J.P. Morgan recently released a study addressing the current state of the oil and gas sector from an investment perspective. The study revealed that America has 8,000 trillion cubic feet of natural gas, and highlighted the developments that have been made throughout the U.S. shale gas industry, as well as those that are still to come. About 25 percent of J.P. Morgan’s resource estimate is economically recoverable at this time.  However, as technology continues to improve, that percentage will increase.

 

There is a growing recognition that the emergence of shale gas in the U.S. as a cost competitive option to foreign oil has and will continue to change the international gas landscape. Major energy companies are adding natural gas to their portfolios and have even extended the production rights acquisition to European countries -- not wanting to miss out as they did in the early stages of drilling in the U.S.

This shale renaissance is due, not only to the new reality of abundance, but to the advent of safe, new technologies such as horizontal drilling and high-pressure, multi-stage fracking.  These advances allow gas to be produced economically from deep shales that were previously uneconomic. And, as the practice of drilling shale gas continues, the cost of production is expected to drop even lower.

 

The enormous success of shale gas in the U.S. has led to major consequences across the global market.  For example, currently, Eastern and Central Europe is highly dependent one supplier, i.e., Russia.  The potential for gas from shale in Poland, Ukraine and other European countries will help increase the security of gas supply all across the continent.