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No Formula to Duplicate U.S. Unconventional Success, Says IEA Official

Dozens of countries have launched programs to attempt to emulate the successful exploitation of shale in the United States, but it will take more than copying a formula, according to the International Energy Agency (IEA).

Australia is "leading the charge" to investigate unconventional gas resources, and China, India and Indonesia also are "seriously" investigating their countries' resource potential, the IEA noted. There is "growing interest" within Europe "from both major companies and small players, and a few countries in other regions, including Argentina, Ukraine and South Africa, also are investigating their potential.

"Production of unconventional gas in the U.S. has rocketed in the past few years, going beyond even the most optimistic forecasts," said IEA Senior Gas Analyst Anne-Sophie Corbeau. "It is no wonder that its success has sparked such international interest."

Before U.S. producers found ways to efficiently tap into unconventional resources, which include shale gas, coalbed methane and tight gas, production was limited because of costs and the complicated technology required, she noted.

"A thorough knowledge of its geographical resources and recent improvements in technology allowed the U.S. to pioneer and benefit from exploration in this area," she said. "Another factor which contributed to the United States' success was the high global gas prices from 2006 to 2008, which prompted it to closely investigate drilling more unexplored types of gas in larger volumes."

Because of impressive gas production in the United States, the IEA estimates that around 12% of global gas output is now produced from unconventional resources, and most of it now is in North America. 

To replicate the success story in North America, Corbeau said some "core factors" should be addressed regarding geology, the companies involved, expected costs and whether the marketplace needs and wants the gas.

According to Corbeau, to tap unconventional resources, stakeholders need:

Also to be assessed are factors to determine whether:

Unless involved stakeholders address all of the factors involved to successfully recover unconventional resources, chances for success diminish, said Corbeau.

"That said, despite the many uncertainties associated with production, countries are still prepared to take risks and invest time and money in exploration and production, because of the potential long-term benefits," she said.

"Based on current rates of consumption, it is estimated that recoverable conventional gas resources will last around 130 years. This length of time could be doubled with unconventional gas, so it is little wonder that the current scramble for these previously untapped resources is now firmly under way."

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