Natural Gas Facts

What is shale gas?

Shale gas is conventional natural gas that is produced from reservoirs predominantly composed of shale with lesser amounts of other fine grained rocks rather than from more conventional sandstone or limestone reservoirs. The gas shales are often both the source rocks and the reservoir for the natural gas, which is stored in three ways:

How is shale gas formed?

There are two theories as to how natural gas is formed. The most widely accepted theory, the organic theory, maintains that natural gas formation begins with photosynthesis, where plants use energy from the sun to convert carbon dioxide and water into oxygen and carbohydrates. The remains of these plants and the animal forms that consume them are buried by sediment and as the sediment load increases, heat and pressure from burial converts the carbohydrates into hydrocarbons. Natural gas formation takes place in fine-grained, black, organic, shale source rocks. Continued pressure from burial forces most of the natural gas to migrate from the organic shales into more porous and permeable rock such as sandstone and limestone. The natural gas remaining in the shales is termed shale gas.

The other theory of natural gas formation is the inorganic theory which speculates that hydrocarbons did not originate from buried plant and animal material, but instead were trapped inside the Earth as it formed. This theory is most likely not applicable to shale gas.

How is shale gas found?

Exploration for gas shales is similar to exploration for conventional reservoirs which, for an unexplored basin, usually includes:

In the case of shale gas, the primary targets are shale formations with interbedded porous and permeable fine-grained sediments and natural fracture systems.

Down-hole tools used to find fractures include density compensation, caliper and temperature logs, and formation microscanner imaging.

Low-altitude, airborne multispectral imaging is a new tool used to locate subsurface microfractures and prospectivity of shale formations.

Where is shale gas found?

There are five major shale basins in the United States from which shale gas is produced. To date, more than 40,000 wells have been drilled. There are seven other shale basins from which there has been no production.

Shale gas in Canada

Although there is currently very little commercial shale gas production in Canada, there is active exploration and resource evaluation in seven provinces and one territory.



Gas in Place
(billion cubic metres)

Alberta southern two-thirds of province and along Rock Mountains and foothills 28,328
Saskatchewan southern one-third of province Not Available
Ontario southwest tip of province 6


St.Lawrence Lowlands between Montreal and Quebec City 40 to 1,150
New Brunswick southeast part of province Not Available
Nova Scotia northern part of province from New Brunswick border through Cap Breton Island Not Available
Northwest Territories southwest tip of territory Not Available

Source: Canadian Society for Unconventional Gas
Most of the current shale gas production in Canada is from the Horn River Basin and Cordova Embayment areas of British Columbia, and from northwest Alberta.

How is shale gas produced?

Because shale makes up the largest proportion of sediments in the Western Canada Sedimentary Basin, gas shales are thick and laterally extensive. Although production rates are generally low, gas shales tend to have low decline rates once production has stabilized and long production lives. Drilling and production of gas shales in many cases is very similar to that for conventional natural gas reservoirs; however, due to a lack of permeability, gas shales almost always require fracture stimulation and often require higher well densities. Some shales, such as those in the Michigan Basin (Antrim), contain water which must be produced first to depressure the shale, similar to many NGC reservoirs.

A wide range of fracturing technologies has been used to allow the gas to flow through the reservoir, including:

As well, horizontal drilling has been used to expose more of the formation to the well bore. Recovery rates for gas shales average approximately 20 per cent compared to up to 75 per cent for conventional reservoirs.

Natural gas from shale history

Natural gas has been produced from shale in minor quantities since the 1800s, but significant commercial production didn't begin until 1926 when development of the Devonian shales in the U.S. Appalachian Basin began. Widespread development did not occur until the 1980s when a U.S. government tax incentive program stimulated exploration and development of unconventional reservoirs, including gas shales.

There has been no commercial shale gas production in Canada to date. The Gas Technology Institute conducted a study of Canadian gas shale potential that was released in 2003. Although incomplete, this study estimated over 860 trillion cubic feet of natural gas resource in the gas shales.

If only a fraction of Canada's gas shale resource could be recovered, it would represent a significant addition to Canada's natural gas reserves.