Shale gas

The potential to extract shale gas through fracking has doubled estimated global gas reserves and is improving energy security. An increase of shale gas production has reduced energy prices, benefitting global economic growth. Shale gas is the least carbon-intensive fossil fuel and remains an important bridging fuel as lower-carbon energy sources are established.

Shale gas

Nevertheless, fracking also raises specific local environmental and social concerns.

  • Frackingmay result in depleted and contaminated water supplies, disruption to local communities and earth tremors.
  • Shale gas can reduce total CO2 emissions by replacing more carbon-intensive fuels, but this benefit could be reduced or even eliminated by methane leakage.
  • Fracking may impede growth of renewable energy.
  • Increased energy security in the US would have major geo-political implications.

Our conclusions

Many of the implications are still unconfirmed and await the outcomes of current independent research, including the potential impact of methane leakage. We believe, however, that prudent industry practices can manage many risks without significantly adding to costs. A cautious approach is therefore essential. This requires due diligence on well construction, water handling, community engagement and other key issues as well as transparency in offer documents for capital market transactions.
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