Shale Gas in Europe : Challenges and Opportunities

Rapidly evolving technologies and services have ignited a shale gas revolution in the United States. In April 2011, an initial assessment by the U.S. Energy Information Administration (EIA) revealed that shale gas is a “global phenomenon,” and many countries want to use more natural gas to reduce greenhouse gas emissions and backup intermittent wind and solar power. The emerging frontier could be Europe, the world's largest gas importer, where a healthy resource has governments debating whether shale gas should mitigate a risky dependence on Russia and its quarter share of proven global reserves. The current analysis outlines the three key challenges and opportunities that exist for domestic shale gas to make a material difference in Europe (Exhibit 1). As regional markets become more integrated, the chance that Europe could become more self-sufficient is fundamental to understanding the dynamics of the emerging global gas market. Projected energy consumption data come from the International Energy Agency's World Energy Model and the EIA's National Energy Modeling System