Contents
Executive Summary ............................................................................................................. 1
Introduction .......................................................................................................................... 3
Definition of unconventional gas resources ....................................................................... 4
Overview of global unconventional resources ................................................................... 5
Part 1: Unconventional gas in North America: the tale of a quiet success ..... 10
Chapter 1 - Context: resources and production .............................................................. 10
Chapter 2 - History of a revolution ................................................................................... 11
2.1 Main plays by type of resource .................................................................................. 14
2.2 Main players: the role of independents ...................................................................... 21
Chapter 3 - Analysis of success factors ............................................................................. 24
3.1 Technology and R&D ................................................................................................ 25
3.2 Profitability ................................................................................................................. 30
3.3 Federal and State policies ........................................................................................... 31
3.4 Access to land and infrastructure ............................................................................... 38
3.5 Intense competition within the service sector ............................................................ 39
Chapter 4 - Limits and challenges to the shale gas business model ............................... 41
Part 2: Unconventional gas in Europe ............................................................... 46
Chapter 5 - Setting the scene: overview of resources, exploration and production
activity and competitive landscape in Europe ................................................................. 47
5.1 An industry in its infancy ........................................................................................... 47
5.2 Overview of unconventional gas resources in Europe ............................................... 48
5.3 Players and activities .................................................................................................. 54
5.4 Implications for the development path of unconventional gas in Europe .................. 59
Chapter 6 -To what extent can Europe replicate the US unconventional gas model? . 61
6.1 Unconventional gas as a game-changer: production scenarios and operational
requirements ..................................................................................................................... 62
6.2 European challenges and the transferability of the US experience - the question of the
European response ............................................................................................................ 68
6.2.1 Technology and operating practices ....................................................................... 69
6.2.2 Land access ............................................................................................................. 72
6.2.3 Economic profitability (costs and breakeven prices) .............................................. 79
6.2.4 Energy policies and regulations .............................................................................. 89
6.2.5 Service industry - a significant bottleneck? ............................................................ 95
6.2.6 Conclusions ............................................................................................................. 96
Chapter 7 - General conclusions and macro-implications for European gas markets 99
Appendix A – Conventional and unconventional gas: what are the differences? ...... 103
A.1 The origin of natural gas ......................................................................................... 103
A.2 Introduction to unconventional gas geological properties ...................................... 104
A.3 Production profiles .................................................................................................. 106
Appendix B – Fracturing technologies ........................................................................... 108
B.1 Objectives of the technology ................................................................................... 108
B.2 The process .............................................................................................................. 108
B.3 Fracturing fluids and additives ................................................................................ 109
Appendix C – Main unconventional gas basins in Europe ........................................... 110
Bibliography ..................................................................................................................... 112
Glossary ............................................................................................................................. 116
Conversions ....................................................................................................................... 120