A Closer Look at the Effects of the Shale Boom Worldwide

The drilling technique of hydraulic fracturing, or fracking (which is currently around 50 years old), along with the discovery of vast oil and gas reserves trapped in shale rock across the globe, has led to a worldwide boom in the shale mining industry.

Effect on U.S. Economy

This has been nowhere more firmly felt than in the United States, who have been the pioneers of fracking and shale oil and gas production. The industry was first begun in the States around half a century ago, although now new reserves of shale in a 17,000-square mile radius have been uncovered in parts of Colorado, Utah and Wyoming.

This reserve, known as the Green River Formation, has three times the oil potential that Saudi Arabia currently has (an estimated 1.5 to 1.8 trillion barrels of crude oil), which, depending on who you listen to, could meet the States’ demand for oil for up to 400 years.

Of course, reaching, mining and refining this oil will take considerable labour and resources. And although this will be an expense, it will also create more opportunities for the economy in the shape of jobs, demand for services and for equipment. The article Shale Plays Offer Unprecedented Opportunities looks closer at the particular implications on this massive discovery for the American economy.

Effects Across the Globe

Of course, this abundance of shale potential is not exclusive to the States. Indeed, estimated Russian reserves are even bigger than those in the Green River Formation, and those in China are believed to be almost double. Such potential is obvious for all to see.

However, there have been several obstacles to the growth of shale oil and gas industry. Environmentalists argue that rather than acting as a stop-gap measure between fossil fuels and more sustainable methods of energy, they could actually postpone the pursuit of green resources indefinitely due to their convenience, price and durability.

Even more concerning are the pollution concerns attached to fracking. In order to remove bacteria from the latent oil and gas, harmful chemicals are pumped into the ground. If such chemicals found their way into the local water supply, they could have dire consequences for communities.

Such concerns have been instrumental in limiting the shale industry in Europe, up until recently. However, the European Commission recently refused to place limiting restrictions on the practice of fracking, which has led some to believe that similar economic potential to that being harvested in the US could happen in Europe too. The article Non-Binding Guidelines for UK Shale Gas Exploitation discusses in greater depth the implications of the laws, especially for the British Isles, who have hitherto been resistant to the idea.