The increasing need for energy and diminishing conventional gas reserves, the demand for unconventional sources such as CBM, shale gas, gas hydrates and tight gas has experienced a significant leap in the past decade. ShaleGas is the form of natural gas derived from underground shale deposits through hydraulic fracturing and horizontal drilling.
Shale
gas is one of the popular conventional energy sources as it emits less carbon
compared to other fossil fuels such as coal and hence is expected to become the
major fuel replacing coal and other fossil fuels provided its production
increases in the near future.
Regarding
end-users, shale gas market is segmented into industrial, commercial, power
generation, transportation, and residential. Owing to its low price compared to
other fossil fuels, the market is anticipated to replace conventional sources
such as coal, nuclear and hydro especially in chemical, fertilizer and hydrogel
production industries.
Global
conventional energy reserves are not able to fulfill the demand owing to
developing per capita consumption of energy in developing countries majorly in
Asia-Pacific. Till now, shale gas production is limited to North America such
as Canada and U.S. In Asia Pacific region production started in 2015 as large
shale gas reserves have been discovered. Foreign investors also have recently
ventured the market along with entering into various mergers and acquisitions
with companies to utilize the potential in this region.
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The
key factors driving the market are anticipated to be the abundance of shale gas
globally however yet not matured reserves in several locations such as India
and Indonesia, improved supply and distribution network, enhanced drilling technology
and decline in prices of conventional energy sources.
However,
the involvement of higher capital investment for shale gas exploration and
production, and other issues such as water contamination on hydraulic
fracturing are expected to restrain the industry growth over the forecast
period. Also, other environmental issues such as methane release owing to
hydraulic drilling and public opposition have hindered the market mostly in the
European countries such as Poland and France.
Also,
various energy and government agencies globally have initiated many programs
for developing and producing shale gas. Some of these agencies are Energy
Information Administration (EIA) U.S., Gas Shale in Europe (GASH), German
Research Centre for Geosciences (GFZ). Recently, countries such as China,
Poland, Jordan and India have participated in the initiative program.
Application Insights:
Industrial,
residential, commercial, transportation and power generation are the key
application sectors. In 2013, power generation was the major application
segment accounted for more than 30% of total volume of shale gas produced. The
main factors driving product demand in this segment is the abundance and low
carbon footprint of shale gas over coal and crude oil.
Environmental
concerns and regulatory support for the use of conventional sources of energy
is yet another factor to drive shale gas demand in this power generation
industry. Industries in Canada and U.S. are slowly shifting their focus towards
the utilization of shale gas replacing the conventional gases. Growing demand
against LPG and CNG as the alternative transportation fuel is another important
reason responsible for its increase in consumption in the past few years and
this trend is expected to continue over the forecast period. This will develop
transportation to be the fastest growing application with a projected at a CAGR
of 10.8% from 2014 to 2020.
The
commercial application of the market is also expected to grow at CAGR of around
5.3% from 2014 to 2020 to reach approximately USD 10 billion by 2020.
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Regional Insights:
In
the present industry scenario, Canada and U.S. are the major producers of shale
gas. These two countries produced almost 92% of the total volume in 2013.
Earlier to shale gas, U.S. was the largest importer of natural gas. Later on,
owing to rapid production and exploration activities, U.S. emerged as the major
exporter for the market followed by Canada estimated over 8.2% of the gas
extracted in 2013.
China
accounted 30 million cbf output by 2012 and increased its production to 200
million cbf till 2013. As per estimates, China has a huge amount of shale gas
reservoirs and discovers great market potential. The Chinese government is also
supporting tax leverage and financial benefits to the shale gas companies.
APAC
is anticipated to be the emerging market with a CAGR of over 66% from 2015 to
2020. Europe in more than 14 countries including Germany, Poland and France is
also is also anticipated to increase production of shale gas over the forecast
period owing to the abundant availability of reserves which are in the initial
maturity stage.
Competitive Insights:
Global
shale market is being dominated by top gas & oil producing multinationals
spread through the value chain creating the market highly competitive. Key
market players have already entered into various acquisitions, collaborations,
joint ventures and partnerships to sustain the competitive market.
Some
of the market leaders are Anadarko Petroleum Corporation, BHP Billiton, Exxon
Mobil Corporation, Royal Dutch Shell, Reliance Industries Limited, Cabot Oil
& Gas, SM Energy, and Talisman Energy Inc. among some other companies.
Market Segment:
Global
Shale Gas Application Outlook (Volume, Bcf; Revenue, USD billion)
• Industrial
• Power Generation
• Residential
• Commercial
• Transportation
Shale
Gas Regional Outlook
• North America
• U.S.
• Canada
• Asia Pacific
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