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Light Tight Oil and Unconventional Gas: ‘Golden Rules’ to Stay On-track
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Light Tight Oil and Unconventional Gas: ‘Golden Rules’ to Stay On-track

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  • 1. Light Tight Oil and Unconventional Gas:‘Golden Rules’ to Stay On-track Maria van der Hoeven Executive Director International Energy Agency Houston, August 2012 © OECD/IEA 2011
  • 2. Deglobalization of gas markets Avg. gap in 2011: USD 5.8/MBtu Avg. gap in 2011 USD 5.0 /MBtu Source: ICE, EIA, IEA, German Customs, Japanese Customs, McCloskey © OECD/IEA 2011
  • 3. Global gas resources represent 250 years ofcurrent gas production  Natural gas can enhance security of supply: global resources exceed 250 years of current production  Thanks to unconventional gas, gas resources are more homogenously spread between regions © OECD/IEA 2011
  • 4. Light Tight Oil (LTO) Stops US Output Decline,Cuts Imports kb/d US Liquids Forecast (2011-16) PADD 2 Imports 12,000 2000 US - GOM Total PADD 2 Imports 10,000 US - Other Other Countries Lower 48 1500 Canada 8,000 US - Texas 6,000 US - California 1000 4,000 US - Alaska 500 US - Other 2,000 US - NGL 0 0 1994 1997 2000 2003 2006 2009 2012 MTOGM Jun-11  Companies employing horizontal drilling, hydraulic fracturing to target liquids-rich shales.  Expect LTO to grow by 1.1 mb/d by 2016  NGL supply revised up because producers are targeting liquids-rich gas plays and light tight oil plays. © OECD/IEA 2011 Source: IEA Oil Market Report 4
  • 5. Rolling back shale gas production would lead toa less secure and less sustainable energy system Selected natural gas trade volumes, 2035 Net imports Net exports Golden Rules Case China Additional net trade in European Union Low Unconventional Case United States & Canada Middle East Russia -600 -400 -200 0 200 400 600 bcm Gas trade in the Low Unconventional Case is up 30%, some trade patterns are reversed, gas prices are higher & the position of the main conventional exporters reinforced © OECD/IEA 2011
  • 6. Hydraulic fracturing can be done safely, but ‘goldenrules’ are essential to maintain social acceptance © OECD/IEA 2011
  • 7. Light Tight Oil and Unconventional Gas:‘Golden Rules’ to Stay On-track Maria van der Hoeven Executive Director International Energy Agency Houston, August 2012 © OECD/IEA 2011