With shale oil and natural gas recoveries in various parts of the world, the future of the oil economy is already starting to change. According to the 2010 World Energy Outlook by the International Energy Agency, the world shale oil resources may be equivalent of more than 5 trillion barrels of oil of which more than 1 trillion barrels may be technically recoverable. In comparison, the world's proven conventional oil reserves are estimated to be at 1.3 trillion barrels. This means that the quantity of economically recoverable shale oil is almost equal to the amount of oil. But, the major difference is that majority of the world's shale oil deposits are in USA. In fact, the top 6 shale oil deposits discovered till date are all in the US.
On the other hand shale gas, a natural gas which is extracted from shale rock formations, prices has crashed in the US due to excessive supply. In July, the supply is going to exceed the demand and storage capacity put together. This may mean a further crash in prices. That is why the import terminals in the US have applied for converting to export oriented ones. US has the 2nd largest shale gas reserves, after China which has the highest. Gas price in US is currently in about $2.5 per million British thermal units (mBtu). The latest figures from the U.S. Energy Information Agency (EIA) indicate that natural gas supply could exceed demand by 2016, enabling North America to become a net exporter of LNG. In India, domestic gas is sold between a price range of $4.2 and $5.65 per mBtu. Imported gas is sold for $13-14 per mBtu. The landed cost for US imported gas is likely to be much cheaper than the current rates.
Politically, US may start losing its interest in Middle Eastern politics and become a dominant energy exporter themselves. Also, this will mean that the concept of "peak oil" that was first propagated in the 1970s will lose its relevance.
From an Indian perspective, it makes sense to start building infrastructure for LNG on a larger scale. Building cars, filling stations, LNG terminals and storage tanks to power plants which run on LNG are needed. All this would take time and we should take up this challenege. Dr. manmohan Singh has expressed his desire to focus on the infrastucture sector. I would hope that this takes a high priority on his agenda, for the sake of India's future.