What is shale gas?

Coming up with new methods of supplying gas is high on many country's agendas at the moment and one of the exploration strategies being used is shale gas.

Simply put, this is the natural gas that is trapped within shale formations. These are sedimentary rocks which can be rich in the resource, making it a valuable asset for countries that have strong supplies.

Global leaders in shale gas production

In many respects, the US is currently considered the world leader in shale gas. It has abundant reserves and most of the energy produced is used within the country itself.

The other two countries that are making headway in the sector are Canada and China, but their production levels are minimal compared to those in the US.

However, as new sources emerge it's entirely possible that other nations will start to come to the fore.

Shale gas in Australia

It's not yet apparent just how many shale gas reserves Australia has, although there are high hopes this resource will be able to contribute to the energy mix in the near future.

A CSIRO report reveals how Western Australia is believed to have the fifth-largest shale gas reserves in the world, which is more than double that held in offshore locations.

Data from the US Energy Information Administration indicates that Australia could have as many as 396 trillion cubic feet (tcf) in technically recoverable shale gas, with one tcf the equivalent to the country's yearly domestic gas usage.

CSIRO believes rising gas prices may give further incentives for these shale gas sites to be explored, especially as international companies start to recognise the potential.

Key Australian sites

There are several locations throughout Australia that have already been earmarked as providing potential shale gas reserves.

For example, the Galilee Basin has shale with high organic matter content and water wells drilled over the past 100 years have shown signs of oil and gas.

The area remains relatively unexplored compared to some other parts of the country and the northern part of the Galilee Basin is expected to prove fruitful.

One of the biggest barriers to companies undertaking exploration in the area is likely to be the significant investment needed to gain access to the core markets.

Another notable Queensland site is the Bowen Basin in the east of the state, which covers approximately 160,000 sq kilometres.

Large volumes of methane gas have been discovered at shallow depths in the north of the basin and there is already potential for developments in coal seam gas.

The Canning Basin in Western Australia has been pinpointed as a potential area for exploration. Its remote location and low population do, however, mean there is little infrastructure to support a development.

Opportunities might also be found in the Sydney Basin, which spans the central eastern coast of New South Wales. More than 100 wells have already been drilled at the onshore basin alone.

It's part of a much bigger area that extends more than 1,500 kilometres from the Bowen Basin in Queensland to New South Wales' Gunnedah Basin.

What the future holds for shale gas

CSIRO identifies that shale gas has some way to go before it makes an impression on the country's energy market, not least because large-scale investments are going to be needed.

It believes that the majority of Australia's shale gas will be exported as liquefied natural gas, which has the potential to support the national economy.

The feasibility of the resource will need to be properly assessed if any company is going to make the large capital investment that will be required.

Posted by Richard West