The successful development of gas and oil resources from shales in North America

The hydrocarbon resources of shale gas and tight oil have made a significant impact on North American energy reserves over the past decade. The production of so-called unconventional natural gas from U.S shales like the Barnett, Haynesville, Fayetteville, Marcellus, and Utica, and Canadian shales like the Muskwa, Montney, and Duvernay have saturated North American gas markets, boosted Canada's exports, and turned the U.S. into a net exporter of natural gas. Tight oil production from the Bakken Shale has made important contributions to the economy of the Canadian province of Saskatchewan. North Dakota has become the second largest oil producing state in the U.S. thanks to production from the Bakken. It trails only the state of Texas, which maintains first place because of equally prolific hydrocarbon liquids production from the Eagle Ford Shale and shales in the Permian basin. It is difficult to overstate the importance of these shale gas and oil resources to the U.S., North American, and world energy economies. North American shale development blossomed in the United States between 2005 and 2010, driven by high natural gas and oil prices, the availability of favorable lease positions on shale plays, and the application of drilling and stimulation technology that could successfully produce commercial quantities of hydrocarbons from these formations at economical costs. Development in Canada began a bit later, and some development has also taken place on shales in Mexico. Many people who express surprise at the apparent overnight success of shale gas and oil production were simply not paying attention. The truth is that a historic and protracted engineering struggle was required to identify, modify, and apply the right technology for economically-viable production. Modern assessments of the resource potential of these rocks began in the late 1970s, as did the first systematic engineering attempts to drill directional wells and hydraulically fracture shale. Success was elusive for nearly two decades, however, until the right combination of economics and technology came along. The ability of some visionary people to recognize the applications of that technology led directly to the current success of shale gas and tight oil production. Other countries considering development of their own shale resources are looking to the North American example for leadership. The success of shale resource development has not been without controversy. Public fear of the hydraulic fracturing process, or fracking has been amplified by shale gas opponents, leading to restrictions against shale development in many areas, and outright bans in some locations like New York and Quebec. The boomtown nature of the early development, and the lack of definitive environmental risk data has added to the negative perceptions, resulting in a backlash against some exploration and production ventures. Researchers have been gradually reducing the amount of uncertainty with respect to environmental risks, and as operators have gained more experience, the frequency of incidents has fallen. Many operators now recognize that obtaining a social license from the community is a necessary first step for successful shale gas development.