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Shale Gas and Hydraulic Fracturing: Risk and Opportunity Analysis for Oil and Gas Companies, Investors and The Future Energy Sector – Lessons from the US

The present Masters (MEng) thesis aims to analyse both qualitatively and quantitatively, the risks and opportunities arising from shale gas development in the US. The thesis draws upon multiple studies in order to identify the most prominent shale development impacts and most pressing risks. Through the literature review and Scopus database analysis, the thesis illustrates both the exponential rise in shale gas related research in the past few years and the fact that academic research has yet to catch up with the numerous challenges this industry poses.

Next, risks are quantified at the company level, regional level and US wide level. A case study on shale gas development in Pennsylvania (PA) is illustrated through production, wastewater and shale operator violations statistics. The study further shows that the number of unconventional well permits has surpassed those awarded for conventional oil and gas development and in addition, shale gas production volumes are 7 times higher than conventional gas production volumes. On the other hand, the cumulative unconventional wastewater volumes in PA have been 6 times larger than wastewater coming from conventional oil and gas activities. On average, the wastewater per gas produced ratio in unconventional wells is lower than conventional ones.

Shale gas production and water risk statistics are extrapolated at the US wide level based on industry datasets and the case study built on Pennsylvania. Shale gas operator risks are quantified using production, wastewater and violations metrics, together with company ESG scores. Last but not least, the thesis presents an outlook of shale gas development around the world together with different global shale gas estimation approaches.