Unconventional gas and the Europe Union : prospects and challenges for competitiveness

This article studies the likely impact of unconventional gas developments in the US on EU competitiveness. We find, first of all, little evidence for a prosperous unconventional gas development in Europe. Second, the US boom has already a strong impact on both world and European energy markets. In particular, lower US gas and coal prices have changed relative energy prices both at home and abroad. Finally, competitiveness impacts in some (sub)sectors will be considerable. These impacts are not only related to production based on gas use as a feedstock but also on the "byproducts" from unconventional gas production, such as ethylene, propane and butane. However, several indirect impacts, such as lower coal import prices, may soften the adverse competitiveness impact in the EU.