Exploit potential of shale gas: US to India and China

As such the Obama Administration has proposed do a resource assessment of certain shale basins in India by the US Geological Survey, and provide workshops to train Indian geophysicists on how to do their own resource assessments.

"What we have offered to India is to bring our best knowledge about how you make that estimate, how you make that resource evaluation, and to bring our scientists to them to talk about that," US Coordinator for International Energy Affairs David Goldwyn said.

"We are waiting for India's reaction and we’re hopeful that they’ll do it. "I think you can't tell until you drill, but the shale presence is there," Goldwyn told reporters on the sidelines of the Global Shale Gas Initiative Conference.

Representatives from 17 countries including India and China are participating in the two-day international conference hosted by the US State Department as part of its aim to help countries around the world to reduce dependence on foreign oil.

The US shale gas phenomenon has transformed global energy markets, he said, adding that because the United States has the technology to develop efficiently large quantities of gas from shale, global prices of liquefied natural gas have decreased.

"Gas has become cheaper. Gas is now competitive with coal on a BTU basis, which means that countries that might use coal can now not make an economic choice, but on a competitive basis choose gas for their next level of power generation," Goldwyn said.

India has a licensing round probably in September, he said, adding the pace of development will probably come with whether there's success in these first basins, whether there's an assessment of what they have.

"Reliance has made an investment in a US company to learn the technology, and what a lot of countries are doing is they're trying to find out how it's done.

"So it'll depend on success and, in India in particular, depend on the price of gas," the US official said.

Goldwyn said the US had entered into a memorandum of understanding with India during the visit of Prime Minister, Manmohan Singh, to Washington last November.

The US has also signed a similar MoU with China. "We have MOUs signed with China and India, but there are follow-up steps that are needed to begin implementation, although, we will have our first workshop in China, November 9th to 11th so we'll be underway in China," Goldwyn said.

"Under the Energy and Climate Partnership of the Americas, we've also committed to do some in the Southern Cone, and so we're looking at potential assessments in Chile and Uruguay as well," he said.

For China and India, it's both climate security and economic security because they have large demand for resources and the market is volatile and to be able to produce it domestically is a huge boon, Goldwyn said.

In countries in the Southern Cone, they don't have LNG importing capability, and so they don't have a choice of gas unless they produce it domestically, he added.

If gas is cheap, plentiful, and available to countries like China and India – they have a choice versus coal – it's competitive on a cost basis and the climate implications are huge, he said.

"You also have in India, and I would say also in Pakistan and other places, really, tens if not hundreds of millions of people without access to electricity. What are your choices for base load electricity?  Nuclear, hydro, gas, fuel oil; so they don't have coal.

"So coal is cheap and plentiful. If you can make gas cheap and plentiful, it's a real choice,'" the official added.