What is shale gas and why is it important?

Last Updated: December 5, 2012

Shale gas refers to natural gas that is trapped within shale formations. Shales are fine-grained sedimentary rocks that can be rich sources of petroleum and natural gas. Over the past decade, the combination of horizontal drilling and hydraulic fracturing has allowed access to large volumes of shale gas that were previously uneconomical to produce. The production of natural gas from shale formations has rejuvenated the natural gas industry in the United States.

Does the U.S. Have Abundant Shale Gas Resources?

Of the natural gas consumed in the United States in 2011, about 95% was produced domestically; thus, the supply of natural gas is not as dependent on foreign producers as is the supply of crude oil, and the delivery system is less subject to interruption. The availability of large quantities of shale gas should enable the United States to consume a predominantly domestic supply of gas for many years and produce more natural gas than it consumes.

The U.S. Energy Information Administration's Annual Energy Outlook 2013 Early Release projects U.S. natural gas production to increase from 23.0 trillion cubic feet in 2011 to 33.1 trillion cubic feet in 2040, a 44% increase. Almost all of this increase in domestic natural gas production is due to projected growth in shale gas production, which grows from 7.8 trillion cubic feet in 2011 to 16.7 trillion cubic feet in 2040.

Although the prospects for shale gas production are promising, there remains considerable uncertainty regarding the size and economics of this resource. Many shale formations, particularly the Marcellus (see map below), are so large that only a limited portion of the entire formation has been extensively production-tested. Most of the shale gas wells have been drilled in the last few years, so there is considerable uncertainty regarding their long-term productivity. Another uncertainty is the future development of well drilling and completion technology that could substantially increase well productivity and reduce production costs.

An analysis in the Annual Energy Outlook 2012 (released June 2012) indicates that the uncertainty in the size and economics of the domestic shale gas resources could have a considerable impact on future domestic natural gas production and that 2035 shale gas production could be between 9.7 trillion cubic feet and 20.5 trillion cubic feet. U.S. total natural gas production is projected to range between 26.1 trillion cubic feet and 34.1 trillion cubic feet. The resource uncertainty cases will be updated and included when the full Annual Energy Outlook 2013 is released in the spring of 2013.

Where is Shale Gas Found?

Shale gas is found in shale "plays," which are shale formations containing significant accumulations of natural gas and which share similar geologic and geographic properties. A decade of production has come from the Barnett Shale play in Texas. Experience and information gained from developing the Barnett Shale have improved the efficiency of shale gas development around the country. Another important play is the Marcellus Shale in the eastern United States. Geophysicists and geologists identify suitable well locations in areas with potential for economical gas production by using surface and subsurface geology techniques and seismic techniques to generated maps of the subsurface. See animated maps of production growth in the Barnett Shale and Marcellus Shale plays in Today in Energy articles — July 12, 2011 and May 23, 2012.

Hydraulic fracturing (commonly called "fracking" or "fracing") is a technique in which water, chemicals, and sand are pumped into the well to unlock the hydrocarbons trapped in shale formations by opening cracks (fractures) in the rock and allowing natural gas to flow from the shale into the well. When used in conjunction with horizontal drilling, hydraulic fracturing enables gas producers to extract shale gas economically. Without these techniques, natural gas does not flow to the well rapidly, and commercial quantities cannot be produced from shale.

How is Shale Gas Production Different from Conventional Gas Production?

Conventional gas reservoirs are created when natural gas migrates from an organic-rich source formation into permeable reservoir rock, where it is trapped by an overlying layer of impermeable rock. In contrast, shale gas resources form within the organic-rich shale source rock. The low permeability of the shale greatly inhibits the gas from migrating to more permeable reservoir rocks.

What Are the Environmental Issues Associated with Shale Gas?

Natural gas is cleaner-burning than coal or oil. The combustion of natural gas emits significantly lower levels of carbon dioxide (CO2) and sulfur dioxide than does the combustion of coal or oil. When used in efficient combined-cycle power plants, natural gas combustion can emit less than half as much CO2 as coal combustion, per unit of electricity output.

However, there are some potential environmental concerns associated with the production of shale gas. The fracturing of wells requires large amounts of water. In some areas of the country, significant use of water for shale gas production may affect the availability of water for other uses and can affect aquatic habitats.

Second, if mismanaged, hydraulic fracturing fluid — which may contain potentially hazardous chemicals — can be released by spills, leaks, faulty well construction, or other exposure pathways. Any such releases can contaminate surrounding areas.

Third, fracturing also produces large amounts of wastewater, which may contain dissolved chemicals and other contaminants that could require treatment before disposal or reuse. Because of the quantities of water used and the complexities inherent in treating some of the wastewater components, treatment and disposal is an important and challenging issue.

Finally, according to the United States Geological Survey, hydraulic fracturing "causes small earthquakes, but they are almost always too small to be a safety concern. In addition to natural gas, fracking fluids and formation waters are returned to the surface. These wastewaters are frequently disposed of by injection into deep wells. The injection of wastewater into the subsurface can cause earthquakes that are large enough to be felt and may cause damage." The injection wells typically discharge the wastewater into non-potable salt-water aquifers.

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