Over the last few weeks we have discussed the impact of a global gas revolution. It is fairly certain that demand for energy will rise dramatically about 50 percent over the next 15-20 years largely in response to rapid economic growth in the developing world.
However it is worth noting that the Energy Information Agency anticipates “steadily rising global production through 2035, driven primarily by a combination of OPEC production increases and larger unconventional sources” rather than overall demand.
Much of this increased production and recent optimism derives from unconventional oil and gas being developed in North America. The economic and even political implications of this technological revolution, which won’t be completely understood for some time, are already significant. For the US this could mean energy independence in the next decade and provide significantly lower energy prices which will have significant positive ripple effect for the US economy, encouraging companies to taking advantage of lower energy prices to locate or relocate to the US.
According to its Ministry of Land and Resources’ preliminary study, China has the world’s largest reserves of nonconventional gas, double the estimated US reserves. However China’s relative lack of equipment, experience and potentially the necessary extraction resources mainly water may inhibit or slow down development there. This can also be seen as a driver as to why China is now the largest investor in renewable energy.
European leaders are uncertain about the geology, political and public acceptability, environmental impact and financial viability of shale gas in Europe. For example, national authorization processes vary considerably by EU member-state and are generally stricter than for North America. The Polish Government sees shale gas as an important resource for diversification away from dependence on Russian gas and has been granting exploration licenses, while the French Government has banned hydraulic fracking.