The US is in the midst of an oil boom. Shale gas has grabbed much attention, and rightly so. But it is shale oil (a light, crude oil found in shale or tight sandstone, and also known also as tight oil) that could more radically redraw the geopolitical map. What factors might determine this?

There are global alternatives to natural gas (coal, nuclear, renewables) in its key area of growth, power generation. But there are none for oil. This is changing, but it will take time.

So if tight oil development spreads to other nations in the next 10-15 years, we could see big changes. Import needs for consuming centers — the US, China, the EU, India — could fall significantly, and thus so would the power of petrostates like Russia, Iran, and Venezuela.

The geological uncertainties

But there are uncertainties. Some relate to geology. Tight oil resides in rock with oil-bearing pores that are unconnected. Fracturing connects the pores and creates pathways for it to flow to the well. Shale is only one type of rock where this works. It can work especially well, because shales are primary source rocks for petroleum and thus can contain much oil. Fracking, however, has limits.

Fracked wells decline rapidly. Oil directly contacted by the larger, more open fractures flows first to the wellbore and is quickly produced. Thereafter, oil further out in the fracture network leaks more slowly to the well.

Shale wells can go from 1,000 to 100 barrels per day or less in the first year, then to 30-50 barrels in another two years, as decline slows.

These wells pay for themselves in that first year, but to keep production high, more wells must be constantly drilled. In some shales, this is changing, as new techniques succeed in reducing early decline. Still, depending on rules about well spacing, many thousands of new wells might result. That means production will rise for perhaps a decade, reach a brief plateau, and then fall.

Decline might be mitigated by enhanced recovery and by re-fracking. But because shale oil drilling is so new, these approaches are not yet in regular use and define a frontier.

Different shales need different approaches

Another limit comes from the shale itself. The ideal shale has:

• significant silt or sand, making it brittle (it fracks)
• high organic content (lots of oil)
• good porosity (storage).

It also has to be mature enough – subjected to sufficiently high temperatures and pressures – to have generated petroleum from its organic matter.

These key factors often vary even between nearby locations. This means fracking methods must be adjusted. It also means shales in other nations, for which there is less data, will require a period of trial-and-error before effective fracking methods are found.

These levels of initial risk will put off many companies. A good deal of science must be done, and this costs money.

There are other hurdles too: exploration can be slowed by lack of needed equipment and experienced crews, higher costs of drilling, and uncertain government policy. Big companies such as Chevron have the cash and, in fact, are working on shale oil exploration in several countries. But it’s unclear if they will stay the course. No major discoveries have yet been announced.

Huge rewards

Yet the rewards could be vast. Consider the US. From 1986 to 2008, production fell from 9 to 4 million barrels per day (Mb/d)—then leaped to 7.5 Mb/d by mid-2013, mainly due to just three shale formations (Bakken in North Dakota, Eagle Ford in south Texas, Spraberry in west Texas).

Such a jump hasn’t been seen in nearly a century, since the early days of the industry. In less than five years, it doubled US proven reserves, to 43 billion barrels. Forecasts by the Energy Information Administration (EIA) show a minimum scenario where output rises to about 7.8 Mb/d by 2015 and then declines, but a high resource case where numbers reach 10 Mb/d by 2025 and don’t fall. This is the level of Russia and Saudi Arabia, the largest exporters.

What about the rest of the world? In 2011 and again in 2013, the EIA had reports prepared by Advanced Resources International (ARI) on global shale resources.

The 2013 study doubled the number of shales studied, from 69 to 137 and found, strikingly, that technically recoverable resources — oil likely recoverable with today’s technology, regardless of costs — jumped by an order of magnitude, from 32 to 345 billion barrels (Bb). The top six countries are: Russia 75 Bb; US 58; China 32; Argentina 27; Libya 26; and Australia 18.

Australia’s current proven reserves are around 3.5-4 Bb (total petroleum liquids) and its imports have grown rapidly to over 50% of total consumption.

Still, the shale oil boom hasn’t helped the peak oil “theory” very much. Believers assure us the peak came in 2005. Yet not only is the world well-supplied: global production has continued to climb, despite Arab Spring interruptions.

True, prices have risen to $100/b. But this has proven to be affordable (have we stopped driving yet?). Given that OPEC withholds production, it is an artificially high price in any case.

Fracking fears could stop shale oil spread

So what are the chances of a shale boom or bang outside the US? At this moment, they seem moderate to good. Opposition to fracking, however, could prove a wildcard factor.

The technology has been overlain with much fear and anecdotal ugliness. France and parts of Britain have banned it outright. The fact of one million fracked wells since the 1970s, however, plus some recent studies, confirm that fears have been overblown, though illegal disposal of waste water and poorly completed wells, leading to some aquifer contamination, has occurred.

Other new data show that claims about methane leaks from fracked wells being large enough to negate any carbon savings by switching from coal to gas are unsupported.

The biggest problem for fracking, besides its high water demands and possibility of re-activating geologic faults, is its reality as a massive industrial process. This makes it not only liable to occasional flaws and failures if not closely monitored, but decidedly ill-suited to well-populated areas and problematic in places unused to oil or gas activity.

Even so, shale oil — and tight oil more generally – will remain attractive to many nations. If the US were to become a major exporter, it would help supply the EU, Japan, and Korea, reducing these allies’ dependence on OPEC and Russia. It would also reduce the need for a pipeline like the Keystone XL, a source of major controversy in the U.S. as it would transport tar sands oil from Canada.

Tight oil development in Europe, China, Argentina, and Australia would increase energy security for these states, and for the globe.

Could it be, then, that today’s importers might one day discuss how much economic damage to allow in nations that formerly seemed to hold the world hostage for oil?