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Shale-Oil Development Prospects: The Role of Shale-Gas in Developing Shale-Oil

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  • Douglas B. Reynolds

    (School of Management, University of Alaska Fairbanks, Fairbanks, AK 99775-6080, USA)

  • Maduabuchi Pascal Umekwe

    (School of Management, University of Alaska Fairbanks, Fairbanks, AK 99775-6080, USA)

Abstract

Currently, most of the world’s shale-oil is coming from the United States, but more may be needed from non-U.S. sources in order to keep the world price of oil from increasing, and yet a number of petroleum producing countries have yet to develop shale-oil resources. This article investigates why that may be. One reason for this may be the role that shale-gas development plays in the search for shale-oil. In the oil and natural gas industry over much of the 20th century, finding oil has usually been more valuable than finding natural gas because the gas has less energy density than oil, making each BTU (or Joule) of oil energy easier to store, transport and use for consumers. However, since shale source-rock often has both natural gas and oil, then it behooves a shale search process to start by looking for natural gas first rather than oil to enhance the profitability of the search process. The problem, then, is that a shale-oil only search strategy has the same problem that first plagued the oil and gas industry: What do you do with the natural gas? In this paper, we will examine how this “chicken and egg” exploration scenario has played out in the U.S. in order to draw lessons on how difficult shale-oil development will be for the rest of the world.

Suggested Citation

  • Douglas B. Reynolds & Maduabuchi Pascal Umekwe, 2019. "Shale-Oil Development Prospects: The Role of Shale-Gas in Developing Shale-Oil," Energies, MDPI, vol. 12(17), pages 1-21, August.
    • Handle: RePEc:gam:jeners:v:12:y:2019:i:17:p:3331-:d:262057
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    References listed on IDEAS

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    4. Jong-Hyun Kim & Yong-Gil Lee, 2020. "Progress of Technological Innovation of the United States’ Shale Petroleum Industry Based on Patent Data Association Rules," Sustainability, MDPI, vol. 12(16), pages 1-17, August.
    5. Xiaomeng Cao & Yuan Gao & Jingwei Cui & Shuangbiao Han & Lei Kang & Sha Song & Chengshan Wang, 2020. "Pore Characteristics of Lacustrine Shale Oil Reservoir in the Cretaceous Qingshankou Formation of the Songliao Basin, NE China," Energies, MDPI, vol. 13(8), pages 1-25, April.
    6. Heting Gao & Xinping Zhou & Zhigang Wen & Wen Guo & Weichao Tian & Shixiang Li & Yunpeng Fan & Yushu Luo, 2022. "Classification and Evaluation of Shale Oil Reservoirs of the Chang 7 1-2 Sub-Member in the Longdong Area," Energies, MDPI, vol. 15(15), pages 1-18, July.

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