In an upcoming column for the February issue of the Wiley journal, Natural Gas and Electricity, NERA Senior Vice President Dr. Jeff Makholm examines why shale gas development is strictly a US phenomenon when there is an abundant supply throughout the world. Dr. Makholm posits that there are three distinct reasons why shale gas has only been a US development so far—having little to do with technology or the cost of locating or extracting shale gas. The US shale gas boom is distinguishable because in the US, the farmer owns the gas, the highly competitive oil/gas field service sector is everywhere, and simply connecting to the nearest interstate pipeline completes the journey to market.

When considering shale gas development in other markets, such as Europe, it is hard to foresee any realistic, near-term potential for competitive entry into the system. The movement of gas within the European common market is getting ever more complicated, where each member state controls its own pipeline with distinct regulation. Limitations of gas movement through the European market chills the relationship between those who would develop shale plays and their ultimate markets, increasing the likelihood that shale gas development will remain a US phenomenon and regional prices will be driven down for a long time.

Makholm, Jeff D. (2016, February). Why Does Most Shale Gas Worldwide Remain in the Ground? Natural Gas & Electricity 32/7, ©2016 Wiley Periodicals, Inc., a Wiley company.