RICE (US) — Increased natural gas production from shale in the United States will slash Russia’s ability to hold power over European customers dependent on the country for their energy needs.
A new Baker Institute study says that by 2040, Russia’s natural gas market share in Western Europe will be as low as 13 percent, down from 27 percent in 2009.
“The geopolitical repercussions of expanding U.S. shale gas production are going to be enormous,” says Amy Myers Jaffe, fellow for energy studies at Rice University.
“By increasing alternative supplies to Europe in the form of liquefied natural gas (LNG) displaced from the U.S. market, the petro-power of Russia, Venezuela and Iran is faltering on the back of plentiful American natural gas supply.”
The study finds that timely development of U.S. shale gas resources will limit the need to import LNG for at least two to three decades, reducing negative energy-related stress on the U.S. trade deficit and economy. By creating greater competition among gas suppliers in global markets, shale gas will also lower the cost to average Americans of reducing greenhouse gases as the country moves to lower carbon fuels.
The shale gas revolution is not a transitory occurrence, the study argues. U.S. shale production will more than quadruple by 2040 from 2010 levels of more than 10 billion cubic feet per day, reaching more than 50 percent of total U.S. natural gas production by the 2030s.
“The idea that shale gas is a flash-in-the-pan is simply incorrect,” says Kenneth Medlock III, fellow for energy and resources economics and co-author of the study. “The geologic data on the shale resource is hard science and the innovations that have occurred in the field to make this resource accessible are nothing short of game-changing.
“In fact, we continue to learn as we progress in this play, and it is vital that we understand and embrace the opportune circumstances that shale resources provide. U.S. policymakers should not get diverted from the real opportunities that responsible development of our domestic shale resources present.”
Other findings report U.S. shale gas will:
- Reduce competition for LNG supplies from the Middle East and thereby moderate prices and spur greater use of natural gas, an outcome with significant implications for global environmental objectives.
- Combat the long-term potential monopoly power of a “gas OPEC.”
- Reduce U.S. and Chinese dependence on Middle East natural gas supplies, lowering the incentives for geopolitical and commercial competition between the two largest consuming countries and providing both countries with new opportunities to diversify their energy supply.
- Reduce Iran’s ability to tap energy diplomacy as a means to strengthen its regional power or to buttress its nuclear aspirations.
The study was funded by the U.S. Department of Energy.
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