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Considering Challenges of International Shale Gas Resources

By Ideas Lab Staff August 9, 2012

The development of international shale gas resources includes several challenges, reports the Center for Strategic and International Studies.

Worldwide assessments of unconventional shale gas resources suggest reasons for optimism, but those assessments also warrant caution about pace and timing, according to a commentary by Frank Verrastro, senior vice president and director of the Energy and National Security Program at the Center for Strategic and International Studies.

First, while screening for shale resources is proceeding at a variety of locations around the world, hard data on resource potential is still based on relatively few wells and little information when compared to activity in the United States, the report claims. Verrastro also writes that what determines the attractiveness of a drill ready prospect for potential investors and developers involves considerations beyond resource potential, including these factors:

  • Proximity to and economic attractiveness of prospective markets
  • Well costs
  • Absence or presence of supporting infrastructure and competitively priced materials
  • Governance issues, such as the ownership of subsurface mineral rights
  • Cost and availability other critical resources, including water and skilled labor
  • Security and living conditions for personnel

The report argues that the United States is years ahead of other nations in its maturity of the business model for unconventional shale gas resources. The potential for development outside of the United States is there, Verrastro writes, but near-term investments are likely to be highly selective.