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Comparative Study and Analysis of the Development of Shale Gas between China and the USA

Figure 1. The relationship between shale gas and other types of oil and gas reservoir (revised from Schenk C. J. & Pollastro R. M., 2001 [5] ).

ABSTRACT

In the 21st century, the shale gas is a greatly potential unconventional gas resource, which can serve as an important complement to conventional energy sources, and can effectively alleviate the energy pressure of the world. The development of shale gas in the USA is in the developing stage with advanced exploitation technology and huge reserves. Compared with the USA, the development of shale gas in China is still in the early stage. The development of shale gas is both an opportunity and a challenge. China is in the exploration and preparation stage of resource assessment and exploration.

 

Authors:

Qianqian Wang, Lu Wang

School of Earth Sciences and Resources, China University of Geosciences, Beijing, China
Received 5 January 2016; accepted 26 February 2016; published 29 February 2016
Copyright © 2016

This paper presents the importance of the formation principle of shale gas and the energy application, and compares the progress of shale gas studies, exploitation technology as well as the study hot-points between China and the USA. Meanwhile, this paper states the difficulties and challenges with the development of shale gas in China.

1. Introduction

Shale gas is an unconventional natural gas resource with immense potential in twenty-first Century, which can be an important supplement to conventional energy sources and can effectively relieve the pressure on the world’s energy (Table 1).

Shale gas is the natural gas in the shale beds [1] , and is different from the conventional gas reservoir. The shale beds are not only the source rock of the natural gas, but also the reservoir rock and overlying strata for the concentration and preservation of natural gas. The accumulation mechanism is essentially a dynamic balance between occurrence states of natural gas in shale pore [2].

Table 1. Distribution of the globe shale gas (after World Resources Institute [3] ).

Table 1. Distribution of the globe shale gas (after World Resources Institute [3]).

Shale gas is defined as natural gas from shale formations, with the shale acting as both the source and the reservoir for the natural gas. Shale gas is a kind of natural gas gathering in free and absorbent forms in shale bed. There is only the free shale gas in the cracks, while both free and absorbent shale gas are in the groundmass (Figure 1). Each of these shale gas basins is different and each has a unique set of exploration criteria and operational challenges. For China, the development of shale gas is both an opportunity and a challenge [4]. The United States is a huge energy consuming country in the world. Then, the US government hopes to seek more energy supply channels to change the passive situation, i.e. the large degree of dependence on oil. Over the past ten years, shale gas has become an increasingly important natural gas resource in the United States, and it has received wide attention from other countries around the world.

Figure 1. The relationship between shale gas and other types of oil and gas reservoir (revised from Schenk C. J. & Pollastro R. M., 2001 [5] ).

Figure 1. The relationship between shale gas and other types of oil and gas reservoir (revised from Schenk C. J. & Pollastro R. M., 2001 [5]).

2. Research of the Shale Gas

2.1. Research of the Shale Gas in the USA

Shale beds in the USA are mainly developed in more than 20 basins of the North America platform with different sizes, while the commercial exploitations of shale gas are concentrated in five basins, i.e. Fort Worth , San Juan , Michigan , Appalachian and Illinois. After years of commercial operation, intensive well network has been arranged and generated enough scale of economic benefits. The recovery of shale gas is also improved up to 20% [6].

Combination of production, education and research is the secret of the success of the revolution of shale gas in the USA. It is the small and medium companies to promote the technology innovation and commercialization of the shale gas field in the USA , while the large companies promote the development of shale gas industry in the relatively mature stage. The main gas technology of shale gas mining in the USA is developed by the small and medium-sized energy companies and technology service corporations.

Many companies take part in the process of a technology from research to commercialization. Small-medium sized companies and large companies have different roles during the development of shale gas. The former completes the technology and commercialization, while the latter takes advantage of the long-term and investment capabilities. Large companies can take the technology and production into large-scale in the late stage through the acquisition of shale gas block or mining technology of small-medium companies, or joint venture cooperation with small-medium companies. This social division and cooperation between the small-medium companies and large companies achieve a balance of the production and mining costs of shale gas industry, which promote the development of shale gas in the USA [7].

2.2. Research of the Shale Gas in the China

In the Asia Pacific region, the shale gas reserves are very rich in the China and Australia. The two countries as well as India , Indonesia has already started to investigate and exploration of shale gas resources.

The research of the shale gas in the China is late, and the first report about the shale gas was in the journal of “World Well Logging Technology” in the 4th volume of 1996. But until the classic article, i.e. “Fractured shale-gas systems” by J. B. Curtis, has been translated by Darong Li in 2002, the shale gas just started to be paid close attention by the domestic scholars [2]. The accumulation conditions, exploration and development of the shale gas in these basins have been studied substantially [8] -[12].

Through field geologic survey, analysis of drilling and logging information and sample experimental tests, The features of organic matter enriched shale distribution, organic geochemical features, reservoir characteristics has been studied, and gas bearing potential in the Lower Cambrian Niutitang Formation, Hunan-Guizhou area and the prospect of shale gas exploration is discussed [13]. The geological characteristics of the mud-shale strata and exploration potential of shale gas in the center and northeast of Hunan Province have been analyzed [14]. The main controlling factors of marine shale gas accumulation in the south of Sichuan and its adjacent areas have been studied [15]. Overall, the development of shale gas in China is still in the exploration and preparation stage of resource assessment and exploration. In July 2011, Ministry of land and resources in China held the first round of shale gas prospecting tender. All kinds of cooperation in the development, technical cooperation and studies have been started by the relevant departments and oil companies in China and the USA.

Gas shale development in China has just started. The overall is in the exploration and preparation stage of resource assessment and exploration. In July 2011, China’s Ministry of land and resources held the first round of gas shale prospecting tender. China’s relevant departments and oil companies have also been working with the United States in the gas shale development, technical cooperation, research and other aspects of a variety of forms of cooperation.

Degree of shale gas development in the United States is more mature than in China, and the promotion of its shale gas mining technology relies mainly on small and medium-sized companies. However, the development of shale gas in China has just started, which needs the leadership of the national large-scale enterprises, so its main core technology concentrated in large enterprises.

3. Developmental Prospects of Shale Gas

The development of shale gas shale is system engineering, including many key technologies such as hydraulic fracturing technology, horizontal drilling technology, selection evaluation techniques, experimental analysis technology, micro-seismic monitoring technology, logging interpretation technology and three-dimensional seismic technology and so on. According to foreign experience, perfect infrastructure for natural gas production is one of the important criteria to evaluation of the development and use of shale gas.

3.1. Developmental Prospects of Shale Gas in the USA

In 2000, shale gas productions in the USA are 36.62 billion cubic meters, accounting for only 1% of total natural gas. While, by 2010, shale gas productions are up to 137.92 billion cubic meters (equivalent to 23% of total natural gas productions) because of the development of hydraulic fracturing technology, horizontal drilling technology and so on. In 2013, Energy Information Administration of the USA forecasted that 46% of natural gas productions will from shale gas by 2035 (Figure 2). It is not accidental for the huge success of the development of shale gas in the USA, to a large extent, which is depend on multi-factors such as the technological progress, the perfect market environment and policies favoring to the development of emerging industries.

Figure 2. Forecast of the shale gas productions of the USA (after US Energy Information Administration, 2015 [16] ).

Figure 2. Forecast of the shale gas productions of the USA (after US Energy Information Administration, 2015 [16]).

3.2. Developmental Prospects of Shale Gas in China

The resources of shale gas in China are mainly distributed in Paleozoic marine shale in the South China, and the reservoir bed are characterized by strong tectonic reworking, complex stress, buried deep and complicated surface conditions [17]. In addition, some continental sedimentary basins, such as Songliao basin, Erdos basin, Turpan Hami basin and Junggar basin, have shale beds with the conditions for the enrichment of shale gas. The most favourable metallogenic zone of shale gas resources is distributed in the Qijiang County, Wansheng County, Nanchuan County, Wulong County, Pengshui County, Youyang County, Xiushan County, Wuxi County and other counties in Chongqing City, therefore, which been identified as the first batch of field exploration target area.

“Development of gas shale during the Twelfth Five” has been released in March 16, 2012. This plan proposed that the domestic production of shale gas will reach 6.5 billion cubic meters by 2015, and will be expected up to 60-100 billion cubic meters. However, the data from the Ministry of land and resources show that the implement extent of the shale gas resources to implement the extent and the reliability of resource data are relatively low, then, the gap between China and the USA is very obvious.

“The challenges of the shale gas market of China in 2015”, released by the Zhiyan consultant, show that the shale gas survey in China has been invested more than 7 billion RMB, and more than 80 of construction drillings and more than 20 of the horizontal wells have been finished. 15 million cubic meters of shale gas have been sold in 2012 through the natural gas pipeline network, and the cumulative sales of shale gas are up to 30 million cubic meters. According to the “development plan of shale gas” released by the National Development and Reform Commission, by 2015, the annual output of gas shale in China will up to 6.5 billion cubic meters, and will expected to be 100 billion cubic meters by 2020. By then, gas shale will account for 10% of the energy demand in China (Figure 3).

Figure 3. Forecast of the shale gas productions of China (after Fan, 2007 [18] ).

Figure 3. Forecast of the shale gas productions of China (after Fan, 2007 [18]).

All around the world, mud and shale account for about 60% of all sedimentary rocks, therefore, shale gas resources have great prospects. The shale gas resources are mainly distributed in North America, Central Asia, China , Latin America, the Middle East, North Africa as well as the former Soviet Union. Among them, the shale gas reserves of China are World first with recoverable reserves of 36 trillion cubic meters. By current consumption levels, these reserves are sufficient to use for more than 300 years.

At present, shale gas potential resources in the USA are 108 trillion cubic meters, among which recoverable resources are 24 trillion cubic meters. The annual number of drilling are more than 100 thousand, and the annual investment are up to one hundred billion US dollars. Moreover, there are thousands of the development companies related to shale gas. On contract, shale gas potential resources in China are 134.4 trillion cubic meters, among which recoverable resources are 25.1 trillion cubic meters. But, the annual number of drilling are less than 50, and the development companies related to shale gas are only five [19]. The above data sources come from the Internet news and papers. Development is ongoing, and data will also be updated, but shale gas development technology is in progress on the whole, and the importance of shale gas is also increasing.

Comparative Study and Analysis of the Development of Shale Gas between China and the USA

In the 21st century, the shale gas is a greatly potential unconventional gas resource, which can serve as an important complement to conventional energy sources, and can effectively alleviate the energy pressure of the world. The development of shale gas in the USA is in the developing stage with advanced exploitation technology and huge reserves. Compared with the USA, the development of shale gas in China is still in the early stage. The development of shale gas is both an opportunity and a challenge. China is in the exploration and preparation stage of resource assessment and exploration. This paper presents the importance of the formation principle of shale gas and the energy application, and compares the progress of shale gas studies, exploitation technology as well as the study hot-points between China and the USA . Meanwhile, this paper states the difficulties and challenges with the development of shale gas in China .
Emanuel Martin
Emanuel Martin is a Petroleum Engineer graduate from the Faculty of Engineering and a musician educate in the Arts Faculty at National University of Cuyo.
http://www.allaboutshale.com

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