Unconventional Gas Market Trends

Unconventional Gas Market Drivers

Increasing Global Energy Demand

• The growing global energy demand, particularly in the developing world of China and India, is driving the unconventional gas industry. Tight gas and shale gas are vital sources of energy to satisfy increasing household and industrial demands. Governments are investing heavily in natural gas infrastructure as part of efforts to lower their reliance on coal, enhance energy security, and shift towards cleaner fuels, which is fueling the production and uptake of unconventional gas.

Government Support for Unconventional Gas

• Another significant driver of the market is government policies that support the production of unconventional gas. The United States is currently a world leader in shale gas and has enhanced energy security through policy reforms and incentives for shale gas production. This unconventional gas remains a crucial source of energy for nations looking to diversify their energy supply, courtesy of such policies that support investment and growth.

Unconventional Gas Market Restraints

Environmental Issues and Challenges

• The biggest hurdle for the production of unconventional gas, particularly hydraulic fracturing, is the environmental problem. Public sentiment and policy by regulators are impacted by issues concerning seismicity, high water demand, and pollution of water. For example, due to such environmental risks, fracking is banned in various parts of Europe. As the development of unconventional gas resources could be limited by tighter controls and opposition from the public, these issues could hinder advancement.

High Costs of Production

• Expansion is limited by capital and operating expenditures of unconventional gas production, including hydraulic fracturing and horizontal drilling. Financial hurdles are big for the technology-intensive nature of the processes, particularly for offshore operations, particularly for small-scale market players. The barrier to initial investment impacts profitability and scalability of unconventional gas businesses while technical progress reduces costs.