The shale rocks that are reconfiguring the North American energy landscape eventually will be unearthed around the world, albeit at a much slower pace, but the economic impacts will be gigantic, an ExxonMobil Corp. executive said Tuesday.
The potential for unconventional oil and gas development exists everywhere, which is demonstrated time and again as producers across the globe unearth new deposits, said ExxonMobil's Mark Albers, senior vice president, during the opening session of the Second Annual World Shale Conference and Exhibition in Houston. The week-long conference is being hosted by the American Gas Association, the International Gas Union and conference organizer the CWC Group.
"There is no geological law that restricts shale gas to North America," said Albers, who credited energy expert Daniel Yergin for the simple explanation of where the next big global shale discoveries will be made. "The potential for substantial stores exist in Europe, in Latin America, Asia. When we announced our merger with XTO [Energy Corp.] in 2010, one of the things that factored in our judgment was the ability to take the capability of shale gas and bring it to our international operations. Our two companies came together in June 2010 and now we are eyeing a number of international opportunities."
But "this process is likely to go a little slower than in North America, but time will tell. A resource like that is too big for the industry and for global energy and consumers to ignore."
Albers told a standing-room-only crowd that the "what's next" for shale is "a pretty interesting question because it wasn't that long ago that anybody had heard of shale gas. This year the United States will produce more natural gas than any time in history. That's profoundly very good news...because energy is a fundamental building block of modern life."
The "great story for the next few decades is how natural gas can extend its benefits to more and more people" around the world. The booming shale gas industry "comes at a time when it's needed most and from a source few people seriously considered just a decade ago. It's not so much a revolution as evolution -- and a very, very powerful one." The "shale gas boom seems like an overnight development but it was decades in the making."
ExxonMobil, the largest natural gas producer in the United States, has taken its U.S. shale gas technology, said Albers, and is pursuing shale oil developments in North America, as well as a "number of countries where we have unconventional gas potential." Last month the company said it was redirecting some of its capital spending in domestic gas plays to oily plays. Outside North America the Irving, TX-based super major is testing the shale potential in Argentina, Germany and Poland, and it's in discussions with China to evaluate its unconventional resource potential.
Global oil and gas producers are investigating the potential for unconventional plays outside North America, but the work today is mostly exploratory; development will be slower and could take a decade or two to develop, said the ExxonMobil executive. Unconventional production in North America benefits from technology, the solid pipeline infrastructure now in place, and its ready-to-deploy service industry, he noted. Roadblocks outside North America also exist in countries without sound energy policies and the rules of law in place, Albers added.
"The governments that understand how market-based policies foster growth and investment will be in the best position to take advantage of the economic opportunities presented by unconventional gas," he said.
The inaugural World Shale Conference was held a year ago in Grapevine, TX (see Shale Daily, Nov. 9, 2010; Nov. 5, 2010; Nov. 4, 2010). Jack Williams, president of ExxonMobil subsidiary XTO Energy Corp., said then that producers needed to have a consistent message for policymakers and the public. That hasn't changed, said Albers.
"To ensure the benefits of shale continue, we must exercise a firm commitment to recognize what's involved" for success in the United States and Canada. "We must continue to educate the public about hydraulic fracturing and the benefits of natural gas...Those of us in this room know we an do this safely. We know how to protect groundwater...the air. We know the processes well. We know how to extract oil and gas without hurting the environment...We've been applying these principles for a decade. It's incumbent on us to educate the public and address concerns. It's really part of our industry's license to operate."
The "potential is there" for success, he said. However, it won't be the "technology below the surface that determines whether we are successful or not...It also depends on the environment above ground...the economic climate, the political climate...The experience in the U.S. shows that the government has a critical role to play to develop unconventional resources..." When "policies are in place, our industry has proven time and time again that we can unlock new resources in an environmentally responsible manner."