Fracking puts U.S. first in shale gas production

The United States, followed by Canada, leads the world in producing natural gas from shale formations as the controversial practice of fracking spreads, the U.S. government reports Wednesday.

Shale gas accounted for 39% of all natural gas produced last year in the United States, compared to 15% of that in Canada and less than 1% in China, according to data from the Energy Information Administration, the statistical arm of the Department of Energy.

"There's no commercially-viable shale gas production outside the United States and Canada," although about a dozen other countries have done exploratory testing, says Aloulou Fawzi, an EIA industry economist. He says China's production, as estimated by independent Chinese energy analysts, is quite small in comparison.

The main reason for the recent U.S. boom in natural gas production -- up more than a third since 2005 -- is the cost-effective combination of horizontal drilling and hydraulic fracturing or fracking. This process typically blasts huge quantities of water, mixed with sand and chemicals, underground to break apart rock and allow the natural gas to flow from the shale into the well.

Many environmentalists oppose fracking, because it can use a lot of water in parched areas, create waste water, trigger small earthquakes and contaminate groundwater. They also worry that the low cost of natural gas reduces demand for carbon-free renewable energy sources such as solar and wind.

Natural gas is already cutting into the share of U.S. electricity provided by coal-fired power plants, which has fallen from 53% in 1993 to 42% in 2011. During that period, EIA says natural gas' share nearly doubled -- from 13% to 25% -- and is projected to hit 30% by 2040.

The agency expects U.S. natural gas production will increase 44% between 2011 and 2040, saying almost all this growth will be due to shale gas. Yet It says there are long-term uncertainties about the productivity of shale formations, because many are so large that only limited portions have been widely tested for production.

Fracking has brought economic revival to areas with the largest shale formations, including the Barnett in central Texas, the Eagle Ford in southern Texas, the Bakken in North Dakota and the Marcellus in Pennsylvania and several neighboring states.

Earlier this week, the agency attributed part of the recent U.S. decline in heat-trapping carbon dioxide emissions to the nation's switch from coal to natural gas, which emits about half as much CO2 as coal per unit of electricity.