An Overview of Shale Gas


What is Shale Gas?

Shale gas is natural gas that is trapped within the tiny spaces of shale formations. Shale is fine-grained rocks formed from mud, silt, clay and organic matter. It is a hard, low permeable mudrock and can be a rich source of petroleum and natural gas. However, the oil and gas trapped in shale are very difficult to extract because either it is trapped in small pores or is absorbed onto clay mineral particles that form the shale.  

With advancements in technology and the use of a combination of various extraction techniques, large volumes of shale gas have been extracted over the last decade. Extraction techniques such as horizontal drilling and hydraulic fracturing have allowed access to large amounts of shale which were previously uneconomical to produce. The extraction of this gas gives hope to the world where the energy demand is increasing exponentially. It is expected that the reserves of shale gas are enough to sustain the global economy for centuries. 

Shale Gas vs. Natural Gas  

Shale gas is a type of natural gas. It is a mixture of various hydrocarbon gases and consists mainly of methane. However, there is a difference in how the gas is distributed under the surface of the Earth. There is also a difference in how it is extracted from the Earth.

Natural gas reserves are formed when the gas travels towards the Earth’s surface. The gas originates from an organic-rich source into a permeable reservoir rock. This reserve of gas is trapped by another layer of rock which is impermeable. So essentially, natural gas is trapped between layers of two different types of rocks, but through vertical drilling, the natural gas is extracted. 

On the other hand, shale also forms from organic-rich sources. However, these sources are present within the shale rock. The rock is impermeable and this inhibits the gas to migrate towards the surface of the earth. As a result, the gas remains trapped within the rocks. To extract this type of gas, a combination of techniques called hydraulic fracturing and horizontal drilling is used. The wells are drilled horizontally. Later water, chemicals and sand are pumped into the wells to break the hydrocarbons. This process is known as hydraulic fracturing. Together, these processes allow for the extraction of the hidden resource. 

Global Reserves of Shale Gas 

There is a rising environmental concern on the extraction of shale gas. Insertion of water and chemicals into the wells can disturb the water table. It can also contaminate the potential sources of water for nearby habitats. However, considering the exponential increase in global energy demand, there is an increasing extraction of shale gas. 

It is interesting to note that many countries around the world hold large reserves of shale gas. Below is a description of the five countries which hold the largest reserves of shale gas in the world. 


Shale gas exploration is a very recent practice however, it progressed very rapidly. China holds almost 770 trillion cubic feet of recoverable shale gas reserves with more than 26.98 trillion cubic feet of proven shale gas reserves. In 2016, the overall production of shale gas in China was around 280 billion cubic feet and it is expected to reach more than 1 trillion cubic feet by 2020.


Argentina is known to be the largest producer of dry gas. It also holds the second-largest reserves of shale gas. The country possesses 802 trillion cubic feet of shale gas. The extraction of shale gas from Argentina began after 2013 when Chevron and YPF, a vertically integrated energy company in Argentina, signed an agreement to develop the shale gas facility in the VacaMuerta field.  


Algeria, the largest country in Africa and the Arab world is also the third-largest country in the world when it comes to shale gas reserves. It possesses 70 trillion cubic feet of technically recoverable shale gas. Significant foreign investment from ENI, Royal Dutch Shell Plc and Talisman Energy Inc. will certainly play an important role in the development of shale gas facilities in Algeria. 


According to the estimates, the US holds the fourth-largest reserves of shale gas following China, Argentina and Algeria. It holds 665 trillion cubic feet of shale gas. As of now, the country is producing 87 billion cubic feet of shale gas per day. This product is expected to increase further. This increase in the extraction of shale gas has provided a boom to the US economy. It is estimated that the shale gas reserves are enough to sustain the energy needs of the US economy for the next 110 years.   


Canada is one of the largest producers of natural gas in the world. It also holds the fifth-largest reserves of shale gas. It is estimated that the country holds 573 trillion cubic feet of shale gas reserves. There are significant explorations in Alberta, British Columbia and New Brunswick. However, due to inadequate local infrastructure and environmental protection laws, the country is unable to capitalize on this resource so far. Given the limited population and huge reserves of shale gas, the Canadian economy can continue to rely on this resource throughout the next century. 


With the depleting natural resources and ever-increasing global energy demand, shale gas is the new ray of hope for the global economy. Apart from the list of countries, there are many other countries that hold large reserves of shale gas including Mexico, Australia and South Africa. Looking at the reserves, we can safely assume that this important resource can continue to meet the global energy needs for years to come. 

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