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. The combination of two production techniques includes horizontal drilling and hydraulic fracturing that has allowed access to large volumes of shale gas, which were previously uneconomical to produce. The production of natural gas from shale formations has rejuvenated the natural gas industry in the U.S. Shale gas is trapped within the pores of this sedimentary rock. Gas is normally stored through three ways in gas shale, which include free gas, adsorbed gas, and dissolved gas. The gas stored within the rock pores and natural fractures is known as free gas and the gas that is adsorbed on organic materials and clay is known as adsorbed gas. The global shale gas market size was valued at $57.2 billion in 2020, and is projected to reach $130.3 billion by 2030, growing at a CAGR of 8.5% from 2021 to 2030.
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Moreover, the gas dissolved in the organic materials is known as dissolved gas. Gas shale is the name given to a shale gas reservoir (play). Shale gas reservoirs are spread over large areas up to 500 m. They are characterized by low production rates. Shale gas reservoirs are fine-grained and rich in organic carbon content that signifies large gas reserves. There are disparities in lithology in gas shales which point toward the fact that natural gas is stored in the reservoir in a broad array of lithology & textures such as non-fissile shale, siltstone, and fine-grained sandstone (not only shale). Often, shale laminations or beds are interbedded in siltstone- or sandstone-dominant basins.
The shale gas market trends is segmented on the basis of technology, End-user, and region. Depending on technology, the market is categorized into Vertical fracking, Horizontal fracking, and Rotary fracking. On the basis of End-user, it is classified into residential, commercial, industrial, power generation, and transportation. Region wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
The global Shale gas market growth analysis covers in-depth information about the major industry participants. The key players operating and profiled in the report include Southwestern Energy Company, EQT Corporation, Equinor ASA, Repsol SA, SINOPEC/Shs, Chesapeake Energy Corporation, Royal Dutch Shell PLC, Exxon Mobil Corporation, Chevron Corporation and PETROCHINA/Shs.
The global shale gas market forecast is analyzed and estimated in accordance with the impacts of the drivers, restraints, and opportunities. The period studied in this report is 2020–2030. The report includes the study of the market with respect to the growth prospects and restraints based on the regional analysis. The study includes Porter’s five forces analysis of the industry to determine the impact of suppliers, competitors, new entrants, substitutes, and buyers on the market growth.
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Impact Of Covid-19 On The Shale Gas Market
- US shale oil & gas demand plummeted, prices collapsed, and bankruptcies were announced at exceptional rates due to the uncertainties in crude oil & natural gas prices, Break-Even (BE) prices for fracking operations, financial & technical constraints within the industry, global hydrocarbon demand development, political & regulatory factors in the US, and environmental & societal sustainability.
- US shale industry registered net negative free cash flows of $300 billion, impaired more than $450 billion of invested capital, and saw more than 190 bankruptcies since 2010. However, there is negative impact on global shale gas market.
- The emergence of COVID-19 has coincided with a core oil market management dispute. That dispute mainly involves the market shares commanded by Saudi Arabia (the largest sovereign producer among the OPEC membership) and Russia which, along with Mexico and occasionally Norway, has cooperated with OPEC as “OPEC+”. Oil market management disputes inevitably result in lower prices, and so the global oil industry finds itself reeling from the combined effects of OPEC+ disarray and ultra-low global demand caused by the pandemic.
- The world began locking down its economies, which brought historic low oil & gas prices as demand crashed. This meant that investment in LNG production & export facilities became less attractive. With demand in freefall, U.S. producers began questioning their investment timescales for new LNG export projects. Final investment decisions have been delayed on seven U.S. LNG projects, representing around 14 billion cubic feet per day of potential capacity.
- Natural gas consumption was negatively impacted in early 2020 by an exceptionally mild winter in the northern hemisphere. This was soon followed by the imposition of partial to complete lockdown measures in response to COVID-19 and an economic downturn in almost all countries and territories worldwide. As of early June, all major gas markets have experienced a fall in demand or sluggish growth at best as is the case of the People’s Republic of China (hereafter, “China”). Europe is the hardest hit market, with a 7% year-on-year decline so far in 2020. The global oversupply is pushing major natural gas spot indices to historic lows, while the oil and gas industry is cutting its spending or postponing or canceling some investment decisions to make up for the severe shortfall in revenue.
- The decline was widespread, with record declines in both OECD (-4.8%) and non-OECD (-3.9%) countries. The US (the world’s 2nd-largest energy producer), saw a decline of 5.3%, the largest decline in the world last year, and the largest domestic decline on record. Production of all fossil fuels, nuclear power, and biofuels declined.
- The price effects of the economic slowdown following the COVID-19 pandemic contributed to reductions in U.S. petroleum and natural gas reserves in 2020. Proved reserves of crude oil and lease condensate decreased by 9 billion barrels in 2020, a decline of 19%, and proved reserves of natural gas decreased by just over 22 trillion cubic feet (TCF), a decline of 4%.
- Globally, natural gas production also saw a record decline, falling by 3.3%. Yet none of the world’s top ten producers suffered a record decline—rather, the decline of natural gas production was broadly-based, with 40 of the 50 countries named in bp’s production table seeing declining output last year. And as noted above, natural gas – unlike oil & total energy– saw global production decline more rapidly than demand, even without coordinated producer action as we saw with oil.
- Petroleum demand, which was largely inelastic—changing by one to three percent annually—slumped by more than 30 MMbbl/d in April. Lockdowns of several nations across the world caused drastic changes in the crude oil market. Oil prices decisively broke the new normal of $50–60/bbl, with West Texas Intermediate (WTI) May futures prices falling even below zero (-$37/ bbl) due to low liquidity and limited available storage. Although the sub-zero price was a temporary dislocation, this intense volatility highlights the fragile state of the industry.
- According to the Organization for Economic Co-operation and Development (OECD), a surge in the price of crude oil began during the lockdown due to extensive supply and less demand, which increased the production of electricity. However, there is no impact of COVID-19 on the Shale gas market due to extensive production of oil.
- COVID-19 impacted almost all industries by hindering various industrial operations and disrupting the supply chain. Maximum companies halted their operation due to fewer workforces. However, there is a sluggish decline in the global shale gas market share due to impact of COVID-19.
- Furthermore, import and export activities were significantly impacted, which, in turn, adversely affected the industries using shale gas and thereby affecting the global market.
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Key findings of the study
- On the basis of technology, the vertical fracking segment emerged as the global leader in 2020 and is anticipated to be the largest market during the forecast period.
- On the basis of End-user, the power generation segment emerged as the global leader in 2020 and is anticipated to be the largest market during the forecast period.
- On the basis of region, the North America registered the highest market share and is projected to maintain the same during the forecast period.
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