Europe Could Miss Out on the Shale Gas Revolution
VADUZ, Liechtenstein, March 20, 2013 /PRNewswire/ --
The world is on the verge of the 'Golden age of gas', where unconventional gas, or shale gas, will be considered a game changer for the global market. However, in Europe environmental concerns have put the brakes on shale gas production in many countries, including the UK and Poland, writes energy economist Dr Frank Umbach.
Writing for World Review, he says that nearly half the global gas production up to 2035 will come from unconventional gas, "if the industry receives social license to operate within stringent regulatory regimes to satisfy public environmental and social concerns."
The rising volume of relatively cheap coal imports from the US to Europe in 2012 has reduced Europe's consumption of gas. It has also led to higher greenhouse gas emissions and put Europe at odds with EU climate and energy policies.
"Europe's energy-intensive industries, such as the chemical industry, have become increasingly concerned that the gas glut in the US has reduced natural gas prices there by more than two-thirds since 2008," he says.
"In Europe, gas prices have remained relatively expensive because of the linkage to oil prices and long-term contracts with Russia which have 'pay-or-take' clauses. The importer has to pay the supplier a certain price, even for products they do not take, for this type of contract clause."
Cheap gas reserves also call into question the renewable energy policies of the EU, he adds.
About the Author
World Review author Dr Frank Umbach is a Senior Associate and Head of the Programme 'International Energy Security' at the Centre for European Security Strategies (CESS) GmbH, Munich-Berlin and Associate Director of the European Centre for Energy and Resource Security (EUCERS) at King's College, London. He is also a consultant on international energy security and security policies as well as the Asia-Pacific region.
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