volume of shale gas production is already decreasing at several shale oil deposits in the US. The drop in production at some facilities has been over 50%. Also backing OPEC's prognosis, are recent figures from the International Energy Agency (IEA) indicating the upcoming end of the energy sector revolution. The IEA has calculated that in seven years the shale energy boom in the US will decline.

Further setbacks to the use of shale gas have been the environmental challenges that accompany shale gas production. These include the pollution of drinking water sources, alleviation of the threat of earthquakes in the seismically active areas of the US and the large quantity of rocks that are left behind following shale oil drilling. In addition, the shale gas boom has thus far failed to make any impact on the global crude oil prices mainly owing to the difficulties involved in producing shale gas economically.

On the other hand, some market pundits believe that the US shale gas boom and the recent easing of economic sanctions on Iran could make crude oil prices fall in the near future, which could be a cause of concern for the members of OPEC, who have enjoyed a strong run as prices have stayed high. This could mean that OPEC may have to cut its production starting next year as supply increases from countries outside the cartel, such as the US, Canada and Khazakhstan. Recent figures suggest that the US is producing more crude oil than it is importing for the first time since the 1990s and is expected to be the world's largest oil producer in a few years. Furthermore, the country's dependence on petroleum obtained from conventional sources has also declined as train and truck engines have begun using the unconventional, but abundantly available and cheap, shale gas.

Meanwhile, India with its ever-increasing fuel needs, which may increase three to four times in the next 20 years, has started contemplating other options to meet its rising fuel demands. In addition to procuring shale gas from the US, the country is also mulling domestic shale gas exploration and procurement of shale gas from countries other than the US. The country is also working on a pipeline project from Turkmenistan that will pass through Afghanistan and Pakistan. India also enjoys good trade relations with Iran and with the recent six-month waivers granted to India by the US and its allies on the purchase of crude oil from Iran it seems at this point of time that India has sorted its issues regarding the procurement of crude oil. However, only time will tell whether the US shale gas boom is here to stay or falls short of expectations like the ultra-deepwater discoveries in Brazil in 2007 and 2008 and the enormous Kashagan oilfields in Kazakhstan.

POLYMERUPDATE is India's leading plastics and petrochemical intelligence provider. For over a decade POLYMERUPDATE has been a world renowned provider of Petrochemical Market