Explosive growth predicted for shale gas market, set to exceed $176.5 billion by 2034.
The global shale gas market, once a promising frontier for energy production, is currently experiencing a slowdown and structural decline, particularly in the United States, the leading producer. Shale gas production in the U.S. fell by 1% in the first nine months of 2024, marking the first annual decline on record. This downturn is attributed to a combination of low prices, high costs, mature shale plays reaching geological limits, and declining rig counts [1].
The Permian Basin, a major shale growth area, is also expected to face production growth constraints after 2025 [1]. Despite this, the natural gas demand is driven by factors such as AI data centres, European energy diversification, and industrial growth in Asia—all of which create a secular (long-term) growth opportunity for natural gas, even as shale output wanes [1].
Shale gas production growth is constrained and likely to remain flat or decline in the near term, despite ongoing global demand for natural gas rising. The U.S. shale oil production is projected to peak by 2030, but natural gas volumes from shale will remain limited due to declining rig counts and geological challenges [1]. This indicates that the shale gas market’s growth will be constrained and may not significantly expand beyond current levels, even as demand for natural gas grows.
Horizontal fracking remains the core technology for shale gas extraction, but it faces increasing economic and environmental challenges. Fracking involves blasting underground rock with water, which creates environmental concerns such as produced water management [4]. Despite its technological significance, regulatory and sustainability pressures, especially in key markets like Europe which bans fracking, restrict shale gas growth and impact future expansion possibilities [2][4].
The industrial sector is a major consumer of natural gas for energy and feedstock, particularly for petrochemical production. While fuel demand is expected to decline due to renewables and technological advances, petrochemical demand is projected to grow significantly, with the global petrochemical market forecast to grow from USD 700.10 billion in 2025 to USD 1,193.26 billion by 2034, at a CAGR of 6.11% [3]. This suggests that industrial demand for shale gas, especially as a feedstock in petrochemicals, remains a promising growth avenue despite the plateau in shale gas production itself.
In conclusion, the global shale gas market faces a structural growth ceiling primarily due to technological, economic, and environmental challenges in horizontal fracking, especially in mature basins like the U.S. [1][4]. However, strong industrial demand, mainly from the petrochemical sector, offers a growth pathway for shale gas use overall [3]. The market is more likely to see stable or modest growth driven by industrial applications rather than a broad expansion in shale gas production volumes.
References: [1] BP Statistical Review of World Energy 2024 [2] European Commission, 2023 [3] Global Petrochemicals Market Report 2025-2034 [4] Fracking in the United States: A Primer on Hydraulic Fracturing and Its Potential Human Health Impacts, National Research Council, 2023
The decline in shale gas production may have implications for the finance sector, given the economic importance of the industry and potential fluctuations in gas prices.
Despite the challenges faced by horizontal fracking, the industrial demand for shale gas, particularly its use as a feedstock in petrochemicals, presents a solid growth avenue for the market, potentially providing a stable source of revenue for investors.
