What is shale gas? Shale gas is natural gas formed from being trapped within shale formations.

Shale gas is becoming an important source of natural gas in the world. U.S. government's Energy Information Administration predicts that by 2035 46% of the United States' natural gas supply will come from shale gas. China has the world's largest shale gas reserves followed by the United States and Argentine The shale revolution is likely to benefit USA and China while undermining Saudi Arabia and Russia The shale energy revolution is likely to shift the tectonic plates of global power in ways that are largely beneficial to the West and reinforce U.S. power and influence during the first half of this century. The real impact stems from its effect on the oil market. Shale gas offers the means to vastly increase the supply of fossil fuels for transportation, which will cut into the rising demand for oil fuelled in part by Chinas economic growth that has dominated energy policymaking over the last decade. Already, over half a million barrels of oil a day flowing from the Bakken field in North Dakota (USA) shale oil could be providing America with as much as six million barrels a day by 2020. The United States imported only 11 million barrels of crude oil a day in 2011. Given the potential for offshore and conventional domestic oil production, this would suggest that by 2020, America could be near energy independence in oil resulting in a sharp reduction in U.S. imports. This is likely to be reinforced by the development of shale oil resources in China, Argentina, Ukraine and other places, which will put additional pressure on global oil prices.

Shale revolution The outlook for Russia and Saudi Arabia seems bleak. As the decade progresses, shale will be developed worldwide and natural gas infrastructures will be constructed. It is difficult to see how the markets will avoid dropping oil prices. Geopolitically, the shale revolution strengthens the United States, reduces Chinas energy dependence, generates a major global stimulus, which takes the Western economies off the fiscal rocks, while potentially destabilising both the Russian Federation and Saudi Arabia. What is the process?