Shale not a miracle solution for Europe

Shale oil and gas have had limited benefits for the US economy and their advantages for Europe will be even slimmer, a French think tank said Wednesday. The shale boon in the US has mainly benefited local economies and the gas industry with only "minimal" impact on macro-economic growth, the Institute for Sustainable Development and International Relations (IDDRI) said. A sharp fall in gas prices that has benefited consumers is unlikely to be sustained, and for the foreseeable future, the United States will remain a big importer of crude oil, it said in an analysis. The report cautioned that the advantages for Europe would be even narrower, given restrictions in geology, environmental considerations about exploration and a long and costly lead time to exploit finds. "It is often overlooked, but the US shale revolution came after several decades of geological exploration which scaled up massively in the years preceding the boom," IDDRI said. "Between 2000 and 2010, the US drilled a total of 17,268 exploratory natural gas wells, at an average of 130 per month. Exploration in the EU is in its infancy, with about 50 wells drilled" thus far. A middle-of-the-road scenario suggests that by 2030-2035, the EU could meet between three to 10 percent of its projected energy demands from shale, IDDRI said. "Shale gas should therefore not be seen as a solution to the EU's energy, climate and competitiveness challenge," said the forecast. "The EU needs a holistic strategy combining energy efficiency, eco-innovation, low-carbon energy sources and a stronger, more integrated internal market." It added: "Shale gas could be a complement to this, in so far as it could contribute to a more liquid, resilient internal gas market, particularly in those member states currently highly dependent on polluting coal or Russian gas."