75%

is the extent to which a shale well is depleted in the first year of development.

This means that for commercial production of shale gas to take place, new wells must be constantly drilled. The economics of shale deposits is such that a new well pays for itself in the first 1.5-2 years of operation. Initial production provides a ‘normal profit’ that allows companies to continuously engage in new drilling.

These data are presented in a report by Nikolai Ivanov, head of ‘Energy Markets’ division at the Institute for Energy and Finance, called ‘The U.S. Shale Gas Revolution: Origins and Implications for World Markets and International Relations’, which he presented at a meeting of the HSE Geo-Energy Policy Club.