What will happen to the US with shale gas?
The US between 2011 and 2019 managed to almost completely eliminate their energy dependence, but the lockdown has challenged the entire sector, including shale gas. Cer report
Independence in energy supply is one of the key points in the conflict between the United States and China. But the post- lockdown international scenario could change the dynamics, exacerbate geopolitical tensions and revolutionize the current landscape.
WHAT HAPPENED FIRST
The USA between 2011 and 2019 managed to almost completely eliminate their energy dependence. Even if they still import a small share of raw materials equal to 6,500,000 b / d. Energy independence was achieved thanks to the production technique of fracking (this is the sum of tight oil + shale gas). "The latter, heavily used since the Obama era, has transformed the country into the main oil and natural gas producer in the world", recalls the “Geopolitics of energy” dossier of the European Research Center (CER).
THE NUMBERS
From 1971 to 2008, American oil production constantly decreased and then exploded from the minimum of 3,932,000 b / d in September 2008 to a maximum of 13,100,000 b / d in March 2020, and then decreased again to the current 11,000,000 b / d. g.
THE CURRENT SITUATION
The panorama outlined so far is destined to change due to the collapse in the price of a barrel that puts the entire American energy sector in crisis. Consequently also the extraction of natural gas which is a "by-product" of oil. It means that the first is obtainable thanks to the extraction of the oil itself which allows both technically and financially to support the production of natural gas. According to Rystad Energy24, «before the outbreak of the pandemic, global natural gas production was estimated to grow from 4,069 Gm3 in 2019 to 4,233 Gm3 in 2020. Currently, global output in the current year is instead expected to decline, for a total of 3,962 Gm3. "
THE BREAKDOWN
Historically low natural gas prices in Europe as well as Asia along with lower demand caused U.S. LNG exports to drop from 7.11 Gm3 in January 2020 to just 2.8 Gm3 in June, according to US Energy Information Administration data. 2020.
THE QUESTIONS OF THE ANALYSTS
It is a situation that worries America together with the disappearance of the Covid-19 epidemic which seems to continue. Matt Gallagher, chief executive of Parsley Energy, told the Financial Times that the US has already crossed peak oil. On the other hand, an editorial by Olparmi reports the doubts of analysts who worry «if the American shale will be able to find its new normal. For the United States, shale as such is not the most serious concern, but the loss of the resulting geopolitical leverage, which has nothing to do with OPEC ”.
THE FUTURE
What will happen to the US with shale in the coming months is still very uncertain. Trump-led America could see an increase in its energy dependence and consequently lose power on the international stage in favor of Beijing. What is certain is that recent bankruptcies of shale companies such as Chesapeake Energy could be a wake-up call. This is the company that symbolizes the shale revolution in America, which not even twenty days ago had to take the books to court due to large debts of 9.6 billion dollars.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/che-cosa-succedera-agli-usa-con-lo-shale-gas/ on Sat, 15 Aug 2020 05:33:22 +0000.