EU reports should 'green-light' shale revolution
A clutch of new reports should finally green-light Europe’s own shale gas revolution - that is, if the EU can refrain from shooting itself in the foot
Europe’s reluctance to follow the United States and pursue its own shale gas revolution is well documented. Partly it’s been down to the anti-shale, anti-fracking environmental lobbies having a much stronger political voice in Europe; partly it’s down to the fact that the U.S. had drilled more wells offering greater certainty about the potential of reserves.
But a clutch of new reports should finally green-light Europe’s own shale gas revolution. Then again, the EU does have a nasty habit of shooting itself in the political foot.
There is no question that an industry operating in what was believed to be the twilight era for hydrocarbon energy is, as Ed Crooks argued in a recent Financial Times special on energy, being “transformed” as a result of how America has “entered a new era of plenty”. With the oil majors leading the way, the global spread of the revolution is only a matter of time.
Chevron has already bought up operating rights across a swathe of land in Eastern Europe from the shores of the Black Sea to the Baltic, in anticipation of the anti-fracking tide turning in Europe. Bucking the EU trend, Poland and the UK have already opted not to put barriers in the way of the domestic development of significant shale gas resources.
The German government, after its knee-jerk reaction to Fukushima, is currently in “two-minds” over shale development. But it is currently searching for a way back-track on its commitment to total nuclear closedown; not least in the face of a looming energy ‘gap’ that its renewable energy industry won’t be able to fill.
Bulgaria is also re-visiting its fracking ban. Meanwhile, French oil companies are concerned at the country’s potential dismissal of its own vast domestic shale gas resources and have called for shale drilling experiments to be conducted to calm an over-heated public debate.
Shale gas’s transformation of the U.S. energy scene may not translate to the same degree in Europe, but the benefits to EU economies, with few domestic energy resources and a total reliance on foreign gas imports – particularly from Russia – ought to be plain.
Shale gas development is already the key bright spot in a troubled U.S. economy. By the end of 2011, 600,000 new jobs had been created in America. A report by Price Waterhouse Cooper suggests U.S. manufacturing will, by 2525, see the impact of shale gas development create a further one million jobs.
A study by global market consultants IHS estimates that by 2035, U.S. jobs from natural gas production could peak as high as 2.4 million and generate $1.5 trillion in tax and royalty revenue. For good measure, the national switch from coal to natural gas has seen domestic gas prices halved and has, as the new EU reports acknowledge, led to a flat-lining of global (and European) gas prices.
Something unheard of just a couple of years ago, energy independence is today being widely touted as a more than realistic proposition for the U.S.
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