Posted June 24, 2011
The Wall Street Journal's Holman W. Jenkins Jr. has an interesting column that contemplates the effect of European shale gas on the energy and political power balances.
The gist of the piece is that gas extracted from shale rock formations through hydraulic fracturing or "fracking" could reduce the market leverage Russia has enjoyed as the world's largest supplier of conventional natural gas. As a result, the political power of Vladimir Putin, the country's former (and future?) president and current prime minister could be diminished. Jenkins writes:
"Western governments have not cut profiles of exceptional courage in dealing with Putin's Russia. Yet, beyond our merits, the Lord has recently smiled on us in the form of shale gas. First, thanks to the unexpected shale gas boom in the U.S., liquefied natural gas cargoes once planned for the U.S. have gone looking for new buyers. Result: European customers have been able to shake off Russian long-term contracts linked to the price of oil."
Jenkins mentions that the Russians (read: Putin) don't seem rattled by the potential market shift, but a spreading shale gas boomlet could change that:
"Russia insists the gas glut is temporary. It has tried to fight back by pushing gas sales to China. But now those talks are stalled over price thanks to Beijing's discovery that--guess what?--China back home may have the biggest shale potential of all."
China's nearly 1,300 trillion cubic feet (tcf) in estimated shale gas is a lot of potential. Yet the market for Russian conventional gas (1,680 tcf) may be affected by development much closer. Poland could hold 300 years' worth of shale energy, which Jenkins writes could help it shed its "energy captivity" to Russia.
Though shale gas probably won't reach the marketplace before 2025, he writes, "shale is already reshaping global energy politics." The potential is so high that some politicians in France, which passed a ban on fracking, are rethinking that position.
Closer to home, the take-away is the game-changing potential of American shale gas, estimated at more than 850 tcf (compared to proved U.S. conventional reserves of 245 tcf). We're already seeing economic benefits in Pennsylvania, Texas, North Dakota and other states where shale gas is being developed. Access to these reserves is a key part of securing America's energy future - available energy right here at home.
Additional Resources: World Shale Gas Resources
ABOUT THE AUTHOR
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.