The IEA forecasts that the US could overtake Saudi Arabia as the world's biggest oil producer by 2017. Photo: Bloomberg
WHEN Barack Obama assumed the presidency of the US shortly after the peak of the 2008 global financial crisis, he would have jumped at a result like this.
Could a single silver bullet help cut the US's carbon-dioxide emissions to their lowest level in 20 years, while helping to revive the country's ailing manufacturing sector and create thousands of new jobs during a recession?
As the President was promising that such goals could be achieved in his first term through a ''green new deal'' - where huge spending on renewable energy projects would stimulate the economy out of recession - an entirely different revolution was already under way.
Four years later, President Obama was returned to the White House this month, having made progress on many of those goals. But rather than renewables, he has fossil fuels to thank.
To be more specific, Obama can thank advancements in drilling technology that have vastly improved the amount of gas and oil that can be extracted from fracturing hard underground rocks known as shale.
The rapid deployment of this technology - known as fracking - has fundamentally changed the US through the provision of plentiful cheap energy, creating the sort of changes that seemed impossible just five years ago.
■Gas overtook coal this year as the US's biggest source of power.
■By reducing the market share of coal (gas is estimated to have only 60 per cent of the carbon footprint of coal), America's emissions from energy fell to their lowest level since 1992.
■Plans to import energy to the US are on hold, and companies are now seeking permission to export gas to Asia.
■Nearly 600,000 Americans will work in the shale sector by the end of the decade, according to President Obama.
■Many US manufacturers have hailed the availability of cheap energy as allowing them to consider expansion plans and compete better with rivals in Japan and Korea, where typically consumers pay three to four times more for gas.
Oil and gas veterans such as BHP Billiton petroleum boss Mike Yeager say the shale revolution is the biggest thing to happen to the sector in decades.
''It is absolutely stupendous,'' he said.
''Every single magazine, every newspaper, every conversation, every man, woman and child has this shale oil and gas thing creeping into their lives.
''It's creeping in in lower-cost energy, it's creeping in through tax revenues … It's creeping in in every imaginable way.''
And as the International Energy Agency reported this week, the world's energy map is fast being redrawn too, with the US on track to become self-sufficient in energy and overtake Saudi Arabia as the world's biggest oil producer by 2017.
Amid changes of such magnitude, one might expect the shale experience to quickly be repeated in Australia, given the nation's vast oil and gas provinces.
Australians have become familiar with - and often fearful of - the fracking of coal seams in Queensland, and shale fracking uses similar technology to plunder dense bedrocks that are typically found much deeper underground than coal seams.
Early movers like Santos, Hess, ConocoPhillips and others are already spending hundreds of millions of dollars establishing a foothold in Australian shale, with Santos achieving commercial flow rates in South Australia's Cooper Basin within the past month.
The chasing pack is not far behind: fresh from spending $US20 billion on shale in the US last year, BHP is now looking at Australian shale and is negotiating with landowners in Western Australia's Canning Basin about opportunities in shale there.
ExxonMobil has taken a small punt on shale exploration just east of Melbourne and even Fortescue Metals - the iron ore sector's most bullish pure play - this week confirmed it was in negotiations to buy an 18 per cent stake in a small Australian shale aspirant.
But despite the race being well under way, experts caution that shale's impact in Australia may not match its revolutionary influence on American society.
Boasting a large population and the biggest economy on earth, the US is a huge energy consumer that has traditionally been wary of allowing its energy to be exported to foreign shores.
Australia on the other hand tends to look abroad, sharing its energy supplies with the highest bidder, and the government seems to have no appetite for setting aside cheap gas to help local industry navigate the two-speed economy and high currency.
''The Australian government believes in allowing markets to adjust to new dynamics rather than trying to constrain domestic prices or supply through intervention,'' said Resources Minister Martin Ferguson, when asked if a domestic gas reserve for industry was imminent.
Australia has a series of large export gas terminals under construction, several of which are struggling to find enough gas to fill their processing potential. That means that any production of Australian shale gas - like coal seam gas - is likely to flow towards the export market rather than flood domestic markets, as happened in the US.
Stephen Reid from Deloitte says the persistent shortage of skilled workers in Australia's resources sector will act as a natural ceiling on the growth of shale.
''There is a lot of talk about shale but there is no guarantee that it will be economically viable in Australia … the skills to do the work, the availability of fracking crews, will be a real bottleneck, I suspect,'' he said.
''In the US there are hundreds of rigs and fracking crews but in Australia there's not that many rigs and even fewer fracking crews, and the cost of doing business in Australia is already a lot higher than in the US.''
This echoes Mr Yeager's comments. He said economic viability remained the biggest doubt hanging over the development of an Australian shale industry.
''It sure looks like we are going to have to get it out of the country in order to make it profitable, you've got that kind of economics in Western Australia,'' he said.
Infrastructure looms as another limiting factor on shale's potential in Australia. While much of the nation's east is well connected by gas pipelines, the grid does not connect to Western Australia or to the Northern Territory.
That's no problem for companies like Santos, developing shale in South Australia's Cooper Basin, but it may be an issue for those investigating shale opportunities in places like the Canning Basin, which is located in the far north of WA.
On that matter the US was blessed: the nation already had an extensive gas pipe network in place when the shale boom started to take off, meaning gas could be put straight into the grid and transported to almost any part of the country.
Mr Yeager said this unique combination of good geology, infrastructure, willing regulators and a big domestic market was the reason shale had boomed in the US, and the absence of any of those factors could prevent such a boom being repeated in other countries.
''This is the difference between what has happened in the US and what may or may not happen in the rest of the world,'' he said.
''This is why the US has this jump … it doesn't make it right or wrong, the US just has it.''
The ability of gas to reduce carbon emissions is also being contested here in Australia, where the local carbon tax is designed to induce power generators to start opting for fuels like gas and eventually renewables instead of the dirtier coals.
Research from Southern Cross University made available this week claimed that elevated levels of methane were recorded in the air and water close to coal seam gas fields in Queensland. Methane is a greenhouse gas that is captured under Australia's carbon tax regime, and the revelations have raised fears that the carbon benefits of choosing gas over coal may be smaller than previously believed.
Petroleum industry group APPEA said the study was preliminary and needed further peer review.
But Fiona Melville of resources-focused law firm Middletons said that even if shale did progress more slowly here than in the US, Australians should be optimistic about the calibre of international companies that were taking an interest in local shale.
''It's likely this is going to be a growth industry in Australia over the next decade or two … it just may be that initially the focus will be on niche areas that are close to existing infrastructure,'' she said.
Santos vice-president James Baulderstone said it might take three to five years to commercialise, but shale gas was destined to become another important part of Australia's resources industry.
''There is clearly a huge potential resource in Australia. We are already seeing significant local investment both from local companies and large multinational foreign companies,'' he said. ''I'm pretty confident there will be commercial quantities of shale being produced [in Australia] within the next five years.''