TORONTO (miningweekly.com) – Most exploration and production (E&P) market participants that contributed to a recent market survey believe shale gas prices have bottomed out and 87% of survey respondents predicted natural gas prices would stay the same or increase over the next two years or increase by 10% or more in the next five years.

Until then, E&P companies are moving away from dry gas and are focusing instead on liquid-rich plays, such as wet gas and shale oil.

On the heels of record-low natural gas prices, RBC Capital Markets and the Economist Intelligence Unit on Tuesday published a report focusing on the US shale gas boom and its implications for North American economies and businesses.

The report examined how the surge in unconventional gas production is transforming sectors such as energy and transportation.

"We are entering a paradigm shift in the way that businesses and national governments look at energy, particularly as it relates to underlying market drivers, business models, risks and economic impact stemming from the shale gas boom," RBC Capital Markets co-head of global research Marc Harris said.

Co-head of global research Richard Talbot added that the coming years would be transformative for companies, particularly those in the energy, infrastructure, manufacturing and transportation sectors, which would, in turn, create opportunities for both investors and corporations.

The report had found the shale gas boom was making US companies think twice. Companies in the energy, manufacturing and transportation industries were reassessing underlying market drivers, business models and risks as a result of the shale gas boom. On an economy-wide level, respondents expected that shale gas would improve country competitiveness in both the US and in Canada.

The shale gas boom was also found to impact industries differently, especially when looking at manufacturing and transportation for example. Low-cost shale gas would be especially beneficial to companies that rely on feedstock or direct energy usage to compete on a global level.

In industries like petrochemicals and fertilisers, where feedstock or energy inputs could account for up to 90% of total production costs, low-priced shale gas would be a game changer.

The impact on the transportation industry would be subtler; rather than a complete transformation to gas-based usage, diversification would likely take place across the industry.

According to more than half (54%) of those surveyed in the report, shale gas could lead to natural gas becoming a significant US export in the medium term. However, revenues generated from natural gas exports would not necessarily have a significant positive impact on the state of the overall US economy.

The impact on job creation would be positive, but energy security and environmental concerns could limit the scale of natural gas exports in the US.

The report also highlighted that a lack of transparency remained an obstacle to investment. A lack of transparency regarding chemical usage by producers is a deterrent to gas-related investments, according to 25% of institutional investors who responded to the survey.

While the industry does engage in some reporting on the topic, some of it remained incomplete or inaccurate and presented an issue for potential and existing investors. Improved transparency, increased environmental risk management and implementation of best practices would help the industry maintain its licence to operate while at the same time capturing the benefit of production currently lost to fugitive emissions.

The report also found infrastructure would be challenged to keep up with demand dynamics. While sourcing infrastructure investment capital was unlikely to be a significant bottleneck to the growth of the gas industry, regulatory risks remained prevalent. Regional pipeline supply dynamics were rapidly changing in response to changing demand conditions.

Notably, an increase in natural gas liquids demand had created an infrastructure bottleneck in some regions, for example in north-east US.