest network of pipelines; mineral rights for landowners, which has helped ameliorate the Not-In-My-Back-Yard (NIMBY) complaints; and finally, a market-based oil and gas industry that incentivized the sort of risk taking necessary to try and eventually perfect this novel approach to drilling.
But there’s another, less obvious secret to the U.S. shale success story: the relatively low population density of our shale-rich regions. Consider the following graph, courtesy of the EIA’s powerful (and fascinating, if you’re into this sort of thing) Energy Mapping tool that illustrates exactly where those shale formations lie:
Now let’s have a look at a map of American population density (the darker areas are more populated):
Notice anything? Most those shale formations are in sparsely populated parts of the country. For good measure, here’s what both of those maps look like together:
Mineral rights give landowners ownership over the oil and gas under their land, and therefore a financial incentive to accede to the tremendous amounts of disruption that inevitably come to their lifestyles when frackers descend on a shale play. But work-arounds to NIMBYism like this one are far more effective when there are fewer people to contend with.
It’s no coincidence that Europe, which is more densely populated, is having a much more difficult time overcoming public opposition to fracking. The Cameron government was pro-shale, but it wasn’t able to restart stalled momentum in the UK to start exploring the country’s sizable reserves of shale gas. What stymied the Brits? NIMBY concerns, a problem exacerbated by Britain’s higher population density.
Other countries will eventually start catching up to the runaway American shale bandwagon, but over the past five years we’ve seen time and again policymakers abroad run into hurdle after hurdle in their attempts to replicate the U.S. experience.