The Shale Revolution Goes Global

European industries and some European governments have recently begun to recognise that the unconventional gas revolution is no longer confined to North America, but is spreading globally. The energy revolution is having a big impact on the overall economic competitiveness of the US economy and industries towards rivals in Asia and Europe. Cheap shale gas also calls into question the renewable energy policies of the EU, particularly those of Germany. Foreign investments in European petrochemical companies are already shifting from Europe to the US. --Frank Umbach, Geopolitical Information Service, 19 March 2013

Natural gas began flowing out of the Tamar gas field off the coast of Israel yesterday, in a sign of Israel’s changing position in the global energy landscape. The Tamar field is the smaller of two adjacent reservoirs, and developing it was the largest infrastructure project in Israel’s history. Together, the Tamar field and its larger neighbor, named Leviathan, are among the largest offshore natural gas discoveries in the past decade. Beyond this milestone, the Tamar and Leviathan fields will change Israel’s position in the geopolitical and energy world. --Walter Russell Mead, The American Interest, 31 March 2013 Looking at the global energy landscape generally, things are changing. Once big consumers of foreign energy, countries like the US and Israel are exploiting domestic sources of oil and gas and becoming more self-sufficient. And less beholden to turbulent or unfriendly countries like Venezuela and Nigeria. As this happens, countries like Russia and Saudi Arabia, which in the past were important and rich because of their energy riches, are going to find their positions in the energy world eroded. --Walter Russell Mead, The American Interest, 31 March 2013

Russia is gearing up for an oil boom on the same scale as the US, as the techniques that sparked the shale revolution are applied to Siberia’s deposits of unconventional oil, according to one of the country’s top oil executives. Leonid Fedun, vice-president of Lukoil, said Russia, the world’s second-largest oil producer after Saudi Arabia, will be able to maintain crude output of 10m barrels a day for years to come as output from western Siberia’s Bazhenov Shale offsets declines in the country’s mature oilfields. –Guy Chazan, Financial Times, 31 March 2013 India will allow explorers including Oil & Natural Gas Corp. and Reliance Industries Ltd. to produce shale oil and gas for the first time as Asia’s second-biggest energy consumer seeks to cut reliance on imports. Under a new policy aimed at boosting domestic output of fossil fuels, companies will be allowed to extract oil and gas from shale rocks in more than 250 blocks the government has already given out, said Vivek Rae, the top bureaucrat in the oil ministry. --Bloomberg, 1 April 2013 Saudi Arabia signaled Monday that it intends to remain a world energy powerhouse for the foreseeable future, partly by exploiting new technology which has unlocked vast quantities of oil and natural gas in North America. Saudi Arabia, the world's largest exporter of crude oil, will push ahead this year with exploratory drilling of shale and other unconventional gas reserves which could be twice the size of its conventional gas reserves, which total 286 trillion cubic feet, M inister of Oil Ali al-Naimi said. --Simon Hall, The Wall Street Journal, 18 March 2013 As new dollars pour into the United States, the outflow of industries from Europe is costing jobs and weighing on decisions about ambitious and expensive green-friendly policies that critics say are contributing to the energy-price gap. Top BASF officials say that unless Europe allows a more aggressive approach to energy production, including broader use of hydraulic fracturing, or fracking, even more manufacturing will move to the United States. --Michael Birnbaum, The Washington Post, 1 April 2013 “We should not expect that the current production level of European industry will remain the same in the next 10, 20 or 50 years,” Voestalpine chief executive Wolfgang Eder said in an interview. “We will have to downsize industrial facilities in Europe in the long term.” --Michael Birnbaum, The Washington Post, 1 April 2013 Want to understand the energy challenges the world might face in the future? There are few better places to turn than this year’s BP Energy Outlook to 2030, an annual publication that shows the company’s projections for energy supply and demand over the next two decades. The three graphs below highlight some of the trends likely to define the energy landscape in the years ahead, in BP’s view. --Blake Clayton, Council On Foreign Relations, 29 March 2013 In 1929, the economic historian Abbott Payson Usher wrote that “The limitations of resources are relative to the position of our knowledge and of our technique.” The limits of available resources “recede as we advance,” he added, “at rates that are proportionate to the advance in our knowledge.” The advances in knowledge that are occurring in the oil and gas sector are allowing us to keep energy cheap and abundant. And that’s very good news. We won’t hit peak oil until we hit peak imagination. --Robert Bryce, Investor’s Business Daily, 2 April 2013

Guest Column——Bio and Archives

Items of notes and interest from the web.