The importance of shale gas-ification of oil

Everyone now knows what happened in the US’ natural-gas sector. Strong Henry Hub prices brought a costly, tricky method of gas extraction into the mainstream. Just a few years after US politicians and forecasters were fretting about dwindling reserves and firms rushed to build liquefied natural gas import terminals to capitalise on the inevitable rise in prices, hydraulic fracturing and horizontal drilling unleashed vast new supplies. Production costs tumbled as the drillers honed the technology. The US is now in an age of gas abundance.

It's time to stop stockpiling canned foods and ammunition, because a similar story is playing out in the oil world. From Brazil’s pre-salt deep-water play to Canada’s oil sands to the Bakken of North Dakota, peak-oil theories are being demolished, well by well, barrel by barrel. A study by Harvard University’s Belfer Center says the world is entering an era of “unprecedented” growth in global oil supply. Within a decade, says the study, global output capacity will reach more than 110 million barrels a day (b/d), if not much more. Just as the US shale-gas revolution has begun to spread across the world so, too, will the revolution under way in North America’s oil sector reach other shores. It