Forbes: The Amazing Confusion Over European Shale

The disease started in America, and is increasingly infecting the European energy debate. The ailment relates to the misdiagnosis that shale gas developments will provide total ‘energy sovereignty’ for European gas supplies. What’s worked for America, can supposedly work for Europe, an argument that reflects the common metric that research and policy outfits are using to decide whether shale is worth the hassle. The obvious answer is even if Europe went full steam ahead with shale, it still has to import lots of external gas. Call it the anodyne observation of the obvious. But to say this misses the policy point, would be an understatement: European shale should have nothing to do with ‘energy sovereignty’, and everything to with creating supply side optionality and greater liquidity. That’s the value proposition here, not declaring ‘energy independence’ quicker than Charles de Gaulle could say ‘vive le France’.

Believe it or not, the European Commission spent a fair chunk of tax payer’s money getting its Joint Research Centre looking into the energy sovereign question. The result; fully fledged European shale developments could see Europe keeping gas import dependency to 60%, assuming shale plays cover declining conventional production elsewhere. Obviously that’s a highly optimistic ‘best case scenario’ to ramp up shale production to 40% of domestic demand, but even the market savvy UK has started to couch its debate in the same terms on the political right. 40tcf of gas will supposedly be the answer to all Britain’s economic ills. It’s North Sea ‘take two’. London can even take a cheeky look at gas to liquids options to provide fuels that really help to clip import bills.   MORE