Shale Gas Front and Center in India
The government of India is planning to develop shale gas. Estimates of shale gas reserves are not known but they are thought to be large. The government is establishing policy guidelines for shale gas exploration. By 2012, India expects to begin offering exploration acreage. The immediate challenge is to locate prospective areas. This requires testing of rock types and conducting geophysical surveys. Once prospective areas are identified, it will be necessary to draft environmental regulations.
The Gerson Lehrman Group performed an anlysis the into the future and concluded that the existing oil and gas reserves in India are inadequate for the needs of a rapidly expanding industrial economy. That goes part of the way to explain why Indian companies are taking interests in shale gas regions in North America such as the Eagle Ford shale with Pioneer Natural Resources and Quicksilver Resources in Canada's Horn River basin.
India joins China as well as the European Union in an effort to control domestic natural gas resources to counter price pressure from liquefied natural gas (LNG) producers in the Persian Gulf, Trinidad, the Far East and Northwest Australia's shelf region. Even without the international financial crisis which shows few signs of abatement, natural gas has the advantage of both price and environmental desirability. All of the evidence that is available today indicates that shale gas deposits exist all over the world and the reservoirs are as good as those found in the U.S. This means an extraordinary supply of a cheap fuel.
Demand for natural gas as a transportation fuel increases steadily with much of South East Asia focused on it. Given these fundamental drivers, the Indian decision to move forward appears to be well-founded.
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