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Shale gas and EU energy security

Written by Gregor Erbach
Shale gas and EU energy security

© Nightman1965 / Fotolia

While the United States has abundant supplies of cheap gas thanks to the ‘shale revolution’, the EU remains dependent on gas imports. The Ukrainian crisis has given rise to increasing concerns about the security of the EU’s gas supply. At the request of the European Council, the European Commission has analysed the situation, and published a European Energy Security Strategy. Among other elements, the strategy focuses on increasing energy production in the EU and diversifying external supplies.

This briefing addresses the question whether, and to what extent, shale gas can contri­bute to European energy security. Some European regions have significant shale gas resources, but more exploration is needed to find out whether they can be developed commercially. Most analysts agree that shale gas in Europe will be more expensive than in the US, due to different geology and the need to address public acceptance and environmental impact. Shale gas will not resolve short-term energy security issues as exploration and development will take 5 to 15 years. In any case, the volumes produced will not make Europe self-sufficient in gas, but could help to reduce gas prices.

The increased production of shale gas in the US has already reduced global gas prices by reducing US demand for liquefied natural gas (LNG). Future gas exports from the US will contribute further to this trend, but prices for exported gas will be higher than domestic US prices due to the cost of LNG transport. Moreover, many analysts believe that exports of US shale gas will go to Asian markets. Prices in Asia are higher than in Europe, where ample supplies of conventional pipeline gas compete with LNG. Analysts agree that Russia will remain an important gas supplier for the EU.

Read the whole Briefing here

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3 thoughts on “Shale gas and EU energy security

  1. But there are other alternatives to Russian gas imports!

    Posted by Oliver Jung | December 19, 2014, 13:16


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