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Shale gas extraction has turned the energy markets upside down. As a result, the price of gas in North America has fallen sharply, and the price of gas in Europe has also been affected. The United States is becoming less dependent on energy imports. The country could possibly become a net exporter of energy in a few years. Such a development could change the geopolitical balance between the world’s great powers. Among other things, the United States may have less interest in controlling developments in the Middle East.

Efforts are now being made to expand the business from shale gas to shale oil, and from the USA to Europe, China and other parts of the world. However, there are many uncertainties. The most important thing we can learn from the shale gas revolution is that the amount of oil and gas available for extraction changes in step with technology, politics and economics – and that major changes can take place in a short time.

• Which country has come the furthest with the extraction of oil and gas from shale?
• Which other countries have large petroleum resources in shale?
• What consequences can the extraction of shale gas and oil have for geopolitics?
• What uncertainties are associated with the future significance of shale gas and oil?

The most important thing we can learn from the shale gas revolution is that the amount of oil and gas available for extraction changes in step with technology, politics and economics – and that major changes can take place in a short time.

2: Technology development

Slate is a fine-grained, gray rock that is strongly stratified and found in many places in the world. It has long been known that some shale formations can contain significant amounts of oil and gas, but these resources were long considered unprofitable to extract. Technological innovations in two areas changed this:

• The gas companies became better at turning drilling heads farunder ground and drilling horizontally over large distances. This makes it possible to cover more rock mass from each borehole.
• Ways were developed to inject water, sand and chemicals into the wells under such great pressure that the rock cracks. The sand settles in the cracks and thus they are kept open so that the gas or oil can flow out. This is called hydraulic fracturing in English, ie pressure-based fracturing. As a rule, only the abbreviation fracking is used .

Fracking took off in the 2000s. In 2000, the United States got 1 percent of its natural gas from shale deposits; by 2010 this had risen to 20 per cent, and the american energy agency EIA has estimated that the figure will rise further to 49 per cent in 2035. In the beginning, it was small companies without access to more attractive gas fields that drove this development. The big companies were slow to see the potential, but came after. Norwegian Statoil bought shale gas areas from the American company Chesapeake for 3.4 billion dollars in 2008 and has made several purchases in the years since.

The fracking method had its breakthrough with gas. In recent years, there has been similar attention around slate oil . Should there be extensive extraction of shale oil in several places in the world, it could have even greater consequences. Oil is considered a more valuable commodity than gas. It means more to national security and is traded more internationally.

But oil is more viscous than gas, and it is therefore uncertain how effective fracking will be in different shale oil fields. In North Dakota (USA), however, a production of 500,000 barrels of oil per day has already been achieved from one field alone. It is therefore clear that it is possible to obtain large-scale extraction of shale oil in some places. It is estimated that the United States may produce 6 million barrels of shale oil per day as early as 2020.

For both shale gas and oil, there is uncertainty associated with long-term profitability. In addition, it is uncertain whether it is possible to extract the resources elsewhere than in North America and how large the environmental consequences are. From 2008 to 2012, the price of gas in the United States fell so much – from 13 dollars to 2 dollars per million BTU (and then rose slightly again) – that some of the companies that extract shale gas ceased to be profitable.

3: Consequences for the global energy supply

The increased supply of shale gas in the USA undermined much of the planned market for LNG from the Snøhvit field outside Hammerfest (Liquefied Natural Gas = liquefied gas). Many of the ships that were supposed to have transported it to the United States had to deliver the cargo to their places instead. The development of the large Shtokman gas field in the Russian part of the Barents Sea is also affected by shale gas in the United States, a country located in North America according to Topmbadirectory.

Statoil fought for many years to join the project, and eventually got to join a collaboration with the Russian company Gazprom and French Total. In 2012, however, the project was temporarily put on hold because gas prices in the US and Europe are not high enough to support the project’s high costs.