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Shale gas producers are doing swift business in the U.S., but the industry is fast becoming
a threat to OPEC's more vulnerable members, who are expected to voice their concerns at
a meeting of the cartel on Friday.
Yoo Li-an reports. The emergence of shale gas,. which is natural gas trapped in thick
shale formations, has created an energy boom in the United States.
But the shale gas boom is putting downward pressure on international oil prices. and
that is expected to create a rift within OPEC, or the Organization of the Petroleum Exporting
Countries, according to a report by the Wall Street Journal.
The report said members of the cartel that are more vulnerable to the falling prices
are expected to call for a cutback in production of shale gas from the U.S. at an OPEC meeting
in Austria scheduled for this Friday.
African members of OPEC such as Algeria and Nigeria are among the nations that have been
the hardest hit by the American energy boom,. as they produce oil of a similar grade to
shale oil.
Gulf countries such as Saudi Arabia are less susceptible, as they have the financial strength
to withstand price drops,. which, the report said, is why OPEC members are expected to
engage in a power struggle over the production of shale gas.
The American energy revolution is far reaching,. bleeding even into the petrochemical industry.
Both shale gas and crude oil can be used to make ethylene,. which is the chemical building
block for plastics.
The cost of making ethylene in the U.S., which uses shale gas, is half of what it is in countries
like Korea, which use crude oil.
The price advantage has allowed U.S. companies to increase their share of petrochemical products
in big markets like China,. posing a threat to Korea and other countries that still use
crude oil.
Yoo Li-an, Arirang News.