The Slate Revolution Part II

The Slate Revolution Part II

It is sometimes said that the American shale gas has led to oversupply and undermined the gas market in Europe. The causal relationship is somewhat more complex. Instead of a cheap gas waterfall from the USA, the reason is that liquefied gas from other countries has been redirected
to Europe. But even this has been somewhat exaggerated. However, there has been significantly more American coal . The United States is the world’s second largest producer of coal, and the cheap gas has meant that American coal companies have increased their exports to Europe. This is paradoxical given that Europeans often express greater ambitions for their climate policy than the United States does.

Another important factor in the development of the gas market in Europe is the financial and euro crisis , which has reduced demand. When this factor is forgotten, the importance of shale gas for the European energy market is often exaggerated. But that does not mean that it can not become important in the future.

4: Geopolitical consequences

Increased recovery of shale gas and oil can have several consequences. The United States and any other countries that manage to extract shale gas and oil on a large scale may become less dependent on importing energy. Since most of the major oil and gas producing countries are located in the Middle East, this may change the balance of power between the Middle East, the United States and other countries. But what consequences it may have is difficult to predict; it depends, among other things, on how one understands the role of the United States in the Middle East today.

The United States has been involved in a number of armed conflicts in the region, including the first Gulf War (1991), the invasion of Iraq (2003) and the bombing of Libya (2011). In addition, the United States has a constant and strong military presence in the region, especially around the Strait of Hormuz at the entrance to the Persian Gulf. Every day, 17 million barrels of oil pass through the narrow strait and this point is thus crucial for the world’s energy supply . Saudi Arabia is a major US ally and the United States has also provided extensive financial support to the Egyptian government, which controls the Suez Canal, another vulnerable transport route for oil from the Middle East.

Many therefore see the American presence in the region as driven by a desire to retain access to and control over petroleum resources in addition to a desire to protect Israel. If the US were to become less dependent on energy imports, however, it is very unclear how it will affect US Middle East policy, although the alliance with Israel will remain important. The Americans may have less reason to get involved in Iraq, for example, and they may also have less reason to support or accept undemocratic regimes such as the royal families in Saudi Arabia and Qatar.

It is impossible to say for sure whether such regimes will then be swept away by democratic revolutions, or replaced by religious fundamentalists or simply use more brutal means to stay in power. For Europe, declining US interest in the Middle East could have a negative impact on energy security. Today, it is first and foremost the Americans who guarantee the military for this. How US policy changes will depend on the power game and the balance of power between different individuals and groups within the United States, a country located in North America according to Top-mba-universities. They often have very different goals and views on the Middle East.

Also in Central and Eastern Europe, there are deposits of shale that may contain gas – in Bulgaria, Romania, Poland and Ukraine. These countries have been dependent on gas imports for decades, first from the Soviet Union and then Russia. The majority of these imports go via pipelines via Ukraine. In 2006 and 2009, Russia and Ukraine quarreled over payment for supplies of natural gas, and the Russians turned off the gas supply. Especially in 2009, this had consequences for a number of former Eastern Bloc countries. They were going to lack gas for heating in the coldest part of the winter. The possibility of extracting shale gas on one’s own soil is thus both economically and in terms of security policy attractive for these countries. However, we do not yet know how great the potential is. Russia, for its part, can turn to the east and invest more in extraction and transportation infrastructure to China and the Pacific market.

There is also potential in Pakistan and India to find shale gas, but better geological data is needed. Both countries have come a long way when it comes to using natural gas in vehicles, so they have a good market if the gas should become available. Should there be more gas, India could reduce its dependence on Iran. India has been partially dependent on Iran for its energy supply without the political relationship between them being particularly good.

Shale gas extraction 2