Impact of shale oil revolution on falling of Oil and Gas prices Technical report

The rapid development of shale gas resources in the US has transformed the world gas-market outlook. Despite this, the consensus was for a long time that shale gas would not be a ‘game changer’ in the world as it has been in the US. Shale gas is extracted from solid rock using a process called hydraulic fracturing, or ‘fracking’. Static shows, in USA, production rates decline, for the most of well on average, 80 0r 85 percent over the three years. In order to maintain current level of shale gas production, Hughes estimates that the high rates of deterioration of such wells across the US will require the drilling of 7,000 new wells a year at cost of $42 billion annually. For the maintenance of overall production of shale oil, some 6,000 new wells would need to be drilled every year, an endeavor that would cost $ 35 billion. A number of environmental concerns have been raised about fracking, including the potential for seismic events, air pollution, surface and groundwater contamination, and greenhouse gas emissions. There is no doubt that shale revolution has been a game-changer in short term, but the implication shows that it is not sustainable in long-term.