Shale Energy Production Spike Revolutionising Energy Sector
From Yahoo Finance
By Julien Girault
A spike in shale oil and gas production is revolutionising the energy sector and risks weighing on prices of conventional crude, according to industry experts.
A forecast last week by the International Energy Agency (IEA) that the United States would become the world’s biggest oil producer by 2017 thanks to an explosion in hard-to-reach energy trapped in shale, or sedimentary rock, has triggered debate among companies and consumers.
“We are facing a revolution, from North America,” Christophe de Margerie, chairman and chief executive of French energy giant Total told delegates attending the recent Oil & Money industry conference in London.
De Margerie stressed that the industry’s biggest danger was no longer a drop in oil reserves, but rather technological limitations preventing exploitation of energy resources that can serve the world’s needs for “decades and decades.”
But although “the future is going to be technologically challenging” it will not be “more than it has been in the past,” said Mike Daly, a senior executive at British energy group BP.
Daly said that industry spending on exploration was at $90 billion (70 billion euros) a year compared with $20 billion just five years ago, while more than half of current spending was on unearthing unconventional hydrocarbons such as shale oil and gas.
According to the IEA, which represents major oil consuming nations, world gas demand is set to rocket by 50 percent by 2035, with half of this increase met by unconventional gas output mainly in the US, Australia and China.
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