From Boom to Bust? A Critical Look at US Shale Gas Projections

26 Pages Posted: 29 Jan 2014

See all articles by Philipp M. Richter

Philipp M. Richter

Dresden University of Technology - Faculty of Economics and Business Management; German Institute for Economic Research (DIW Berlin)

Date Written: Novermber 2013

Abstract

US shale gas production is generally expected to continue its fast rise. However, a cautious evaluation is needed. Shale gas resource estimates are potentially overoptimistic and it is uncertain to which extent they can be produced economically. Moreover, the adverse environmental effects of ever more wells to be drilled may lead to a fall in public acceptance and a strengthening of regulation. The objective of this paper is hence twofold: providing a critical look at current US shale gas projections, and investigating in a second step the implications of a less optimistic development by means of numerical simulation. In a world of declining US shale gas production after 2015, natural gas consumption outside the USA is reduced from its reference path by at least as much as US consumption. Trade flows are redirected, and the current US debate on LNG export capacity requirements becomes obsolete.

Keywords: Natural Gas, Shale, USA, Scenarios, Equilibrium Modeling

JEL Classification: Q37, L71, Q41, Q33, C61, Q53

Suggested Citation

Richter, Philipp M., From Boom to Bust? A Critical Look at US Shale Gas Projections (Novermber 2013). DIW Berlin Discussion Paper No. 1338, Available at SSRN: https://ssrn.com/abstract=2387421 or http://dx.doi.org/10.2139/ssrn.2387421

Philipp M. Richter (Contact Author)

Dresden University of Technology - Faculty of Economics and Business Management ( email )

Mommsenstrasse 13
Dresden, D-01062
Germany

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

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