Shale Gas has proved to be a game changer in the US energy market, where its rapid increase in production is about to make the nation self-supplied with respect to gas and consequently drastically lowered the import of LNG (only 10% of the regasification capacity is required now ). It has also lowered the internal gas prices (from an average of near $9/MBtu in 2008 to below $3/MBtu in 2012i) and created new jobs (shale gas supported 600 000 U.S jobs in 2010 ). Shale gas source rocks are widely distributed around the world, and looking to the US, many nations have now started to investigate their shale gas possibilities.
Role shalegas within energy transition
Fossil fuels, such as oil, natural gas and coal are by far the largest sources of energy in the EU and are projected to dominate the European energy mix through to at least 2030. The 2°C Scenario of the Energy Technology Perspectives (IEA/OCDE) predicts decay in natural gas production after peaking in 2030. However, the share of unconventional gas worldwide is expected to increase from 12% (2009) to 24% (2035) and 34% (2050).
The European Commission Energy Roadmap 2050 identifies gas as a critical fuel for the transformation of the energy system in the direction of more renewables and lower CO2 emissions. It can be argued that in Europe natural gas replacing coal and oil undoubtedly will contribute to emission reduction in the short and medium term, and that natural gas will have a permanent role in the future energy mix provided a solution with CCS.
The most important European driver for shale gas development is the potential for higher security of energy supply, since Europe currently imports 60% of its gas requirements, a number that is projected to rise to 80% by 2030. In some EU countries close to hundred percent of the gas is imported from Russia. The possibility for lower energy prices that might come as the shale gas technology and experience develop is also a factor that is mentioned, as well as the possibility for jobs created by the shale gas industry.
There are, however, several concerns related to shale gas exploration and production. The most frequently discussed ones are faith of chemical additives to in the water used during production, and in particular risk of polluting the ground water. There is also a debate on the GHG emissions of shale gas (CO2 and methane) and its energy efficiency compared to other energy sources. Concerns are also raised about land and surface impacts, noise and micro seismic events created by the production method.
There are also questions about the total potential of shale gas in Europe as a whole and in the member states, since there is relatively little knowledge on the source rocks for the gas, their quality and distribution and how easily producible the gas is.
Shale Gas basins are unevenly distributed among the EU member states and are not restricted within national borders, so EU co-operation issues related to rights and cost-benefit sharing will have to be addressed. The basins are transnational and knowledge could be easily transferred from one European country to another.
With the European continent being densely populated, public perception issues will most certainly arise. Even though a recent study performed by the European Commission has concluded that its existing legal framework was adequate to address shale gas extraction , there are, in terms of policies some points are not covered. Although different countries may have different political position, a sound common European knowledge basis could be helpful to this respect.
The bottom line is that Shale Gas issues may well affect EU even if individual European countries choose not to pursue this resource. It is a potential opportunity for Europe, but requires a rapid and comprehensive response in terms of assessment of potential, technology, regulation and a facing a range of policy issues. Member states with an identified shale gas potential are already starting to act.