1. Light Tight Oil and Unconventional Gas:
‘Golden Rules’ to Stay On-track
Maria van der Hoeven
Executive Director
International Energy Agency
Houston, August 2012
© OECD/IEA 2011

2. Deglobalization of gas markets
Avg. gap in 2011:
USD 5.8/MBtu
Avg. gap in 2011
USD 5.0 /MBtu
Source: ICE, EIA, IEA, German Customs, Japanese Customs, McCloskey
© OECD/IEA 2011

3. Global gas resources represent 250 years of
current gas production
 Natural gas can enhance security of supply: global resources
exceed 250 years of current production
 Thanks to unconventional gas, gas resources are more
homogenously spread between regions © OECD/IEA 2011

4. Light Tight Oil (LTO) Stops US Output Decline,
Cuts Imports
kb/d US Liquids Forecast (2011-16) PADD 2 Imports
12,000 2000
US - GOM Total PADD 2 Imports
10,000 US - Other Other Countries
Lower 48 1500 Canada
8,000 US - Texas
6,000 US - California 1000
4,000 US - Alaska
500
US - Other
2,000
US - NGL 0
0
1994 1997 2000 2003 2006 2009 2012
MTOGM Jun-11
 Companies employing horizontal drilling, hydraulic fracturing
to target liquids-rich shales.
 Expect LTO to grow by 1.1 mb/d by 2016
 NGL supply revised up because producers are targeting
liquids-rich gas plays and light tight oil plays.
© OECD/IEA 2011
Source: IEA Oil Market Report 4

5. Rolling back shale gas production would lead to
a less secure and less sustainable energy system
Selected natural gas trade volumes, 2035
Net imports Net exports
Golden Rules Case
China
Additional net trade in
European Union Low Unconventional Case
United States & Canada
Middle East
Russia
-600 -400 -200 0 200 400 600
bcm
Gas trade in the Low Unconventional Case is up 30%, some trade patterns are reversed,
gas prices are higher & the position of the main conventional exporters reinforced
© OECD/IEA 2011

6. Hydraulic fracturing can be done safely, but ‘golden
rules’ are essential to maintain social acceptance
© OECD/IEA 2011

7. Light Tight Oil and Unconventional Gas:
‘Golden Rules’ to Stay On-track
Maria van der Hoeven
Executive Director
International Energy Agency
Houston, August 2012
© OECD/IEA 2011