The Global Impact of Unconventional Shale Gas Development Economics, Policy, and Interdependence Natural Resource Management and Policy

Natural Resource Management and Policy Series Editors: David Zilberman · Renan Goetz · Alberto Garrido Yongsheng Wang William E. Hefley Editors The Global Impact of Unconventional Shale Gas Development Economics, Policy, and Interdependence Natural Resource Management and Policy Volume 39 Series editors David Zilberman, Berkeley, USA Renan Goetz, Girona, Spain Alberto Garrido, Madrid, Spain There is a growing awareness to the role that natural resources, such as water, land, forests and environmental amenities, play in our lives. There are many competing uses for natural resources, and society is challenged to manage them for improving social well-being. Furthermore, there may be dire consequences to natural resources mismanagement. Renewable resources, such as water, land and the environment are linked, and decisions made with regard to one may affect the others. Policy and management of natural resources now require interdisciplinary approaches including natural and social sciences to correctly address our society preferences. This series provides a collection of works containing most recent findings on economics, management and policy of renewable biological resources, such as water, land, crop protection, sustainable agriculture, technology, and environmental health. It incorporates modern thinking and techniques of economics and management. Books in this series will incorporate knowledge and models of natural phenomena with economics and managerial decision frameworks to assess alternative options for managing natural resources and environment. More information about this series at http://www.springer.com/series/6360 Yongsheng Wang • William E. Hefley Editors The Global Impact of Unconventional Shale Gas Development Economics, Policy, and Interdependence 123 Editors Yongsheng Wang William E. Hefley Department of Economics and Business Naveen Jindal School of Management Washington and Jefferson College University of Texas at Dallas Washington, PA Richardson, TX USA USA Natural Resource Management and Policy ISBN 978-3-319-31678-9 ISBN 978-3-319-31680-2 (eBook) DOI 10.1007/978-3-319-31680-2 Library of Congress Control Number: 2016935574 © Springer International Publishing Switzerland 2016 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. Printed on acid-free paper This Springer imprint is published by Springer Nature The registered company is Springer International Publishing AG Switzerland Contents Introduction ............................................ 1 William E. Hefley and Yongsheng Wang Unconventional Shale Energy and the Strategies of Nations ......... 15 Theresa Sabonis-Helf The Politics of Shale Gas and Anti-fracking Movements in France and the UK ....................................... 43 John T.S. Keeler Shale and Eastern Europe—Bulgaria, Romania, and Ukraine ........ 75 Atanas Georgiev Unconventional Drilling for Natural Gas in Europe ............... 97 Robert Dodge Shale Development and China ............................... 131 Haitao Guo, Yongsheng Wang and Zhongmin Wang Shale Gas Development and Japan ........................... 149 Clifford A. Lipscomb, Hisanori Nei, Yongsheng Wang and Sarah J. Kilpatrick Can a Shale Gas Revolution Save Central and South Asia? ......... 171 Jennifer Brick Murtazashvili Fracking in Africa ....................................... 199 Caitlin Corrigan and Ilia Murtazashvili Shale Development and Mexico .............................. 229 Thomas Tunstall v Introduction William E. Hefley and Yongsheng Wang Abstract The booming stories of shale gas development in the US have changed the energy discussion around the world. The supply of cheap shale natural gas from the US and potentially from other shale-abundant countries, e.g., China, Canada, Argentina, Mexico, Germany, UK, Poland, and South Africa, could completely change the energy landscape across the globe. It could have significant impact on not only energy-producing countries, but also large energy consumption countries, e.g., Japan. This chapter provides a background review of global unconventional shale gas development and its potential impacts and challenges. It introduces the breadth of topics addressed in this volume, spanning the economic, policy, and security issues surrounding unconventional gas development globally. Shale Resources and Global Energy Portfolio World energy consumption is experiencing significant changes. With the increase of energy efficiency and the availability of alternative energy sources, traditional fossil fuel experienced a steady decline in the global energy mix in recent years and possibly into the future. However, natural gas is not only holding its ground but also projected to increase in the next several decades according to several forecasts (US Energy Information Agency 2013; International Energy Agency 2014; US Energy Information Agency 2015). Natural gas produces lower greenhouse emission comparing to other fossil fuels, which allows it to be a bridge fuel for the transition from traditional fossil fuel to renewable energy (Brown et al. 2009). The steady W.E. Hefley (&) Naveen Jindal School of Management, University of Texas at Dallas, 800 W. Campbell Rd., SM 33, Richardson, TX 75080, USA e-mail: William.Hefl[email protected] Y. Wang Department of Economics and Business, Washington and Jefferson College, Washington, PA 15301, USA e-mail: [email protected] © Springer International Publishing Switzerland 2016 1 Y. Wang and W.E. Hefley (eds.), The Global Impact of Unconventional Shale Gas Development, Natural Resource Management and Policy 39, DOI 10.1007/978-3-319-31680-2_1 2 W.E. Hefley and Y. Wang demand of natural gas provides the incentives to explore and develop more natural gas reserves. With technological advancements such as hydraulic fracturing and directional drilling, shale gas became a popular choice in recent decades. Proved natural gas reserves have grown from 119.1 trillion cubic meters in 1994 to 187.1 trillion cubic meters in 2014, with almost as much reserves in Europe and Asia as there are in the Middle East (BP 2015). Much of this growth is in proved reserves of “unconventional” gas, which is gas that cannot be extracted by “con- ventional” technologies. There are five main forms of unconventional gas: • Coalbed methane (CBM), which is contained within the coal from which it was generated. • Shale gas embedded within the shale from which it was generated. • Tight gas in reservoirs of very low quality that requires stimulation. • Biogenic gas, produced through contemporary biological processes. • Gas hydrates that are preserved in ice on the deep-sea floor or in permafrost. (Andrews-Speed and Len 2014). Forecasts predict a growth in industrial energy use associated with the growth of energy supplies from shale gas (US Energy Information Agency 2015). One optimistic scenario has predicted that shale gas could become almost a quarter of global gas production by 2030 and account for one-third of global gas production by 2040 (Gracceva and Zeniewski 2013). It also suggests that the share of natural gas in global primary energy supply could reach 31 % by 2040 (Gracceva and Zeniewski 2013). Of course, there are those who caution against these forecasts due to the size of reserves, potential productivity levels that may be achieved or the costs necessary to achieve those levels in these yet to be fully explored deposits (O’Sullivan and Montgomery 2015; Gracceva and Zeniewski 2013). Shale gas development in recent years has changed the energy discussion in the US, as existing reserves of natural gas coupled with horizontal drilling and hydraulic fracturing make exploitation of these reserves economically feasible. The importance of natural gas is seen as likely to continue to expand over the coming years and is expected to increase even further with environmental considerations, such as greenhouse gas emissions (MIT Energy Initiative 2011). Some have even referred to this phenomenon as a “revolution” (Kolb 2012a). Shale Gas and Global Energy Supply Chain Recent analyses have identified in place and technically recoverable shale gas and shale oil in the 95 shale basins and 137 shale formations in 41 countries outside the United States (Advanced Resources International, Inc. 2013). Natural gas potential and concerns impact many regions of the globe, including the United States, Canada, Russia, the EU-27 (e.g., Poland, France, Germany, United Kingdom, and Spain), Ukraine, the Baltic and Caspian states, Turkey, Asia, including China, Mongolia, Turkmenistan,

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