Shale gas revolution in the United States is fast transforming the world’s energy landscape
Is Europe getting left behind?
Natural gas extracted from dense shale rock formations has become the fastest-growing source of gas in the United States and could become a significant new global energy source. Although the energy industry has long known about huge gas resources trapped in shale rock formations in the United States, it is over the past decade that energy companies have combined two established technologies—hydraulic fracturing and horizontal drilling—to successfully unlock this resource. The recent breakthroughs in recovering unconventional gas means it now has an estimated 50 to 100 years of recoverable reserves.
The U.S. Energy Information Administration (EIA) estimates the United States possesses more than 2,500 trillion cubic feet of technically recoverable natural gas resources, of which 33 percent is held in shale rock formations. With the US getting on with it and reaping huge rewards in cheaper gas bills to its population, what is happening in Europe. Why was the media in the UK reporting that its was ‘a few hours from running out of gas’ a few months ago. The explosion of shale gas in the US has already reduced the gas prices, delinked it from the oil price, and created a global gas glut.
European leaders discussed the region’s reserves of shale gas at a summit recently, but the prospect of the continent enjoying a United States (U.S.)-style shale boom that drastically cuts energy costs remains elusive. The leaders of the EU’s Member States have already agreed that Europe is growing ever less competitive due to energy prices compared to other regions of the world, resulting in a lost opportunity and foregone economic benefits.
British Prime Minister David Cameron, whose government is advancing plans to exploit his country’s shale gas deposits, said Europe could not afford to be left behind as the world scrambles to develop the resource. He drew a comparison with the U.S, where years of extraction, using a much-criticised process of hydraulic ‘fracking’, has delivered record-low gas prices for consumers. “We must not be left behind in the global race,” Cameron said. But they are getting left behind!
Its about time shale gas become an important new source of supply in or around Europe. The United Kingdom is rich in shale gas reserves with significant deposits in the North West, the East Midlands, Wessex and Scotland. Though the UK government lifted a temporary ban on shale gas exploration and announced new regulatory on the 13th of December 2012 the industry is still very reluctant to go all in.
In France the French government imposed a moratorium on shale gas drilling due to concerns about its potential impact on the environment.
According to the United States Energy Information Administration, France has technically recoverable reserves of 5.1 trillion cubic metres. In the EIA’s survey of 14 European countries, France was second only to Poland in its level of shale gas deposits.On the 14th of September 2012 president Francois Hollande announced a continued ban on hydraulic fracturing in France and called for the revocation of seven outstanding permit applications for hydraulic fracturing operations. Hydraulic fracturing or ‘fracing’ techniques involve pumping fluids under high pressure into the reservoir to fracture the rocks and release the gas that would not otherwise be accessible.
In Germany, ExxonMobil has reportedly stated it would invest 100 million dollars into shale gas exploration in North-Rhine Westphalia alone and 1 billion dollars in Germany as a whole. Germany’s Ministry for Environment has published a study on impact of hydraulic fracturing on water and the environment with the conclusion that hydraulic fracturing should not be banned but recommended that shale gas operations should not take place in water protection zones.
In Poland the Energy Information Administration (EIA) calculated that Poland’s reserves range from between 1.4 billion to 5.3 trillion cubic metres of shale gas, potentially covering up to 300 years of domestic supply.
The US and China, are aggressively pursuing shale gas,and its about time Europe follows in order to aviod future economic meltdown and unemployment. They cannot afford to play politics with Russia and other expensive alternatives. All the pros and cons of fracking have already been listed and dusted by the US and China. US gas price is stated at US$2.5 per million British thermal units. In Europe its up to US$11/mBTU. How can the energy companies, energy-intensive industries and manufacturers compete with the US with such a huge disparity in costs?.
To capitalize on the shale gas revolution in the United States, the BASF TOTAL Petrochemicals LLC (BTP) joint venture (40% Total, 60% BASF) revamped the Port Arthur steam cracker in Texas to process ethane, found in abundance in U.S. shale gas. “In light of the impact of the shale gas revolution on the global petrochemical industry, Total is also examining a project to build a new ethane steam cracker that would be tied to the original Port Arthur steam cracker to capture maximum synergies while leveraging this cost-advantaged feedstock,” commented Patrick Pouyanné, President of Total Refining & Chemicals.
According to a new report from the Institute of Directors (IoD), Investments in shale gas drilling could yield an industry worth nearly £4bn a year to the UK economy and create more than 70,000 jobs. This would also reduce the price of gas and make the economy more competitive. Need we say anymore.
In Europe Green politicians and environmental campaigners say it is a dangerous distraction from the pursuit of carbon-free energy and energy efficiency.
What more evidence does the European Union need to encourage investment in shale gas? In the UK gas prices has led to increased number of old age pensioners suffering through the winter and even dying. The gas bill for the average family continues to rise. The US and China have enough experience to deal with any downside of fracking and they have done well so far! If there is the political will there is a way. The Big oil conglomorates investing heavily in this process in the US know exactly what they are doing and the US is reaping the rewards.
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