The Wall Street Journal reports, "The North American shale-gas bonanza could be the tip of a gigantic natural-gas iceberg, according to a report commissioned by the U.S. Energy Information Administration. The report, which contains an overview of natural-gas-bearing shale-rock formations in 32 countries, estimates that these contain about 5,760 trillion cubic feet of technically recoverable gas. That is nearly seven times the amount present in the U.S, according to the report, which was released late Tuesday. The biggest overseas natural-gas shale reserves lie in China, with 1,275 Tcf. Argentina, Mexico, South Africa and Canada are also endowed with massive reserves, the report, written by consultancy Advanced Resources International Inc., said. Other countries with large amounts of gas-rich shale include Libya, Algeria, France and Poland. Each of these countries has hundreds of trillions of cubic feet of shale natural gas that can be exploited using existing technology. Independent U.S. oil companies learned to unlock the gas trapped in tight shale rock formations in the 1980s and 1990s, and the technique spread during the last decade, triggering an unexpected supply boost in North American natural gas.
“The EIA report's findings underscore how the propagation of those techniques--based on drilling horizontally in the rock formation, and cracking it with water to release the gas--could unleash a similar natural-gas supply boom around the globe. Russia, Central Asia, the Middle East, Southeast Asia and Central Africa weren't part of the study. The report also didn't take into account production costs, or above-the-ground factors such as access to resources in the countries that were studied. Major and independent U.S. oil companies such as Marathon Oil Corp. (MRO), Exxon Mobil Corp. (XOM) and Apache Corp. (APA) are already betting on the potential of overseas shale resources. So are big national oil companies like China's Cnooc Ltd. (CEO), which earlier this year struck a deal with Chesapeake Energy Corp. (CHK) to buy into U.S. shale assets; the state-run company aims to leverage the expertise acquired there toward the exploitation of China's vast shale resources."
In the mean time gas may have its last withdrawal of the season in today's weekly report! Look for a draw of 40 Bcf!
Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at email@example.com.