Shale Gas: There Will Be No Revolution in Europe


Shale gas has become the object of all sorts of fantasies in France. According to the US Energy Information Administration, a US body that manages energy statistics, France is sitting atop considerable reserves of gas and oil from shale: 3,870 billion cubic metres of gas and 4.7 billion barrels of oil. That works out to nearly 80 years of gas supplies and nearly 60 years of oil. And it’s powering the wildest dreams. The French are not the only ones fantasising either: Poland is hoping to reduce its dependence on Russia, and Britain is counting on shale gas to offset the decline in its North Sea oil fields…

In the United States, it’s true, these non-conventional hydrocarbons have brought on a revolution. Between 2005 and 2012, gas production jumped by 33 per cent and oil by 28 per cent. According to a very recent study from IHS Cera (which advises the oil industry), this boom led in 2012 to the creation of 2.1 million jobs (including indirect and induced), generated $75bn in tax revenue, and increased household revenues by $1,200.

The country has doubly benefited from the “oil and shale gas” effect: not only has the US economy been boosted by the resurgence of activity in the oil industry itself, but it has also benefited from the dramatic decline in the price of gas associated with the increased production, which has fallen more than fourfold in six years. It’s a huge competitive advantage, which has benefited highly energy-intensive industries and sparked the phenomenon of reindustrialisation in the United States. Energy independence for the North American continent by the end of the decade is considered a plausible hypothesis.

Yet it is clear that Europe is not America. Even assuming that the doubts about the pollution involved in the operation are cleared up and that the technology used – the notorious hydraulic fracturing – will be allowed anywhere, shale gas will not cause an economic shock in Europe of a magnitude similar to that in the United States. The argument is regularly wheeled out by the opponents of drilling, but it is also widely shared by the oil and gas industry experts themselves.

*Read the full article here.

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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