Amid fears of oil depletion, shale gas has emerged as an alternative energy source, with production surging in the United States. While shale gas offers economic benefits, it also brings with it environmental concerns that are driving the transformation of energy markets. The balance of global energy markets is set to shift dramatically, and it’s important for governments to respond.
In the 20th and 21st centuries, oil was the dominant energy source for industry and economies around the world. After World War II, coal was the main source of energy for industrial use, but since then, oil has been used globally. It was also widely used for home heating and cooking after World War II. Petroleum has become a key fuel for transportation, such as cars, aircraft, and ships, and it has also been the main raw material for the development of the petrochemical industry. For these reasons, oil has been considered an indispensable resource not only for energy but also for many industries. The demand for oil as an energy source still accounts for more than 50% of the world’s primary energy needs, including natural gas.
However, in the 21st century, there have been ongoing concerns about oil depletion. This issue has gained greater attention, especially when coupled with the concept of peak oil production. The peak of oil production refers to the point in time when oil production reaches its maximum and then gradually declines, which has further emphasized the warnings about oil depletion. Since 1973, the view of geologists that oil production has reached its limits has gained strength, as supply has not been able to keep up with demand, even though oil extraction technology has improved by leaps and bounds. In this context, the need for new energy sources became urgent.
As an alternative energy source to oil, shale gas has emerged as an energy source that can cause major changes in the global energy consumption market and economic markets. Shale gas is gas developed and produced from shale formations in rocks, and it differs from conventional natural gas in the way it is mined. While natural gas is usually produced in shale formations and travels to the surface, shale gas is trapped in rock formations and is found at deeper depths and is widely distributed in the crevices of rocks. By country, China has the most shale gas reserves, followed by the United States and Argentina. By continent, North America has the most, followed by Africa and Asia. As such, shale gas is expected to be available for more than 60 years.
Shale gas production began in earnest in the 2000s, especially in the United States, and the commercial viability of shale gas development expanded. In 2010, shale gas production in North America was 15.3 times higher than in 2000, making the United States the world’s number one producer of natural gas, surpassing Russia. This has transformed the United States from an energy importer to an exporter, and has profoundly changed the global energy market. Shale gas production in the U.S. has also spurred a manufacturing revival, which has brought manufacturing plants back to the U.S., reaping economic benefits.
The economic impact of shale gas is not limited to the United States. As shale gas is produced in large quantities, global oil price growth has slowed, giving countries that rely heavily on oil imports a breather. It is also shifting the balance of power in the energy market, making it less dependent on the pricing policies of traditional gas producers Russia and the Middle East. Shale gas is gaining traction because, despite being a fossil fuel, it has the same chemical composition as conventional gas and can be used as a heating fuel or petrochemical feedstock.
However, shale gas development is not without environmental controversy. Hydraulic fracturing, a method of shale gas extraction, involves injecting water, sand, and chemicals at high pressure into underground rock formations to fracture the rock and extract the gas. This process can cause environmental issues such as groundwater contamination, soil contamination, and microseismicity. Studies have shown that hydraulic fracturing can contaminate water quality in the surrounding area, chemicals can persist in the soil, and small earthquakes have been reported in some areas. To address these environmental concerns, shale gas development requires stricter regulations and technological improvements, and cooperation between governments and companies is critical.
Nevertheless, shale gas still has great economic benefits. Especially in the midst of the global economic crisis and energy price instability, shale gas has become an important alternative. Shale gas production in the U.S. has revitalized manufacturing and the petrochemical industry, and U.S. energy exports have increased, expanding our influence in the global energy market. In the future, countries with scarce energy resources should take note of the potential of shale gas.
In conclusion, shale gas is more than just an energy resource, it is a new variable in the global economy and politics. How the potential of shale gas is harnessed can be a game changer for energy markets and will have a major impact on international politics surrounding energy. In addition, finding solutions to environmental issues and driving sustainable development will be a major challenge going forward.
