A review of regional and global estimates of unconventional gas resources

This Research Report assesses the currently available evidence on the size of unconventional gas resources at the regional and global level. Focusing in particular on shale gas, it provides a comprehensive summary and comparison of the estimates that have been produced to date. It also examines the methods by which these resource estimates have been produced the strengths and weaknesses of those methods, the range of uncertainty in the results and the factors that are relevant to their interpretation

Comment on the ‘Uppsala critique’

AbstractThis paper discusses the criticisms of the IEA World Energy Outlook raised by Aleklett et al. (2010), often referred to as the ‘Uppsala critique’. The major argument of Aleklett et al. is that the rates of depletion, the ratio of annual production to remaining resources or reserves, assumed by the IEA in certain categories of fields are unreasonable. In this paper, we call into question the reductions in future global oil production that Aleklett et al. argue are necessary: they have incorrectly applied a depletion rate for all fields within a region to different subsets of fields within a region. The more minor reductions to future global oil production that Aleklett et al. argue are needed because of the IEA modelling of the production of bitumen and natural gas liquids are also examined briefly

A bridge to a low carbon future? Modelling the long-term global potential of natural gas

This project uses the global TIMES Integrated Assessment Model in UCL (‘TIAM-UCL’) to provide robust quantitative insights into the future of natural gas in the energy system and in particular whether or not gas has the potential to act as a ‘bridge’ to a low-carbon future on both a global and regional basis out to 2050. This report first explores the dynamics of a scenario that disregards any need to cut greenhouse gas (GHG) emissions. Such a scenario results in a large uptake in the production and consumption of all fossil fuels, with coal in particular dominating the electricity system. It is unconventional sources of gas production that account for much of the rise in natural gas production; with shale gas exceeding 1 Tcm after 2040. Gas consumption grows in all sectors apart from the electricity sector, and eventually becomes cost effective both as a marine fuel (as liquefied natural gas) and in medium goods vehicles (as compressed natural gas). It next examines how different gas market structures affect natural gas production, consumption, and trade patterns. For the two different scenarios constructed, one continued current regionalised gas markets, which are characterised by very different prices in different regions with these prices often based on oil indexation, while the other allowed a global gas price to form based on gas supply-demand fundamentals. It finds only a small change in overall global gas production levels between these but a major difference in levels of gas trade and so conclude that if gas exporters choose to defend oil indexation in the short-term, they may end up destroying their export markets in longer term. A move towards pricing gas internationally, based on supply-demand dynamics, is thus shown to be crucial if the if they are to maintain their current levels of exports. Nevertheless, it is also shown that, regardless of how gas is priced in the future, scenarios leading to a 2oC temperature rise generally have larger pipeline and LNG exports than scenarios that lead to a higher temperature increase. For pipeline trade, the adoption of any ambitious emissions reduction agreement results in little loss of markets and could (if carbon capture and storage is available) actually lead to a much greater level of exports. For LNG trade, because of the significant role that gas can play in replacing future coal demand in the emerging economies in Asia, markets that are largely supplied by LNG at present, we demonstrate that export countries should actively pursue an ambitious global agreement on GHG emissions mitigation if they want to expand their exports. These results thus have important implications for the negotiating positions of gas-exporting countries in the ongoing discussions on agreeing an ambitious global agreement on emissions reduction

The future role of natural gas in the UK: a bridge to nowhere?

The UK has ambitious, statutory long-term climate targets that will require deep decarbonisation of its energy system. One key question facing policymakers is the role of natural gas both during the transition towards, and in the achievement of, a future low-carbon energy system. Here we assess a range of possible futures for the UK, and find that gas is unlikely to act as a cost-effective ‘bridge’ to a decarbonised UK energy system. There is also limited scope for gas in power generation after 2030 if the UK is to meet its emission reduction targets, in the absence of carbon capture and storage (CCS). Without CCS, a ‘second dash for gas’ while providing short-term gains in reducing emissions, is unlikely to be the most cost-effective way to reduce emissions, and could result in stranded assets and compromise the UK's decarbonisation ambitions. In such a case, gas use in 2050 is estimated at only 10% of its 2010 level. However, with significant CCS deployment by 2050, natural gas could remain at 50–60% of the 2010 level, primarily in the industrial (including hydrogen production) and power generation sectors

Unconventional gas: potential energy market impacts in the European Union

In the interest of effective policymaking, this report seeks to clarify certain controversies and identify key gaps in the evidence-base relating to unconventional gas. The scope of this report is restricted to the economic impact of unconventional gas on energy markets. As such, it principally addresses such issues as the energy mix, energy prices, supplies, consumption, and trade flows. Whilst this study touches on coal bed methane and tight gas, its predominant focus is on shale gas, which the evidence at this time suggests will be the form of unconventional gas with the most growth potential in the short- to medium-term. This report considers the prospects for the indigenous production of shale gas within the EU-27 Member States. It evaluates the available evidence on resource size, extractive technology, resource access and market access. This report also considers the implications for the EU of large-scale unconventional gas production in other parts of the world. This acknowledges the fact that many changes in the dynamics of energy supply can only be understood in the broader global context. It also acknowledges that the EU is a major importer of energy, and that it is therefore heavily affected by developments in global energy markets that are largely out of its control.JRC.F.3-Energy securit

Methods of estimating shale gas resources - Comparison, evaluation and implications

Estimates of technically recoverable shale gas resources remain highly uncertain, even in regions with a relatively long history of shale gas production. This paper examines the reasons for these uncertainties, focusing in particular on the methods used to derive resource estimates. Such estimates can be based upon the extrapolation of previous production experience in developed areas, or from the geological appraisal of undeveloped areas. The paper assesses the strengths and weaknesses of these methods, the level of uncertainty in the results and the implications of this for current policy debates. We conclude that there are substantial difficulties in assessing the recoverable volumes of shale gas and that current resource estimates should be treated with considerable caution. Most existing studies lack transparency or a rigorous approach to assessing uncertainty and provide estimates that are highly sensitive to key variables that are poorly defined - such as the assumed ratio of gas-in-place to recovered gas (the ‘recovery factor’) and the assumed ultimate recovery from individual wells. To illustrate the uncertainties both within and between different methodological approaches, we provide case studies of resource estimates for the Marcellus shale in the US and three basins in India

Unconventional gas - a review of regional and global resource estimates

It is increasingly claimed that the world is entering a ‘golden age of gas’, with the exploitation of unconventional resources expected to transform gas markets around the world. But the future development of these resources is subject to multiple uncertainties, particularly with regard to the size and recoverability of the physical resource. This paper assesses the currently available evidence on the size of unconventional gas resources at both the regional and global level. Focusing in particular on shale gas, it first explores the meaning and appropriate interpretation of the various terms and definitions used in resource estimation and then summarises and compares the different regional and global estimates that have been produced to date. It shows how these estimates have increased over time and highlights their variability, the wide range of uncertainty and the inadequate treatment of this uncertainty by most studies. The paper also addresses coal bed methane and tight gas and identifies those estimates that appear to be most robust for each region. The paper concludes that unconventional gas could represent 40% of the remaining technically recoverable resource of natural gas, but the level of uncertainty is extremely high and the economically recoverable resource could be substantially smaller