INTRODUCTION

The ‘shale revolution’ started in the US less than ten years ago; first with fastrising production of unconventional gas, then with unconventional oil following in the footsteps of gas some years later. Progress is still in its infancy and knowledgeable observers point to substantial changes over coming decades. The gas revolution is projected to extend to around the world, leading to substantial economic and geopolitical impacts for energy producing and consuming nations. In an eff ort to integrate the issues, our comprehensive paper analyses the past, present and future of shale gas development.

This chapter has been organised as follows: section 2 briefly defines unconventional gas, referred to in our text as shale gas. Extraction of the gas that is the subject of this chapter is based on the use of a common technology and we describe in a few words what is involved. Section 3 contrasts the historically declining output levels of gas in the US with the recent production achievements aft er the revolution gathered pace. It also records the changes in the US extractable resource wealth aft er the shale resources became economical. In section 4 we explore the impact of the shale revolution so far on energy markets in the US and globally. Section 5 considers briefly the general economic consequences for the US from the rising gas levels.

The rest of the chapter is more speculative since it turns to the future. Section 6 is devoted to the anticipated production achievements in the US, while section 7 broadens the vista to consider what may occur and where, as the rest of the world overcomes its inhibitions and constraints and jumps on the bandwagon. It also lists the reasons for the US's lead in this field. Section 8, finally, briefly sketches the policy implications for global energy markets of a successfully maturing shale revolution and explores its geopolitical and economic connotations.

DEFINITIONS AND TECHNICAL CHARACTERISTICS

The shale revolution is the result of technological progress that has made vast dormant gas and oil resources economically exploitable. The resources focused on in our study – namely shale gas, tight gas and coalbed methane – typically lack strict definitions and they oft en overlap.