Shale oil (light tight oil) is rapidly emerging as a significant and relatively low-cost new unconventional resource in many countries.
There is potential for shale oil production to spread globally over the next couple of decades. If it does, it would revolutionise global energy markets, providing greater long-term energy security at lower cost for many countries.
It is a type of oil contained within shale, a tightly-packed source rock of oil, which has accumulated over millions of years in more conventional reservoirs. The oil is also known as kerogen oil, as it is an unconventional oil produced from oil shale.
Shale gas refers to natural gas that is trapped within shale formations. Over the past decade, the combination of horizontal drilling and hydraulic fracturing has allowed access to large volumes of shale gas that were previously uneconomical to produce. The production of natural gas from shale formations has rejuvenated the natural gas industry across the globe.
Shale oil is contained within shale, a tightly-packed source rock of oil, which has accumulated over millions of years in more conventional reservoirs. Shale is commonly defined as a fine-grained sedimentary rock containing organic matter that yields substantial amounts of oil and combustible gas upon destructive distillation. It means that Shale is a type of sedimentary rock that is rich in kerogen which, in turn, is a part of rock that breaks down and releases hydrocarbons when heated. Hydrocarbons are substances made entirely of hydrogen and carbon. Petroleum and natural gas are probably the most familiar hydrocarbons. The hydrocarbons in oil shale can be used as an alternative to petroleum or natural gas.
Is It a Fossil Fuel?
Like traditional petroleum, natural gas, and coal, oil shale and kerogen are fossil fuels. Fossil fuels developed from the remains of algae, spores, plants, pollen, and a variety of other organisms that lived millions of years ago in ancient lakes, seas, and wetlands.
The hydrocarbons are extracted by pyrolysis, hydrogenation, or thermal dissolution. These processes convert the organic matter within the rock (kerogen) into synthetic oil and gas. The resulting oil can be used immediately as a fuel or upgraded to meet refinery feedstock specifications by adding hydrogen and removing impurities such as sulphur and nitrogen. The refined products can be used for the same purposes as those derived from crude oil.
A sedimentary rock, oil shale, is found all over the world, including China, Israel, and Russia. The United States, however, has the most shale resources.
Capacity to Revolutionize Energy Scenario
According to a recent report by Price waterhouse Coopers (PwC) — a multinational professional services firm headquartered in London — the global shale oil production has the potential to reach up to 14 million barrels of oil per day by 2035 which amounts to 12% of the world’s total oil supply. They further estimate that this increase could reduce oil prices in 2035 by around 25%-40% ($83-$100/ barrel in real terms) relative to the current baseline EIA projection of $133/barrel in 2035, which assumes low levels of shale oil production.
This could increase the level of global GDP in 2035 by around 2.3%-3.7% (which equates to around $1.7-$2.7 trillion at today’s global GDP values). However, the benefits of such oil price reductions will vary significantly by country. Large net oil importers such as India and Japan might see their GDP boosted by around 4%-7% by 2035, while the US, China, the Eurozone and the UK might gain by 2%-5% of GDP.
Pakistan’s Shale Oil
As of August 2013, Pakistan’s proved reserves of natural gas stood at around 105 trillion cubic feet (Tcf). Pakistan is left with only 50 per cent natural gas reserves as high consumption in different sectors has exhausted 50 per cent of the overall reserves of 54 Tcf by financial year 2011-12.
Gift of God to Pakistan
According to the US Energy Information Administration (EIA), an agency of the US Federal Statistical System, Pakistan has 586 Tcf of “risked shale gas in-place” and 227 billion barrels of risked shale oil in-place.”
586 Tcf of risked shale gas = 400 years worth of gas supply
227 billion barrels of risked shale oil = 1,700 years worth of oil supply Of the 586 Tcf, Pakistan’s “technically recoverable shale gas resource is estimated at 105 Tcf which is 73 years worth of gas supply while of the 227 billion barrels, Pakistan’s “technically recoverable shale oil resource is estimated at 9.1 billion.” For Pakistan, that is 68 years worth of crude oil supply.
Among the World’s total technically recoverable shale oil resources of 345 billion barrels, following ‘Top 10 Countries’ possess about 280 billion barrels.