Shale Gas


Shale gas is a form of "unconventional" natural gas. It is not easily extracted from the depths at which it is found. In fact its deposits are normally buried 15,000 feet or more underground. Special procedures that involve more than just drilling and simple extraction processes are needed to reach the gas, which is extracted by a combination of horizontal drilling and hydraulic fracturing (otherwise known as "fracking") of the sedimentary shale in which the natural gas is entrapped. These two processes have made possible the economical extraction of massive amounts of shale gas that it otherwise would not have been feasible to obtain.

Shale Gas Deposits

(click image to enlarge)
US Shale Gas and Oil Plays, Lower 48 States, 2016
Source: EIA Maps

Two types of gas can be found in shale deposits. Methane, also known as "dry" natural gas, is priced in dollars per million BTUs (British Thermal Units) like conventional natural gas. "Wet" natural gas, or NGL, contains natural gas liquids like propane, butane, iso-butane and ethane. NGL pricing tends to follow crude oil prices, and like oil is priced by the barrel.

Hydraulic Fracturing

Shale gas is most economically extracted by a process known as "hydraulic fracturing" (aka "fracking"). However, several major controversies surround the fracking process.

  • Large amounts of fresh water, which must be either specially reprocessed or stored in disposal wells, are required. Much of that water remains lost underground, but great care must be taken to prevent environmental damage from water flowing back from a well.
  • Well water in the vicinity of drilling rigs has been known to contain high amounts of methane, presumed to be the result of fracking.
  • A mix of chemicals - some of them toxic - is injected into each well. Critics have accused the process of contaminating drinking water wells and fouling the air in areas where fracking is done.
  • Critics argue that state regulations of the process are inadequate. The EPA is now studying the process to determine whether federal regulation is needed.