Swaminathan S. Anklesaria Aiyar I have always admired the man who writes Swaminomics in Times of India’s Sunday edition, for his insights, ideas, apt solutions and his amazing style in which he grips the reader. In the following article Swami talks about Mr. Mukesh Ambami’s decision to go for shale gas reserves in USA while Mr. Anil Agarwal bids for Cairn India. He says shale gas is fuel of future,
Oil is found only in a few places, and is concentrated in the Middle East. But shale is among the most common sedimentary rocks globally. In the US shale gas has within a decade increased US gas reserves from 30 years of consumption to 100 years. Vast stretches of Europe and Asia have shale deposits. China believes it has 45,000 billion cubic metres of shale gas, more than Russia’s entire proven gas reserves.
Mukesh is following a learning-bydoing strategy in shale gas. His American investments will give him handson experience and knowhow in “fracking” , the special technology used for shale gas drilling. Once he masters this, he will be well placed to outbid all rivals when the Indian government opens up shale gas blocks for exploration in the near future.
While explaining potential of shale gas Swami notes there is gas glut and it is here to stay.
But in less than a decade, abundant shale gas will drag down the price of oil.
onshore drilling for shale gas is cheap, and can be economic even if gas falls to just $3/mmbtu, the historical equivalent of oil at $20/barrel.