In this blog post, we will focus on “The 21st-Century Energy Revolution Driven by the Shale Gas Boom and an Analysis of Its Impact on Korea.”
What Is Shale Gas?
Shale gas is natural gas found within shale layers. While conventional natural gas migrates to the surface and accumulates in specific locations after formation, shale gas is trapped within the shale layers, blocked by impermeable rock strata. Consequently, it exists at much greater depths than conventional natural gas and is dispersed in minute quantities between rock layers, making drilling extremely challenging. Due to these geographical and physical characteristics, economic production has only become possible recently with the advancement of technology.
To produce shale gas, a combination of horizontal drilling and hydraulic fracturing is used. First, a well is drilled vertically down to the target shale layer, then horizontally along the shale. Initial cracks are created in the rock layer using methods such as electric shocks, and a mixture of water, sand, and chemicals is injected at high pressure to create fine fractures extending hundreds of meters. The trapped natural gas then flows out through these fractures to the surface, where it is extracted.
Advantages and Limitations
Shale gas reserves are estimated to be comparable to those of oil, and because they are distributed relatively evenly across the globe with little regional concentration, the potential for energy monopolies is low. Power generation using gas is relatively efficient, resulting in lower carbon emissions compared to coal, and the shale industry can contribute to job creation and increased tax revenue. One energy consulting firm reported that the shale industry provided approximately 1.7 million jobs and generated $62 billion in state and federal tax revenue in 2012. Another advantage is that production costs are relatively lower compared to oil and natural gas.
However, shale gas also faces several limitations and controversies. The extraction process consumes large amounts of water, which can cause local water shortages, and there are concerns that chemicals in the fluid used for hydraulic fracturing could lead to groundwater contamination. Research also suggests that changes in underground pressure caused by hydraulic fracturing can trigger earthquakes through the repeated movement of faults. Furthermore, while emissions of pollutants during combustion are low, methane leaks into the atmosphere during extraction, transportation, and storage are a significant concern.
Despite these controversies, shale gas production is expected to continue expanding as participation from major corporations increases. In North America, particularly in the United States and Canada, the shale energy revolution has already become a reality. The United States has emerged as the world’s largest energy producer due to the surge in shale gas production, thereby strengthening its influence in the global energy market.
The shale gas development boom is also impacting international oil prices and the energy market. Some analyses suggest that increased U.S. oil production has boosted global oil supply, contributing to lower oil prices, which in turn has economic ripple effects on industries and consumers worldwide.
Although South Korea has limited domestic shale gas resources, Korean companies such as Korea Gas Corporation, SK Gas, and Korea Electric Power Corporation are entering the shale gas industry by participating in overseas development projects. While shale gas can provide economic benefits across various industries, it also carries risks related to environmental and safety issues, as well as shifts in the international geopolitical landscape.
In conclusion, shale gas holds immense potential for development. South Korea must comprehensively assess the changes in the energy market landscape and the geopolitical implications resulting from the rise of shale gas to establish a rational energy import system that enhances energy supply stability and improves the welfare of its citizens.
