Forbes: Why Europe Cannot Afford Not to Frack for Shale Gas

There are a number of political pressures leading some European countries to ban fracking for shale gas: France is one that has done so. However, the truth is that if other areas of the world go ahead then it won’t really be possible for Europe to not frack itself: we’d just not be able to afford not to.

Two points to be made:

"The shale-driven price of natural gas in the USA has fallen below $2 / MMBTU. This is a good bit less than one quarter of the current price of gas in the UK and NW Europe (and perhaps an eighth of that in Tokyo) – the kind of structural disadvantage to our economies we can’t tolerate."

It’s not so much the effect on energy prices into the domestic market that matter, it’s the follow through effect of low energy prices in the industrial sector that do:

"Cheap domestic energy is also good news for the manufacturing sector. “The discovery and development of North America’s shale resources has the potential to be the most remarkable source of economic growth and prosperity that any of us are likely to encounter in our lifetimes,” U.S. Steel CEO John Surma told the Congressional Steel Caucus in a late March hearing. It’s a virtuous cycle: More drilling requires more steel, and lower energy costs give U.S. steel producers a cost edge. This at a time when the Department of Energy reports that the energy intensity of U.S. steel companies is now among the lowest in the world.”  MORE