The wake-up call for Europe depending on a single source for its energy has now hit home. As a result, EU states are set to build more liquefied natural gas terminals, upgrade pipeline networks and grids and expand southern gas supplies through Georgia and Turkey to southern and central Europe.
The CEO of ENI, which is the biggest seller of natural gas in Europe, providing 22 percent of the market from contracts with Gazprom worth over 10billion Euros per annum. Scaroni stated, “I say embrace shale gas or embrace Russia. The Russian option is no longer an option, so we should pursue shale gas vigorously and then look at whether we should be shutting down nuclear plants in Germany.”
Fracking – President Obama indirectly called for Europe to start fracking for shale gas, “European countries will become less dependent on energy coming from, let’s say, difficult spots,” he said. He also subtly criticised the EU for heavily favouring environmental regulation over energy production, saying the U.S. had made tough choices that the EU now faces.
Will the US come to Europe’s rescue? US Secretary of Energy, Ernest Moniz was repeatedly asked last week if the US would start exporting natural gas to Europe. The short answer was no, largely due to the fact that it is still not logistically possible. As it stands, there are 24 pending applications for US LNG exports, where Moniz stated, “maybe we will give some additional weight to the geopolitical criterion going forward”.
For the UK, in March 2013 Centrica and the North American Cheniere Energy struck a deal with the US to start exporting its’ gas to the UK for 10 years starting 2018. All other US gas exports to the UK follow the same timeframe.