Natural gas production worldwide is projected to increase from 342 billion cubic feet per day (Bcf/d) in 2015 to 554 Bcf/d by 2040. According to EIA findings, the largest component of this growth will come from shale resources which will account for up to 30% of global gas production.
By the end of the forecast period in 2040, gas gas production from shale resources is anticipated to grow from 42 Bcf/d in 2015 to 168 Bcf/d. Much of the growth in output will come from the US, followed by Canada, China, and Argentina. China is likely to source up to 40% of its gas demand from shale formations by 2040.
Technological improvements over the forecast period are expected to encourage development of shale resources in other countries, primarily in Mexico and Algeria. Together, the six shale gas producing countries are projected to account for 70% of global output by 2040.
In the United States, shale gas production accounted for more than half the country’s 2015 gas production and is projected to more than double from 37 Bcf/d last year to 79 Bcf/d by 2040, which would be 70% of total gas production. Several AEO2016 side cases illustrate the effect of technological improvements on cost and productivity. Shale gas production in 2040 is projected to be 50% higher under the High Oil and Gas Resources and Technology case, reaching 112 Bcf/d, while in the Low Oil and Gas Resources and Technology case, production is projected to be 50% lower than the Reference case, reaching 41 Bcf/d.
Canada has been producing shale gas since 2008, reaching 4.1 Bcf/d in 2015. Shale gas production in Canada is projected to continue increasing and to account for almost 30% of Canada's total natural gas production by 2040.
China, one of the first countries outside of North America to develop shale resources, has drilled more than 600 shale gas wells over the past five years and produced 0.5 Bcf/d of shale gas as of 2015. Shale gas is projected to account for more than 40% of the country's total natural gas production by 2040, which would make China the second-largest shale gas producer in the world after the US.
Commercial shale gas production in Argentina was just 0.07 Bcf/d at the end of 2015, but foreign investment in this sector is increasing. Pipeline infrastructure in Argentina might need to be expanded as production grows. If current shortages of specialized rigs and fracturing equipment can be resolved in a timely manner, shale production could account for almost 75% of Argentina's total gas production by 2040.
Algeria's production of both oil and gas has declined over the past decade, which prompted the government to begin revising investment laws to incentivise national oil companies (NOCs) to collaborate with international companies to develop shale resources. Algeria has begun a pilot shale gas well project and developed a 20-year investment plan to produce shale gas commercially by 2020. The government aims for shale production to account for one-third of total gas production by 2040.
Mexico is expected to gradually develop its shale resource basins after the recent opening of the upstream sector to foreign investors. At present, Mexico is expanding its pipeline capacity to import low-priced natural gas from the US. Commercial shale gas production in Mexico is expected to start after 2030, with shale volumes set to contribute more than 75% of total gas production by 2040.