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Energy xxx (2013) 1e14

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Energy
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Unconventional gas e A review of regional and global resource


estimates
Christophe McGlade a, *, Jamie Speirs b, Steve Sorrell c
a
University College London (UCL) Energy Institute, Central House, 14 Upper Woburn Place, London WC1H 0NN, UK
b
Imperial Centre for Energy Policy and Technology, Imperial College London, South Kensington Campus, London SW7 2AZ, UK
c
Sussex Energy Group (SEG), SPRU (Science and Technology Policy Research), University of Sussex, Jubilee Building, Falmer, Brighton BN1 9QE, UK

a r t i c l e i n f o a b s t r a c t

Article history: It is increasingly claimed that the world is entering a golden age of gas, with the exploitation of un-
Received 29 October 2012 conventional resources expected to transform gas markets around the world. But the future development
Received in revised form of these resources is subject to multiple uncertainties, particularly with regard to the size and recov-
12 January 2013
erability of the physical resource. This paper assesses the currently available evidence on the size of
Accepted 25 January 2013
Available online xxx
unconventional gas resources at both the regional and global level. Focussing in particular on shale gas, it
rst explores the meaning and appropriate interpretation of the various terms and denitions used in
resource estimation and then summarises and compares the different regional and global estimates that
Keywords:
Unconventional gas
have been produced to date. It shows how these estimates have increased over time and highlights their
Shale gas variability, the wide range of uncertainty and the inadequate treatment of this uncertainty by most
Tight gas studies. The paper also addresses coal bed methane and tight gas and identies those estimates that
Coal bed methane appear to be most robust for each region. The paper concludes that unconventional gas could represent
Current estimates 40% of the remaining technically recoverable resource of natural gas, but the level of uncertainty is
extremely high and the economically recoverable resource could be substantially smaller.
2013 Elsevier Ltd. All rights reserved.

1. Introduction far from clear whether the expectations of huge and easily recov-
erable US resources will ultimately be fullled [3,4].
The development of unconventional gas resources is having an This growing interest in unconventional gas highlights the
increasing inuence on regional and global gas markets, most importance of establishing a robust evidence base against which
notably in the United States. But the future potential for uncon- claims of future gas abundance and protability can be reliably
ventional gas production remains unclear, with questions over the assessed. A key component of this evidence base must be the
size and recoverability of the physical resource being central to the estimation of the size and characteristics of the physical resource.
debate. Whilst estimates of unconventional gas resources in the This paper aims to contribute to the evidence base by summa-
United States remain uncertain, this is eclipsed by the much greater rising and extending the results of a comprehensive review of
uncertainty surrounding such resources in the rest of the world. published estimates of unconventional gas resources contained in
The growing interest in unconventional gas has been spurred by Ref. [5]. The methodology of this review was informed by the well-
recent experience in the United States, where production of shale established practice of systematic reviews and included exhaustive
gas increased ten-fold between 2006 and 2010. This remarkable searching of the available literature and reliance upon the more
development overturned expectations of a continuing decline in US rigorous studies when drawing conclusions [6]. While the review
gas production, sharply reduced US gas prices, led to an oversupply contains a short discussion of tight gas and coal bed methane re-
of liqueed natural gas on world markets and stimulated business sources, its focus was on estimates of shale gas resources: this
and policy interest in shale gas across the globe [1]. But while the paper signicantly extends this work by examining current esti-
development of shale gas could have far-reaching implications for mates of all three gas resources in a more balanced manner.
energy and climate policy, it is far from clear that the US experience The paper is structured as follows. Section 2 summarises the
can be reproduced in other countries and regions [2]. Similarly, it is different denitions used for unconventional gas resources and
identies the relationship between them, while Section 3 provides
* Corresponding author. an overview of the evidence base. Section 4 summarises and
E-mail address: christophe.mcglade.09@ucl.ac.uk (C. McGlade). compares the evidence for shale gas resources, both at the global

0360-5442/$ e see front matter 2013 Elsevier Ltd. All rights reserved.
http://dx.doi.org/10.1016/j.energy.2013.01.048

Please cite this article in press as: McGlade C, et al., Unconventional gas e A review of regional and global resource estimates, Energy (2013),
http://dx.doi.org/10.1016/j.energy.2013.01.048
2 C. McGlade et al. / Energy xxx (2013) 1e14

level and for individual regions, while Section 5 does the same for unspecied level of condence appear to be the norm. Clarity over
tight gas and coal bed methane. Section 6 identies those resource denitions and the associated assumptions is important, both to
estimates that appear to be most robust for each region and com- avoid confusion and to prevent estimates using different denitions
bines these to produce an aggregate global estimate. It then com- from being compared. Unfortunately, such clarity is largely absent
pares this with contemporary estimates of conventional gas from the existing literature.
resources and concludes that unconventional gas could increase One reason for the inconsistency and ambiguity in unconven-
the technically recoverable global gas resource by some 40%. tional gas resource estimates is the inappropriate use of terminol-
Finally, Section 6 emphasises the continuing uncertainty in ogy that was developed for conventional resources. For example,
resource estimates and assesses the implications. the (USGS (United States Geological Survey) uses the term undis-
covered to refer to resources postulated from geologic information
and theory to exist outside of known oil and gas elds [11]. But
2. Denitions
shale and tight gas exist in continuous formations, rather than
discrete elds, and the location and boundaries of such resources
Gas resources are commonly classied as unconventional on the
are frequently well-known (although the detailed nature of the
basis of the geological characteristics of the source rock, the tech-
geology may be unclear). Despite this, such resources are still
nologies required for production or some combination of the two.
referred to as undiscovered by many sources, with varying de-
For example, unconventional gas is commonly dened as gas
nitions of undiscovered being used. For example, the (Society of
contained in rocks with a low permeability (e.g. less than 0.1 mD),
Petroleum Engineers)
but other factors such as gas saturation, rock porosity and reservoir
SPE (Petroleum Resources Management System) PRMS indicates
pressure also inuence the technical and economic viability of
that discovered resources require collected data [that] establish[es]
production [7]. An alternative approach denes unconventional gas
the existence of a signicant quantity of potentially moveable hydro-
in terms of the required production technology, for example:
carbons. [12]. However, this does not allow one to distinguish be-
..natural gas that cannot be produced at economic ow rates nor tween resources classied as undiscovered under the USGS
in economic volumes unless the well is stimulated by a large hy- denition above, and resources in areas that are known but do not
draulic fracture treatment, a horizontal wellbore, or by using meet the PRMS requirement. Unless otherwise stated, the term
multilateral wellbores or some other technique to expose more of undiscovered in this paper refers only to gas that is estimated to
the reservoir to the wellbore. [7] exist outside of known formations.
Five key terms are used to distinguish different estimates of
This denition is problematic, however, since the classication
unconventional gas resources, namely: (original gas in place) OGIP,
of technologies as conventional or unconventional tends to
(ultimately recoverable resources) URR, (technically recoverable re-
change over time. For example, deep-water oil and gas was once
sources) TRR, (economically recoverable resources) ERR and reserves.
considered unconventional, but is now commonly classied as
A further set of denitions is used to distinguish between different
conventional.
types of reserve estimate based upon their relative probability of
Most sources identify three separate categories of unconven-
being produced. Brief descriptions of each category are given
tional gas, namely:
below, while our interpretation of the relationship between them is
summarised in Table 1 and Fig. 1. We emphasise, however, that
 Shale gas: gas trapped in ne grained sedimentary rock called
terminology is not standardised in this area: that different orga-
shale which requires hydraulic fracturing technology to be
nisations interpret and use these terms in different ways and that
produced.
no organisation provides separate estimates for all ve categories of
 Tight gas: gas trapped in relatively impermeable hard rock,
resource. At present, the range of uncertainty in the estimates of a
limestone or sandstone, sometimes with quantied limit of
single category of unconventional gas resources (e.g. URR) may
permeability.
frequently eclipse the difference between this and a related cate-
 CBM (coal bed methane): gas trapped in coal seams, adsorbed
gory (e.g. TRR).
in the solid matrix of the coal.
(Original gas in place) OGIP is the total volume of natural gas that
is estimated to be physically present in a given eld, play or region,
Some denitions also include resources in difcult geographical
prior to development. The percentage of this gas that is estimated
locations (e.g. the Arctic), in relatively small deposits (e.g. stranded
to be technically recoverable is a key variable in resource estimates
gas) or in very deep deposits (ultra-deep), together with more
and is commonly referred to as the recovery factor. Given the rela-
speculative resources that have yet to be exploited such as methane
tively early stage of development of unconventional gas resources,
hydrates [8,9]. But in this paper, we conne attention to shale gas,
recovery factors remain uncertain for all regions of the world.
tight gas and coal bed methane.
Moreover, these factors can vary widely both within and between
Unconventional gas resources may be estimated for individual
different geological formations and will change over time as tech-
wells, for geologically dened regions (plays)1 or for aggregate
nology improves.
regions such as individual countries. The estimates may refer to
(Ultimately recoverable resources) URR is the sum of all gas ex-
volumes of gas that are considered to be present, to be technically
pected to be produced from a well or region from when production
producible, or to be economically producible under various con-
begins to when it nally ends. Estimates of URR are commonly
ditions and assumptions that may or may not be made explicit.
understood to include discovered gas that is not economically
Such estimates should in principle be presented as a probability
producible at present but is expected to become so in the future.
distribution or to a specied level of condence (e.g. probable or
Estimates of URR for aggregate readings also include undiscovered
possible), but in practice single point estimates with an
gas that is expected to be both discovered and produced in the
future. In principle, therefore, this denition is sensitive to
1
assumption about future gas prices, technological developments
A geological play is dened as A set of known or postulated oil and gas ac-
cumulations sharing similar geologic, geographic, and temporal properties, such as
and discovery rates. An alternative term for URR is (Estimated Ul-
source rock, migration pathway, timing, trapping mechanism, and hydrocarbon timate Recovery) EUR, with the latter being more commonly used
type. [10]. to refer to a single well.

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Table 1
Interpretation of resource terminology.

Name Short description Includes gas in Includes gas not economically Includes gas that is not Includes gas that is not
undiscovered recoverable with current recoverable with current expected to become
formations technology technology recoverable
Original gas in place Total volume present U U U U
Ultimately recoverable Total volume recoverable U U U
resources over all time
Technically recoverable Recoverable with current U U
resources technology
Economically recoverable Economically recoverable U
resources with current technology
1P/2P/3P reserves Specic probability of
being produced

(Technically recoverable resources) TRR is the gas estimated to be of areas (mostly in North America) and these currently comprise
producible with current technology, ignoring economic constraints. only a small proportion of the estimated TRR.
The majority of regional estimates of TRR appear to include un- As may be expected, there are exceptions to the neat classi-
discovered resources, although there is ambiguity in some cases cation discussed above. For example, the (US Geological Survey)
[14]. There is also ambiguity regarding whether cumulative pro- USGS estimates a separate resource class for US shale plays, termed
duction is included in TRR estimates, but for most regions of the potential additions to reserves. This may be interpreted as techni-
world this makes little difference. If necessary, (Remaining Techni- cally recoverable resources minus the sum of undiscovered re-
cally Recoverable Resources) RTRR can be used to explicitly exclude sources, 2P reserves and cumulative production.2 Hence, to
cumulative production. construct an estimate of the TRR of the relevant play from the USGS
(Economically recoverable resources) ERR is a subset of TRR and data, it is necessary to add estimates of the latter three categories.
denes the resource that is estimated to be both technically and There is only one source explicitly reporting undiscovered re-
economically producible from a eld or region. Such estimates are sources e INTEK [13], which indicated that 1.2 (trillion cubic me-
sensitive to assumptions about technical and economic conditions, ters) Tcm in Southern California and 0.4 Tcm in the Rocky Mountain
including physical constraints such as land or water availability, and region had been estimated by the USGS. We have been unable to
may also be expected to change over time. Since at least some es- locate provenance of these gures however despite communication
timates of regional ERR include undiscovered resources [15e19], with the USGS. Also since the USGS does not provide undiscovered
we include them in our denition although the basis for making resources in this sense, it is not clear that this number was correctly
such estimates appears questionable. interpreted by INTEK. As a result, it appears that no explicit esti-
Reserves refer to a subset of discovered resources that are esti- mates of undiscovered shale gas (estimated to exist outside of
mated to have a specied probability of being produced. Reserve known formations) appear to have been made.
estimates are commonly quoted to three levels of condence, In what follows, to create a USGS estimate of the technically
namely proved reserves (1P), proved and probable reserves (2P) and recoverable resources for a play we rst construct an estimate of 2P
proved, probable and possible reserves (3P) although these terms are reserves for the relevant play by adding contemporaneous3 esti-
dened and interpreted in different ways by different organisa- mates of proved (1P) reserves to US EIA (Energy Information
tions. Under a probabilistic interpretation, 1P (or P90) reserves Administration) estimates of inferred reserves [14].4 We then add
represent an estimate that is considered to have a 90% probability contemporaneous estimates of cumulative production, along with
of being exceeded, 2P (P50) estimates have a 50% chance of being the USGS estimates of potential additions to reserves. This gure
exceeded, and 3P (P10) estimates a 10% chance. Unconventional gas can then be compared with TRR estimates from other sources.
resources are only classied as proved reserves in a limited number In summary, resource denitions are inconsistent, imprecise and
in need of standardisation. While this problem applies to all

2
Personal communication with USGS staff.
3
The USGS has published resource estimates for different US shale plays at
different times. For example, the most recent estimates for the Antrim shale date
from 2004. It would be incorrect to add current estimates of proved reserves to the
USGS gures, since volumes of gas that were not considered reserves when the
USGS made its assessment but are now included as reserves would be double
counted (i.e. they have moved from the USGS potential additions to reserves
category into the reserves category). A similar situation exists with cumulative
production. Hence, in constructing our USGS TRR estimates, we use data on proved
reserves and cumulative production that are contemporaneous with the date of the
relevant USGS assessment (e.g. 2004 in the case of the Antrim shale).
4
EIA estimates of inferred reserves are interpreted here as the difference be-
tween proved and probable reserves and proved reserves e i.e. 2P minus 1P. This
procedure is not without its problems. Statistically, it is only valid to arithmetically
sum reserve estimates if these correspond to mean estimates of recoverable re-
sources [20]. If 1P (P90) reserve estimates are arithmetically summed, the aggregate
gure is likely to underestimate total reserves, while if 3P (P10) reserve estimates
are summed, the aggregate gure is likely to overestimate total reserves [21]. Ag-
gregation of 2P reserve estimates should lead to smaller errors, but the magnitude
and sign of these errors will depend upon the difference between mean and median
estimates and hence the precise shape of the underlying probability distribution
(which is rarely available). In practice, aggregation of 1P estimates is more common,
Fig. 1. McKelvey box of resource classications for unconventional gas. thereby leading to underestimation of regional reserves.

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Fig. 2. Cumulative number of studies providing original estimates of country or regional level unconventional gas resources.

hydrocarbon resources, it appears particularly acute in the case of upon shale gas. One notable exception is the US EIA whose (Annual
unconventional gas, owing in part to the early stage of development Energy Outlook) AEO has provided estimates for all three resources
of the resource. At present, the most useful resource denition is in the US since 1997.6 Fig. 4 demonstrates that the AEO estimates
likely to be (technically recoverable resources) TRR, since this is the for US tight gas resources have increased by 40% between 1995 and
one most widely quoted and judgements about the economic 2010, those for CBM resources have increased by 138% and those for
viability of the majority of resources are likely to be premature. We shale gas by 900%. This upward trend illustrates how technical
therefore focus upon TRR estimates in the remainder of the paper. change, improved information and increased production experi-
The (economically recoverable resource) ERR for a region could be ence can substantially increase resource estimates over time.
substantially less than the TRR, but few studies estimate both and However, this process is not automatic e as illustrated by the major
there is little evidence on the typical relationship between the two. downward revision in the AEO shale gas estimates in 2010.
Given the very large uncertainty in all resource estimates, we may The following three sections summarise the available estimates
anticipate considerable overlap between different estimates of URR, of shale gas, tight gas and coal bed methane resources in more
TRR and ERR, despite the conceptual distinctions between them. detail.

3. Overview of the evidence base 4. Estimates of shale gas resources

The literature review sought to identify original estimates of Shale gas accounts for the bulk of the recent increase in un-
technically recoverable or economically recoverable resources for conventional gas production and has become the focus of intense
any of the unconventional gases for any country or region. An interest from business, policy makers and the wider public. Our
original estimate was dened as one from a source that had either review identied 62 studies that provide original global, regional or
developed the estimate itself using a recognised estimation national estimates of shale gas resources, the most recent of which
methodology,5 or adapted the estimate from other sources. are summarised in Table 2. All but one of these estimates is
Resource estimates were required to be different to qualify as conned to onshore shale gas, since the development of offshore
original, but they need not come from separate organisations e resources remains speculative at present [23].7 It is not always clear
indeed, several individuals and organisations have produced mul- whether the estimates include undiscovered resources, though this
tiple estimates at different points in time. can sometimes be identied by examining whether they identify
The evidence base on unconventional gas resources is small and specic plays and/or suggest the potential for future discovery. In
of relatively recent origin, but is growing rapidly (Fig. 2). The review most cases, estimates of discovered TRR are considered identical to
identied a total of 69 studies that provided original regional or full TRR.
country-level estimates, with 49 of these having been published
between January 2007 and our cut-off date of June 2012. The pri-
4.1. Estimates of global shale gas resources
mary motivation for these studies appears to have been the rapid
development of North American shale gas resources, with 56 of the
Ten separate studies provide estimates of global shale gas re-
69 reports providing resource estimates for the United States and/
sources, either in aggregate or broken down by region (Fig. 5).
or Canada (Fig. 3). The majority of these estimates derive from
These estimates range from a minimum of 7 Tcm to a maximum of
commercial sources and hence are not peer-reviewed (Fig. 3).
206 Tcm, with a mean of 100 Tcm. Each of the ten studies covers
Moreover, the majority of studies provide relatively little informa-
different countries and regions and none provides a truly global
tion on the underlying data and assumptions and provide single,
estimate since each excludes some potentially important regions.
point estimates rather than a range.
Relatively few studies provide resource estimates for all three
types of unconventional gas, with the majority focussing solely 6
The EIA reports include resource estimates for two years prior to publication. So
the 1997 report contained a resource estimate for 1995.
7
The exception is Poland [24], where the estimated offshore estimates of 0.11e0.
5
See McGlade et al. [5] for a review and evaluation of these methodologies. 15 Tcm are a fraction of the estimated onshore resources (0.23e0.62 Tcm).

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to an uncertainty of around 113.3 Tcm on a global scale. This ap-


proximates to one-third of the (Bundesanstalt fr Geo-
wissenschaften und Rohstoffe) BGRs estimate of the remaining
global technically recoverable resource of conventional gas
(433 Tcm), or 55% of global proved gas reserves (208 Tcm) [79].10 In
Fig. 5 we present Rogners estimates using both 15 and 40% re-
covery factors.
A 2010 report by the (World Energy Council) WEC provides
OGIP estimates for comparable regions to Rogner [45], but several
of these estimates are substantially different. For example, the WEC
estimate for Latin America is 80% lower than Rogners (10.6 Tcm),
that for Centrally Planned Asia & China is 90% lower (10.5 Tcm) and
that for the Former Soviet Union is 800% higher (153 Tcm). The WEC
estimates that nearly 40% of this endowment would be economically
recoverable, implying a global ERR of around 170 Tcm.
Fig. 3. Original estimates of unconventional gas resources, classied by region, source The 2011 ARI study [38] has become the new benchmark for
and gas type. Note: A number of studies provide estimates for more than one country global studies and suggests a global resource of 186 Tcm, which on a
or gas type. These are reported separately in each category, so the absolute numbers global level is comparable to applying a 40% recovery factor to
within each chart are not identical. Rogners OGIP estimate. ARI estimate that a full 52% of this resource
lies outside North America and China and Europe, but since the
exploitation of shale gas in its infancy in these regions, the quality
For example, (Advanced Resources International) ARI [38] ignored
of the relevant data is necessarily poor. ARI [55] produced an earlier
regions where there were large quantities of conventional gas re-
and much smaller estimate in 2009, but this analysis excluded
serves (Russia and the Middle East) or where there was insufcient
China and much of the rest of the world, as well as many European
geological information to carry out an assessment. Similarly,
plays (Fig. 5). The most recent estimates by Medlock [27] are based
Medlock et al. [35] only assessed the shale gas potential in six
upon ARI [38], although modied for some countries and regions,
countries8 outside North America and justied the exclusion of
and lead to a larger global total of 206 Tcm. The earlier assessment
non-assessed regions by suggesting that they are unlikely to
by Medlock et al. [35] was considerably smaller since the authors
contain economically recoverable resources. This implies that the
did not examine the resource potential of many countries included
available studies are likely to underestimate the global TRR,
in their later assessment, and because they discounted resources in
although the neglected resources may not contribute to global
China by a large degree due to water availability issues. Although
supply for several decades.
explicitly stated as being the TRR, the estimate was therefore more
The earliest and most cited global estimates are by Rogner [76]
likely to be the ERR.
(Table 3) who provided the following caveats:
Laherrre [81] and Sandrea [82] provide much lower estimates,
..resource estimates of unconventional gas are very sparse and but these should be given less weight since they were produced
primarily initiated by academic curiosity rather than by commer- before the recent increase in US production and appear to be pre-
cial necessity. Funds have been limited and therefore so are the dominantly based upon expert judgement.
data.....[The] data in the following tables are speculative and should
be read as such, particularly the regional distribution estimates,
which in many cases are highly speculative. [76] 4.2. Estimates of North American shale gas resources

Rogners shale gas estimates were produced using a relatively


North America is by far the best studied region with nearly 50
crude methodology and in the absence of any signicant drilling
studies providing original estimates of shale gas resources. Fig. 6
experience for any region of the world [76]. Rogner assumed that
illustrates the rapid increase in the US resource estimates over
the gas content of global shales was comparable to that estimated
the last six years, parallelling the equally rapid growth in US shale
for the United States, around 0.5 Tcm/Gt shale rock, but since
gas production. However, there is also considerable variation in
subsequent experience has demonstrated wide variations both
resource estimates, with a number of downward revisions since
within and between shale plays, the choice of a different analog
2010.
could have led to very different results [5]. Rogner also conned his
Fig. 7 summarises the 25 resource estimates published for the
estimates to OGIP and made no assumptions about likely recovery
United States since 2008, together with the 13 estimates published
factors. But several authors have subsequently applied recovery
for Canada. Some of these are updates of earlier estimates [39,40]
factors to Rogners gures, including 15% by Mohr and Evans [46],
but are reported here separately. Remarkably, only seven of these
10e35% by MIT [17], and 40% by ARI [55] and the IEA [77].9 For
studies (including the USGS) provide a range of uncertainty for
comparison, ARI [38] uses a range of 15e35% for the recovery of
their estimates, despite the limited production experience
shale gas from different geological areas, while recovery factors for
currently available, the substantial uncertainty associated with the
conventional gas can be as high as 80% [78].
estimation methodologies [5] and the clear disagreement between
Using Rogners OGIP estimates, a 15% recovery factor would lead
different studies. Even within this short time span, the most recent
to a global estimate of 68 Tcm for the TRR of shale gas, while a 40%
estimates are on average larger than those made in 2008. Overall,
recovery factor would increase this to 181.3 Tcm. Hence, the range
of 15e40% in the recoverable fraction of Rogners OGIP corresponds
10
The 2012 BP Statistical Review [80] estimates global proved reserves of
208 Tcm, corresponding to 48% of the BGR estimate of remaining technically
8
The nine countries analysed are: the United States, Canada, Mexico, Austria, recoverable resources. However, this gure includes all four resources (conven-
Germany, Poland, Sweden, China and Australia. tional, tight, CBM and shale) to differing degrees in different countries, depending
9
The IEA does not explicitly state the recovery factor used for each of the three upon their state of development. The split between these resources cannot be
unconventional gases, but provides gures from which it can be calculated. determined at the aggregate level.

Please cite this article in press as: McGlade C, et al., Unconventional gas e A review of regional and global resource estimates, Energy (2013),
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Fig. 4. Successive EIA estimates of remaining technically recoverable unconventional gas resources. Source: EIA [22]. The 1998 and 1997 AEOs provided estimates of remaining ERR
while all others provided estimates of remaining TRR.

Table 2
Studies published between 2009 and 2012 providing original estimates of regional shale gas resources.

Author/organisation Date of report Countries/regions covered Resource estimate


EIA (AEO) [25] Variousa US TRR (2012e1999) ERR (1998 & 1997)
Dai [26] Jun-12 China TRR
Medlock et al. [27] May-12 29 countries TRR and ERR
BGR [28] May-12 Germany OGIP and TRR
Jia et al. [29] Apr-12 China TRR
Chinese Ministry of Land Resources [30] Mar-12 China TRR
PGI [24] Mar-12 Poland TRR
USGSb Mar-12 US Potential to be added to reserves
BGR [8] Feb-12 Top 15 countries and other regions TRR
PEMEX [31] Jan-12 Mexico Prospective resources
USGS [32] Jan-12 India Potential to be added to reserves
Mohr & Evans [33] Sep-11 Continental regions URR
USGS [34] Aug-11 Uruguay Potential to be added to reserves
Medlock et al. [35] Jul-11 9 North American, European and Pacic countries TRRc
INTEK (for EIA) [13] Jul-11 US Unproved, undiscovered TRRd
ICF (Petak) [36] May-11 US. Canada ERRe
Advanced Resources International (Kuuskraa) [37] May-11 US TRR
ARI (for EIA) [38] Apr-11 32 individual countries worldwide OGIP and TRR
ICF (Henning) [39] Mar-11 US, Canada ERRd
ARI (Kuuskraa) [40] Jan-11 US TRR
Potential Gas Committee [41] Dec-10 US TRR
Caineng et al. [42] Dec-10 China OGIP
Medlock & Hartley [43] Oct-10 US, Canada TRR
ARI (Kuuskraa) [44] Oct-10 US TRR
World Energy Council [45] Sep-10 9 Continental regions OGIP
Mohr & Evans [46] Jul-10 US, Canada URR
MIT (Moniz) [47] Jun-10 US TRR
CSUR (Dawson) [48] May-10 Canada ERR
Skipper [49] Mar-10 US, Canada TRR
Hennings [50] Mar-10 US OGIP and TRR
ARI (Kuuskraa) [51] Mar-10 US, Canada TRR
Petrel Robertson Consulting [52] Mar-10 Canada OGIP
IHS CERA (Downey) [53] Jan-10 US, Canada TRR
DECC (Harvey and Gray) [54] Jan-10 UK TRR
ARI (Kuuskraa) [55] Dec-09 US, Canada, Poland, Sweden, Austria "Recoverable resources"
Potential Gas Committee [56] Jun-09 US TRR
Theal [57] May-09 US, Canada OGIP and TRR
ICF (reported by Ref. [17]) Mar-09 US TRR
IHS CERA [58] Feb-09 Europe TRR
Wood Mackenzie [59] Jan-09 Europe TRR
a
There have been a total of 16 Annual Energy Outlooks between 1997 and 2012. The AEO in 2003 used the same unconventional gas gures as 2002, while the 2011
estimate was based entirely on INTEK [13] and so is reported separately. There are therefore a total of 14 AEOs included in this row.
b
USGS estimate based on Whidden et al. [60], Houseknecht et al. [61], Coleman et al. [62], Dubiel et al. [63], Higley et al. [64], Houseknecht et al. [65], Anna [66], Schenk et al.
[67], Swezey et al. [68], Hettinger and Roberts [69], Finn and Johnson [70], Swezey et al. [71], Pollastro et al. [72] Higley et al. [73], Milici et al. [74] and USGS [75].
c
Medlock indicates that resources should be commercially viable so his denition, although described as technically recoverable resources, is in principle closer to ERR.
d
This report indicates that TRR can be derived from this through adding the EIA and INTEK gures for contemporaneous proved and inferred reserves, the gure given for
undiscovered resources, and unproved discovered technically recoverable resources, all of which are reported separately.
e
ICFs 2011 report [36] indicates that there is a total of 61.5 Tcm of economically recoverable resource in the US and Canada. It provides a supply cost curve indicating that
this volume is only recoverable at gas prices greater than $14/Mcf. Since this price is four times higher than current gas prices (around $3.5/Mcf on 15th December 2011), ICFs
estimates may be better interpreted as TRR.

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Fig. 5. Global estimates of shale gas resources. Note: Different studies cover different countries and regions and none provide a truly global estimate. Resource denitions also
differ; both in terms of what is reported and how this is dened and estimated (see Table 2). Most studies estimate TRR, but Laherrre states his estimate is URR and Medlock and
WEC provide ERR. Rogners OGIP estimates are converted to TRR using 15 and 40% recovery factors, while WECs OGIP estimate is converted to ERR using a 40% recovery factor.

the post-2008 US estimates range from 4.9 to 47 Tcm, with a mean 4.4. Estimates of Chinese shale gas resources
of 21 Tcm, while the corresponding Canadian estimates range from
1.5 to 28 Tcm, with a mean of 9.3 Tcm (Fig. 7). We identied twelve studies that provide original estimates of
Chinese shale gas resources, six of which were published in 2012.
The estimates are compared in Fig. 9 and range from 4.2 to 52.5 Tcm,
with a mean of 20 Tcm. The range indicated for Rogner [76] and
Caineng et al. [42] results from applying 15e40% recovery factors to
4.3. Estimates of European shale gas resources
their OGIP estimates. The WEC gure is for Centrally Planned Asia,
which also includes Cambodia, Hong Kong, North Korea, Laos,
We identied nine original estimates of European shale gas
Mongolia and Vietnam but for illustrative purposes we assign this
resources, all but one of which (Rogner) was published after 2008.
estimate to China. The earlier Medlock et al. [35] estimate is con-
These are presented in Fig. 8, and range from 2.3 to 19.8 Tcm, with
servative owing to assumed water constraints: the authors more
a mean of 10.6 Tcm. The difference between the ARI 2011 and
recent estimate [27] relies entirely upon the ARI (2011) estimate and
2009 estimates derives largely from the inclusion of a greater
is consequently much larger. The variation in currently available TRR
number of plays. The difference between the Medlock 2011 and
estimates for China is even larger than that for Europe and North
2012 estimates derives largely from the inclusion of ve additional
America.
countries in the latter gure as well as the adoption predomi-
nantly of the ARI 2011 estimates: the latter gure approximately
doubles the ARI (2011) [38] estimate for the UK (from 0.56 to 5. Estimates of tight gas and coal bed methane resources
1.16 Tcm) and more than triples the estimate for Germany (from
0.23 to 0.71 Tcm). If the evidence on shale gas resources is limited, the evidence on
tight gas and coal bed methane resources is much worse. Moreover,
the interpretation of this evidence is hampered by inconsistencies
Table 3
Rogners (1997) estimates of original shale gas in place in different regions.

Region Original shale gas


in place (Tcm)
North America 108.3
Latin America and the Caribbean 59.7
Western Europea 14.4
Central and Eastern Europeb 1.1
Former Soviet Union 17.7
Middle East & North Africa 71.8
Sub-Saharan Africa 7.7
Centrally Planned Asia & China 99.4
South Asia 65.2
Other Pacic Asia 8.8
Pacic OECD 0
Total 454.1
a
Western Europe is described as consisting of: Andorra, Austria, Azores, Belgium,
Canary Islands, Channel Islands, Cyprus, Denmark, Faeroe Islands, Finland, France, Fig. 6. US shale gas resource estimates and annual shale gas production. Source:
Germany, Gibraltar, Greece, Greenland, Iceland, Ireland, Isle of Man, Italy, Lichten- Production data from 1982 to 1989 taken from Slutz [83]; data from 1990 onwards
stein, Luxembourg, Madeira, Malta, Monaco, Netherlands, Norway, Portugal, Spain, taken from EIA AEO 2011. Graph includes both TRR and ERR resource estimates from all
Sweden, Switzerland, Turkey and the United Kingdom. sources. The USGS gure combines all of its latest resource assessments for shale plays
b
Central and Eastern Europe is described as consisting of: Albania, Bosnia and of various dates but is plotted for August 2011, the date of the most recent USGS
Herzegovina, Bulgaria, Croatia, Czech Republic, FYR Macedonia, Hungary, Poland, assessment of the Paradox basin [60]. See Section 2 for a discussion of how the USGS
Romania, Slovak Republic, Slovenia, and Yugoslavia. TRR estimates were compiled

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Fig. 7. Estimates made since 2008 of the technically recoverable shale gas resources in the United States (top) and Canada (bottom). Note: Points in green correspond to estimates
that were stated as referring to ERR. Some sources do not report a central estimate, only giving a range. WEC [45] is excluded since it does not distinguish between the US and
Canada. (For interpretation of the references to colour in this gure legend, the reader is referred to the web version of this article.)

in the relevant denitions. For both types of resource, the best data recoverable (implying a recovery factor of 6e10%). Similarly, BGR
is for the United States. [79] estimate a global TRR for tight gas of 46 Tcm, but neither source
provides any indication as to how these gures have been derived.
Estimates of North American tight gas resources are more
5.1. Tight gas
robust, but still occupy a wide range. Estimates of tight gas TRR in
the United States lie between 6.0 and 17.3 Tcm [40,47], with a mean
Kuuskraa and Meyers [85] provide an early estimate of 76e
of 11.8 Tcm. The recent USGS estimate [75] lies towards the lower
102 Tcm for tight gas in place globally, with 55e75% of this
end of this range (8.2 Tcm), while the most recent EIA estimate [23]
resource estimated to be contained in regions outside North
lies towards the higher end (14.5 Tcm). The EIA has been estimating
America. The latter gure (57 Tcm) derives from a 1979 study by
US tight gas resources since 1995, during which period the esti-
Meyer [86], but this appears to be based upon expert judgement
mates have grown by some 50% (Fig. 4). Current AEO tight gas
rather than a repeatable methodology [86]. Kuuskraa and Meyers
resource estimates are comparable to those for shale gas, but the
[85] estimate that the global TRR is 10e25 Tcm, thus suggesting a
former has received considerably less attention.
recovery factor between 10 and 30%.
Canadian tight gas resources appear to be of similar size to those
Rogner uses recent experience in the United States to argue that
in the US, with TRR estimates ranging from 6.5 to 14.5 Tcm [48]. TRR
Kuuskraa and Meyers estimate is excessively conservative. He cites
estimates for China range from 8.8 to 12.1 Tcm [29]. These more
a global OGIP estimate of 215 Tcm and allocates this to different
disaggregated gures for only three countries (the Unites States,
regions in proportion to the regional distribution of conventional
Canada and China) sum to around 32.5 Tcm if the mid-points of
gas resources. However, the source of this estimate is unclear.11
ranges are taken, which suggests that a global estimate around
Applying recovery factors of 10e30% leads to a global TRR of be-
50 Tcm such as given by BGR and Total may be conservative.
tween 21 and 65 Tcm.
Uncertainties over the quantities of tight gas in place are com-
For comparison, Total [87] suggests a global OGIP of between 310
pounded by uncertainties over the appropriate recovery factor.
and 510 Tcm, of which 20e50 Tcm is estimated to be technically
Totals estimates [87] imply a recovery factor of between 6 and 10%,
but the IEA appears to apply a recovery factor of 40% to Rogners
11
data [88]. The IEA does not justify this gure which is approxi-
Rogner suggests that the global OGIP estimates of Kuuskraa and Meyers [85]
range between 85 and 215 Tcm. As indicated above the range given in this paper
mately twice what it assumes for shale gas. Even larger gures are
is 76e102 Tcm, so the source of Rogners estimate of 215 Tcm, the gure utilised in assumed by ICF [89], who also adopt Rogners OGIP estimates, but
his report, is not clear. apply a 40% recovery factor in their low case scenario and 65% in

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Fig. 8. Estimates of technically recoverable resources shale resources in Europe. Note: WEC estimate (green) is stated as referring to economically recoverable resources. The range
for Rogners estimate is derived using a 15e40% recovery factor. Values for Wood Mackenzie and IHS CERA are from Weijermars et al. [84].

their high case. Similarly, Jia et al. [29] assume a recovery factor of 24 Tcm and BGR [28] who estimate 46 Tcm. Sandrea [82] provided a
around 50% for Chinese tight gas resources. global estimate of 16 Tcm, but did not disaggregate this and which,
The paucity of global estimates of tight gas resources derives in as with his estimate of shale gas resources, appears to be based
part from the limited production experience outside North Amer- upon expert judgement.
ica, and in part from inconsistencies in classication. BGR [8] now Both studies provide broadly similar estimates for different re-
classies tight gas as conventional gas and therefore excludes it gions, although it is unclear the extent to which they may rely upon
from assessments of unconventional resources. It is currently still each other. Kuuskraas [55] TRR estimate is 60% larger than an
more common to classify tight gas as unconventional, but overall earlier estimate by the same author published in 1998 [90], and
there is a clear need for a more careful examination of this resource. assumes a recovery factor of around 10e25% in each country.
The EIA has published annual estimates of US CBM resources
5.2. Coal bed methane since 1995, with the most recent TRR estimate being 141 Tcm. This is
approximately twice the 1995 estimate, with most of the increase
Coal bed methane resources are currently only produced on a occurring since 2007 (Fig. 4). CBM resources have not beneted from
major scale in the United States, Canada, Australia and China. There the same technological developments as shale gas resources, with
have been a total of seven estimates of the global CBM OGIP, three of the result that resource estimates have only increased relatively
which are by the same author (Kuuskraa [55,90,91]). The latest es- modestly. Country-level estimates of CBM TRR are also available for
timate of Kuuskraa and the four remaining estimates range from 84 China, Canada and Australia but these vary widely in transparency
to 377 Tcm. Most of these sources provide ranges of estimates of the and comprehensiveness. Chinas CBM TRR is estimated to be be-
OGIP in various countries or regions as shown in Fig.10. A huge range tween 3 and 12 Tcm [26,55], Canada between 0.6 and 3.6 Tcm
can be seen in a number of these countries particularly Canada and [47,48], and Australia between 3.4 and 5.7 Tcm [55,92]. As with shale
Russia, which vary between 5 e 121 Tcm and 13e113 Tcm respec- and tight gas, most studies give point TRR estimates rather than a
tively. Rogners estimate of the OGIP in Australia is also around a range, with Dai [26] and MIT [47], who provide ranges in China and
factor of ten larger than the estimates from the other four sources. the United States and Canada respectively, the only two exceptions.
Only two studies provide global, disaggregated estimates of To conclude, the evidence base for coal bed methane remains
CBM TRR, namely Kuuskraa [55] who estimates a total TRR of somewhat limited, equivocal, and with large bounds of uncertainty.

Fig. 9. Estimates of the technically recoverable shale gas resources in China. Note: WEC estimate (green) is stated as referring to economically recoverable resources. (For inter-
pretation of the references to colour in this gure legend, the reader is referred to the web version of this article.)

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Fig. 10. Ranges or point estimates of coal bed methane gas in place in ve countries from ve different sources. Note: The ves sources, in the same order for each country are:
Kuuskraa [55], BGR [93], Aluko [94], Murray [95], and Rogner [76]. Rogner only provides estimates for Australia and China.

6. Best estimates of unconventional gas resources estimates currently available of remaining technically recoverable
shale gas, tight gas and CBM resources in 15 global regions, and
The results presented in the preceding sections demonstrate the compares them to contemporary estimates of technically recover-
wide variations in unconventional gas resource estimates and able conventional gas resources for the same regions. The estimates
highlight the continuing uncertainty in this area. However, the are summarised in Table 4 while the rationale for their selection is
evidence base is improving, particularly for the United States, and indicated below (see also McGlade et al. [5]).
greater convergence in resource estimates may be expected in the Low, central and high estimates of technically recoverable shale
future. This section selects what we consider to be the most robust gas resource are given in Columns 5e7 of Table 4, while Column 8

Table 4
Estimates of the remaining technically recoverable resources of conventional, CBM, tight and the ranges resulting from choosing the most appropriate current estimates for
shale gas (Tcm).

Region Conventional Tight CBM Shale Basis of shale gas estimates

Low Central High


Africa 30.9 2.3 0.9 29.3 Algeria, Libya, Tunisia, and South Africa: [38]; Morocco: mean of [38] and [27]
Australia 5.1 4.3 4.5 11.2 [38]
Canada 8.8 10.5 2.3 3.6 12.0 28.3 High: [49]; Central: mean of [27,36,38,47,49,53]; Low: [48]
China 12.5 10.7 11.2 6.5 17.8 36.1 High: [38]; Central: mean of [8,26,30]; Low: Lowest value from Ref. [29]
CIS 181.2 5.4 11.4 11.6 Kaliningrad and Ukraine: [38]; Lithuania: mean of [27,38]; Russia: [8]
CSA 17.1 3.7 0.2 35.6 Bolivia, Brazil, Chile, Paraguay, Uruguay, and Venezuela: [38]; Colombia and
Argentina: mean of [27,38]
Europe 14.3 1.2 1.5 15.9 Poland: mean of [38] and average of max and min areas with central
EUR/well from Ref. [24] (557 Bcm); Austria: [27]; UK: mean of [27,38,54];
Germany: mean of [27,38], central estimate from Ref. [28]; Denmark,
France, Netherlands, Norway, Sweden, and Turkey: [38]
India 2.0 0.9 0.2 1.8 2.4 High: [27]; Central: [38]; Low: [32]
Japan 0.0 0.0 0.0 0.0 No sources report any shale gas to be present in Japan
Middle East 110.7 2.3 0.0 2.8 28.7 High: whole of Rogners [76] MENA region with 40% recovery factor;
Low: half of [45] MENA region (as assumed by Ref. [38]) with
15% recovery factor
Mexico 1.9 0.2 4.2 11.4 19.3 High: [38]; Central: mean of [27,38] and central of range of estimates
from Ref. [31] (8.6 Tcm); Low: low estimate from Ref. [31]
ODA 21.0 2.0 2.2 1.3 22.1 High: Rogner [76] Other Pacic Asia and Centrally Planned Asia
regions with 40% recovery factor minus best estimate of China from
above; Low: Other Pacic Asia only (as assume all of Rogners Central
Planned Asia is China) and assuming a 15% recovery factor. This is
similar to estimate for Pakistan only from Ref. [38]
South Korea 0.1 0.0 0.0 No sources report any shale gas to be present in South Korea
United States 27.1 11.8 4.0 13.8 19.3 47.4 High: highest estimate available e [36] (assumed to be TRR); Central:
mean of most suitable estimates e [25,27,37,75] (with shale plays added
that are not included in this summary); Low: lowest estimate available
since January 2010 : USGS [75]
Global 432.5 54.2 39.2 193.2 (Taking the mid-point of estimates for those regions for which there
is no central estimate)

Notes: CSA Central and South America, CIS Commonwealth of Independent States, ODA Other Developing Asia.

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choose as many probability distributions that are judged to be


appropriate, assume that all of these have equal weighting, and
combine them using statistical procedures [5]. Since not all the high
and low estimates are equally spread about the central estimate,
several of the distributions should be asymmetric.
Mean estimates of technically recoverable tight gas resources
are given in Column 3. The US estimates are the mean of the esti-
mates from Refs. [23,40,47,75], the Canadian estimates are the mid-
point of estimates from Ref. [48] and the Chinese estimates are the
mid-point of the estimates from Refs. [26,29]. The Australian esti-
mate is derived by subtracting the latter from Totals [87] estimate
for China and Australia combined, while Total is also the source of
the (Commonwealth of Independent States) CIS estimate. We are
forced to rely upon Rogner [76] for other regions, despite the ca-
veats indicated above. We apply a 10% recovery factor to Rogners
OGIP estimates, which is the upper end of the range given by Total
Fig. 11. Best estimates of remaining technically recoverable gas resources at the global
[87].
level. Corresponding estimates of technically recoverable CBM re-
sources are given in Column 4. Most of these are based on either
BGR [8] or Kuuskraa [55], or an average of the two. The exceptions
indicates their source. As described by McGlade et al. [5], most of are: Australia for which we also include in average the estimate
these estimates are based upon either the bottom-up evaluation of from Ref. [92]; Canada, where we also include in the average the
geological parameters or the extrapolation of historical production estimates from Refs. [47,48]; China, where we take the average of
experience. The latter approach is likely to provide more robust [26,29] only; and the US, where we include in the average the es-
results, but such estimates are only available for a limited number timates from Refs. [23,41,47,75].
of US shale plays where production is relatively advanced. More Finally, Column 2 provides estimates of remaining technically
recent estimates are also preferred, since estimates for individual recoverable conventional gas resources, based upon the remaining
regions have signicantly increased over time [22,37,38,40,44, potential data from BGR [79]. Although BGR have published more
51,55,85,90,96]. recent estimates [8], these are not used here since they combine
Table 4 provides low, central and high estimates for the shale gas conventional gas and tight gas within a single category.
resources of Canada, United States, China, India and Mexico. For A global total for shale gas resources can be derived by aggre-
other regions, either a single central estimate is provided, or high gating the central estimates and taking the mid-point of the range
and low estimates without a central estimate. For the ve regions where no central estimate is available. This can then be added to the
where all three estimates were available, the high estimate is on global totals for tight, CBM and conventional resources to arrive at an
average 250% of the central estimate, while the low estimate is 31% overall estimate of 720 Tcm for the remaining technically recover-
of the central. Even for these regions, there is no evidence for the able resource of natural gas. This comprises 432 Tcm of conventional
shape of the probability distribution over this range and no indi- gas (60%), 39 Tcm of coal bed methane (5%), 54 Tcm of tight gas (8%)
cation of how the high and low estimates should be interpreted and around 193 Tcm of shale gas (27%) (Fig. 11). Hence, this analysis
(e.g. as maxima and minima, or as 95th and 5th percentiles). Given suggests that unconventional resources may represent around 40%
this, a possible approach to using this information would be to of the remaining technically recoverable resource of natural gas. For

Fig. 12. Regional distribution of the best estimates of technically recoverable unconventional gas resources.

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comparison, global proved gas reserves currently total around despite their potential to hold signicant resources. Many studies
208 Tcm [97] (comparable to the estimated shale gas TRR). continue to place heavy reliance upon an old study by Rogner [76],
These resources are unevenly distributed around the globe despite the weakness of the methodology used and the highly
(Fig. 12). For example, using the central estimates, the United States speculative nature of the results.
holds around 10% of the global TRR of shale gas while Europe holds Generally speaking, the evidence on shale gas resources is larger
around 7%. The Middle East and (Former Soviet Union) FSU could and of better quality than that for tight gas and CBM. North
potentially hold signicantly larger resources, but to date these American estimates are by far the most reliable and experience in
have not been adequately assessed. this region provides a vivid demonstration of how estimates can
Shale gas forms around 27% of the estimated global total (and increase over time and become more robust once production
67% of the unconventional total), but forms a much larger propor- experience is available.
tion of the remaining TRR for individual regions. For example, shale Using the best estimates of technically recoverable resources in
gas is estimated to represent 36% of the remaining TRR of natural 15 regions, we estimate a global total of 39 Tcm of coal bed
gas in China, 48% in Europe and 63% in Central and South America. methane, 54 Tcm of tight gas and 193 Tcm of shale gas e or 286 Tcm
This suggests that the impact of shale gas is likely to be much overall. For comparison, the remaining technically recoverable re-
greater at the regional level than at the global level. sources of conventional gas sum to around 430 Tcm and proved gas
All these gures should be treated with considerable caution, reserves to 208 Tcm. This demonstrates that the unconventional
given the multiple uncertainties catalogued above. As an illustra- gas resource is potentially very large, but the range of uncertainty
tion, the high and low US shale gas estimates are 230 and 64% of the remains extremely wide and the extent to which these technically
central estimate respectively e and this is by far the best charac- recoverable resources will ultimately become economically recov-
terised resource. The relative neglect of key regions such as FSU erable is far from clear. The emerging US experience needs to be
could lead to an underestimate of global resources and future im- watched very closely to see if unconventional gas lives up to its
provements in technology and geological knowledge could early expectations.
contribute to an increase in resource estimates over time. At the
same time, the proportion of the resource that is economically Acknowledgements
feasible to extract could be substantially less. For example, recent
US experience suggests that shale gas plays are very heterogeneous, This paper is based on work funded by the Joint Research Centre
implying that assessments that assume uniform productivity across (JRC) of the European Commission (EC). An earlier version of this
the play are likely to have signicantly overestimated the recov- analysis formed part of a wider study undertaken by the JRC looking
erable resource [98e100]. Similarly, it is possible that the recov- at the potential market impacts of unconventional gas in the Eu-
erable resources from individual shale gas wells have been ropean Union [101].
overestimated, owing to the choice of an incorrect functional form
for the decline curve [3,5]. Taken together, these considerations References
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