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Prospects for shale gas development in Asia: examining potentials and challenges in China and India

Between now and 2035, global energy consumption is forecast to grow by 50 percent, and China and India together will account for more than half of this global growth. The scale of their energy consumption affects global supply and demand and, inherently, the price levels of various energy commodities – including natural gas – in the global marketplace.

As this report argues, the development of unconventional gas resources, especially shale gas, in China and India warrants close observation because of a host of potential economic and energy security benefits successful development may bring for the two growing economies.

However,  a host of “above-ground” conditions are essential in fostering the successful development of these resources.  North American experience suggets these conditions include access to shale gas resources on private lands, economically attractive natural gas prices, innovative operational and technological step changes that
combine hydraulic fracturing (fracking) with extended-reach lateral wells, an evolving under-standing of how shale formations react to stimulation, and availability of infrastructure to process and transport the gas.

Emerging investments into North American shale basins suggest that Chinese and Indian interests in exploring the potential of their unconventional gas resources, especially shale gas, are real. China and India would benefit from the availability of reliable data and processing capability. Additionally, both countries have yet to fully formulate policy frameworks concerning regulatory and physical infrastructure, pricing mechanisms, and environmental and resource management as well as issues associated with societal challenges that may accompany a large-scale development of their unconventional gas resources.