With the development of various extraction techniques, the production of shale gas has, over the past ten years, created a new, higher level of natural gas supply throughout the world and is predicted to continue to do so in the coming years. Such an abundance can be attributed to one of the most effective methods for the extraction of shale gas—hydraulic fracturing. Thus, the efficiency of the process will propel further growth in its use from 2023 to 2033.
According to Future Market Insights, the shale gas hydraulic fracturing market is expected to garner a robust compound annual growth rate (CAGR) of 10.9% during the forecast period (2023 to 2033), Table 1. The use of shale gas fracing has come under increased scrutiny, owing to the growing emphasis on harnessing unconventional sources of energy. For a number of years, hydraulic fracturing has been a a highly popular technique in Canada, the United States, and China, three major global economic powerhouses. In 2022, the shale gas hydraulic fracturing market in these three countries, combined, comprised roughly 35% of the global share. In recent years, shale gas has been used more often as an energy-efficient fuel to generate power, which is encouraging market expansion.
In this article, we will discuss why shale gas is highly preferred in the U.S., how the Huff-n-Puff technique can reduce the risks of environmental impacts, how micro seismic monitoring can be used to increase the efficiency of fracturing and decrease the risks of earthquakes, and how China is using lost-cost technology for shale gas fracturing.
SHALE GAS POPULARITY IN THE U.S.
One of the benefits of shale gas over other resources is its large storage capacity and widespread distribution. Consider American shale gas as an illustration. According to USGS research, the country's recoverable shale gas reserves are conservatively estimated to be 85 Tcf, with much more optimistic projections of almost 500 Tcf. Furthermore, as it is believed that these resources are widely dispersed in portions of Pennsylvania, West Virginia, New York, and Ohio, recovering 10% of this shale gas, or even 50 Tcf, would be equivalent to roughly twice the country's yearly natural gas consumption. It is true that the known shale gas reserves within the U.S., alone, presently outnumber the country's conventional gas reserves. Thus, over the past two years, a rise in demand has been noted in this area.
In the U.S., hydraulic fracturing has been employed frequently to recover shale gas, and oil, since 1947. The Independent Petroleum Association of America says that more than 1.7 million U.S. wells have been completed using the fracing process, producing more than 600 Tcf of gas and 7 Bbbl of oil. Together, these wells have supported 5.6% of the labor force.
During the projected period, the U.S. will continue to lead the shale gas hydraulic fracturing market, Table 2. This growth is propelled by the rising use of resources that are substantially less expensive and the profusion of major market competitors. The booming economy, quick industrialization, growing disposable income, and affluent lifestyle are the driving forces behind this expansion of the shale gas hydraulic fracturing industry in the U.S.
Shale gas is both produced and used in enormous quantities around the country, utilizing horizontal drilling along with hydraulic fracturing. The U.S. Energy Information Administration (EIA) estimates that in 2021, the US produced roughly 27.2 Tcf of dry shale gas. Accordingly, roughly 79% of the dry gas produced in the U.S. in 2021 came from shale gas.
Some of the key benefits that the U.S. yields from shale gas fracturing are:
- Shale gas contributes 25% of the country's overall energy needs and is utilized to produce 25% of the country's power. Between 2014 and 2020, the net generation from natural gas-fired power plants climbed 36%, along with steady growth in shale gas supplies
- 56 million homes and companies are heated by shale gas, which also provides 35% of the feedstocks and energy required by American industries
- Around 7,000 businesses operate onshore, comprising 2,000 drilling operators along with hundreds of service providers
- Over 2 million Americans are directly employed by shale gas operations, and they generate about $175 billion in labor income
- Through severance taxes, corporate taxes, royalties on federal property, payroll, sale, property, usage, and excise taxes, among other sources, shale gas contributes more than $250 billion to government revenue annually.
Hence, considering the abovementioned factors, it is anticipated that the U.S. market for shale gas hydraulic fracturing will open up new avenues for various industries during the forecast period.
COMBATTING FRACTURING IMPACTS WITH HUFF-N-PUFF
Even though shale gas extraction may be a large source of income for governments as well as practitioners, several governments, like the State of California, have imposed limits on the placement and quantity of fraced wells. The reason cited is because of the existing risks associated with fracing wells.
Huff-n-Puff is one of the latest technologies being utilized to improve shale gas extraction, to increase the efficiency of the extraction process. The Huff-n-Puff (HnP) approach has a reputation for being particularly successful in boosting shale gas production, because it is less expensive and more productive in systems with highly non-homogeneous permeability. By using this method, high-permeability hydraulic cracks in the reservoir may be used to transport blending fluids.
Following the incorporation of these systems, the oil and/or gas are forced back into the fissures and ultimately into the wellbore. As a result, it is feasible to improve shale oil and gas flow efficiency while decreasing systematic errors, which can significantly improve production efficiency.
INDUCED MICRO SEISMIC MONITORING INCREASES EFFECTIVENESS
A geophysical remote-sensing technique called “induced micro seismic monitoring” allows for the detection and localization of related fracturing activities, either in real time or after the occurrence. In a typical field implementation, several constantly recording three-component geophones are installed in one or more observational wells close to the area of interest, together with a collection of surface sensors. Apart from the relatively recent oil and gas sector use, the seismological as well as mining research groups have been working on micro seismic monitoring systems for years.
Micro seismic monitoring strives to identify, pinpoint and describe the types of micro seismic events brought on by any geomechanical modifications for caprock stability, wellbore integrity, and/or hydraulic fracturing effectiveness in the oil and gas industry. When monitoring and optimizing hydraulic fracturing is the aim, micro seismic events typically occur in enormous numbers within cloud-like patterns that mimic underlying fracture systems. This technique enables real-time surveillance of fracturing operations intending to determine the amount of rock that has been stimulated and, therefore, the extent of the treatment's efficacy. Additionally, it could result in potential advancements in reservoir draining.
British Columbia example. For instance, several pilot studies and research projects concerning the creation of shale gas reservoirs have been conducted in the Horn River basin in the northeastern part of British Columbia (BC) in Canada. The region has seen hundreds of hydraulically fractured wells, and over the past ten years, unusual seismicity has been recorded. Slickwater fracturing, which involves pumping a mixture of chemicals, proppants, and water-based liquid to improve fluid flow, was used in many phases to hydraulically fracture the Horn River shales in those horizontal wells. The target shale strata were the only ones where fracture development was seen in this location during micro seismic monitoring. The analysis proved that the mechanism behind the recorded seismicity was the recurrence of prior faults brought on by growing pore pressure. It also showed how crucial a dense array is to gauging induced seismicity.
Chinese example. To track micro seismic activity related to hydraulic fracturing of a shale gas resource in China, a variety of surface and downhole sensors were deployed. To optimize the fracturing process, the data were utilized in real time to adjust the pre-pad liquid parameters, the perforations, as well as the temporary additive release time. The research claimed that this real-time micro seismic monitoring optimization enhanced the overall shale gas production rate by two to five times, and they were able to back up their claims with further production tests. The real-time data were critical in the instant evaluation and adjustment of fracture parameters.
Hence, with such technological advancements, it has become a lot easier for oil and gas experts to detect the real-time activities that take place during hydraulic fracturing. Such factors are expected to propel the growth of this market in the years to come.
LOW-COST DOMESTIC TECHNOLOGY IN CHINA
An oil field on a flattened mountaintop south of Chongqing, in southwestern China, has been set up for fracing, where a fleet of high-rise red fracturing trucks pumps various chemicals, along with sand, into a horizontal well of 1,500-m depth.
Sinopec, a state-owned energy giant of China, designed and constructed the apparatus as the result of a government initiative to create domestic low-cost equipment to access the nation's enormous shale gas reserves that are hidden in the area's hilly terrain. China has mastered this most recent important technology. Everything from the trucks and turbines to drilling fluids and proppants—treated sands or man-made ceramic used to "prop" open a fracture so that gas may escape—are all manufactured by Sinopec, along with several independent enterprises. Only a small number of higher-end equipment were purchased from outside the country.
They conducted at least 95% of the service work themselves. Foreign companies only handled a small portion of the project's work. International companies, like oil service firms Halliburton, SLB and Baker Hughes, have reduced their activities in China, as a result of the government-backed initiative. This initiative is partly driven by the need to cut costs, given the drop in oil prices. In this manner, China has been cutting costs in its shale gas hydraulic fracturing methods.
CONCLUSION
There has been a significant increase in the demand for alternative sources of energy, as global energy consumption has risen. Due to its low cost, as well as environmental friendliness, shale gas is growing in popularity. Traditional techniques for shale gas extraction have become inefficient, since they take a long time, cost a lot of money, and can harm the environment. Hence, the focus has moved toward hydraulic fracturing.
As a result, fracing is becoming increasingly popular. Globally, Canada, the U.S., and China dominate the hydraulic fracturing market for shale gas. As a result of increased usage of relatively cheaper resources and the presence of leading market players, the U.S. will continue to be the dominant player in the shale gas hydraulic fracturing market.
Due to increased investment in oil and gas operations and improvements in the hydraulic fracturing process, China is holding a growing share of the shale gas fracing market, Table 3. Shale gas demand is also growing across key industries, thus boosting market growth. China’s rapidly surging energy demand is forcing the government, along with other companies, to accelerate shale gas production. Using hydraulic fracturing to extract shale gas is becoming more popular throughout the country, because it is a more convenient, practical and quicker method to extract shale gas.
During the forecast period of 2023 and 2033, the shale gas hydraulic fracturing market in Canada (Table 4) is expected to surge 7.9%, CAGR, as natural gas demand increases and fracing adoption continues to rise. Over the past 15 years, Canada has seen a tremendous increase in its shale gas production. The Canadian government is pursuing several methods to encourage expanded use of shale gas and thereby reduce pollution in the nation. By 2040, approximately 30% of the nation's overall natural gas output is expected to come from shale gas, according to the U.S. EIA.
With the demand for shale gas increasing across all these countries, various key players situated in this market are moving toward adopting various new technologies to reduce costs, increase extraction efficiency and reduce the risks associated with fracturing. Thus, in the coming ten years, some breakthrough advancements can surely be expected in this sector.
About the Authors
Nikhil Kaitwade
Future Market Insights Inc.
Nikhil Kaitwade is associate vice president at Future Market Insights Inc. He has more than a decade of experience in market research and business consulting, having delivered over 1,500+ client assignments, predominantly in the Automotive, Chemicals, Industrial Equipment, Oil & Gas, and Service industries. His core expertise is in formulation of research methodology, creation of unique analysis framework, statistical data models for pricing analysis, competition mapping and market feasibility analysis. Mr. Kaitwade also advises clients on identification of growth potential in established as well as niche market segments, investment / divestment decisions, and market entry decision-making. He earned a BE degree in mechanical engineering and an MBA in Marketing and IT. Mr. Kaitwade has authored several publications and been quoted in various business journals.
