Demand for Alternative Energy Sources Support Global Market for Unconventional Gas

Unconventional gas, or natural gas is a hydrocarbon gas formed from the burying of dead plants and animals over thousands of years ago. The intense heat and pressure cause by the decomposition of these materials triggers a reaction, which leads to the creating on natural gas, primarily methane.  As the technology evolves and economies change, fresh resources of unconventional gas such as shale gas, tight gas, coal bed methane, and methane hydrates are being found. These sources of unconventional gas are expected to bridge the gap between domestic production and consumption across all countries. Their key advantage is that they are environment friendly than its counter-parts, which has increased their uptake in recent years. However, the greater environmental challenge lies in their production. According to Transparency Market Research, the global market for unconventional gas stood at US$93.9 bn in 2012 and is estimated to reach a valuation of US$126.9 bn by 2019, exhibiting a healthy CAGR of 4.70% during the forecast period of 2013 to 2019.

What are the prominent factors driving the global market for unconventional gas?

With depleting conventional gas resources and increasing dependency on energy for various purposes, the focus towards unconventional gas is gaining momentum. Foreign investments by prominent players in Asian oil and gas market to acquire unconventional gas assets is further fueling the market growth, besides strict regulatory in several countries against pollution cause by conventional gas.

However, excessive utilization and contamination of surface water and high cost of production are seen as two of the primary restraints for the global market for unconventional gas.

What segments are projecting promising growth rates?

Currently, the segment of tight gas is most commonly produced, and accounted for 44.4% of the total global unconventional gas production in 2012. However, the production and sale of shale gas are expected to pick up pace due to technological developments in the extraction and transportation processes. Detection efforts have indicated that there is an abundance of shale gas reserves across the globe. Shale gas is expected to account for more than 47% of the global market for unconventional gas by 2019.

By application, the global market for unconventional gas can be categorized into power generation, industrial, residential, commercial, and transportation. Industrial applications of shale gas were most prominent in Canada in 2012. In the same year, production of unconventional gases for power generation accounted for 31% of the global market. As far as revenue is concerned, transportation industry is projected to rise at growth rate of 6.7% from 2013 to 2019. Residential application of unconventional gas includes space heating and cooling and water heating. The report also observes that residential application will surge and is expected to account for over 18% of the global market by 2019. Moreover, the use of compressed natural gas (CNG) as a transport fuel is gaining popularity as it is a cleaner source amongst all the other alternatives such as gasoline and diesel.

What geographical regions are prominent producers and consumers of unconventional gas?

Presently, over 60% of the coalbed methane (CBM) is produced by North America alone. However, emerging economies in Asia Pacific are investing heavily in CBM production and hence are expected to contribute a significant chunk of the market in the near future. Australia is expected to remain as one of the premier CBM producers by 2019.


Extraction of unconventional gas may be difficult and costly but the ever-growing requirement for energy needs a sustainable solution, which will most likely be offered by focus on usage of unconventional gas.


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