Shale Gas In Europe: Preserve Or Consume?

shale gas

The industries have got a boost with Shale Gas slicing the cost of natural gas by as much as 65%. This reduction in costs has consolidated the industries but also poised challenges for the industries across the globe. The closest competitor being the Industries in Europe have been affected adversely by this added advantage to the US industries. Companies are refraining from investing more money as the labor and natural gas both cost more than the competitors.

European Chemical Industry faces severe threats to the extent where their survival is at stake. Petro-chemical industries attract major investments in the present market scenario. In such competitive market the natural gas costing to the US has reduced from 12$/MBTU to 3$/MBTU whereas the costing for natural gas which is the life and blood of the industry has been oscillating between 8$/MBTU – 11$/MBTU. Such a huge price differential definitely attracts investment in favor of the US companies. US companies have undertaken mass production owing to reduced costs and thus have hence far established their supremacy on both the vital fronts viz. Costing and Quantity.

Developing Shale Gas reservoirs in Europe would be pretty costly in comparison to the USA owing to more expensive cost of land. Access to shale gas would still help the chemical industry in Europe nonetheless. Limited shale gas productions could also help European industry to scale down costs to a more competitive margin. This would allow European chemical industry to strengthen its operations as well as achieve a trade balance with the competition. Availability of Shale Gas inside the continent would enable stronger bargaining capacity with the current suppliers of natural gases viz. Russia, Qatar & Algeria. Neglecting Shale Gas manufacturing could even lead to further weakening of the European Economy and strengthening of the American economy.

Wide Spread Affects
Shale gas production has not only affected the chemical industry in Europe but also other allied industries. Increased production capacity and reduced costs have encouraged US companies to hire more people thus, great no. of job openings are available in the US. The scenario is inversely reflected in Europe with the unemployed people percentage rising to record breaking figures.

Risking The Environment
Shale gas is obtained by a process called fracking which involves blasting the shale rock using water, sand and a set of chemicals. This process emits methane gas into the atmosphere. Methane is more dangerous than carbon dioxide and thus, public opposition against fracking has been constant and staunch.

Economists give a green signal to Europe for initiating shale gas production in Europe while Environmentalists rigidly oppose the process from taking effect. It is believed processes like fracking prevent the regeneration of the natural resources.

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Environmental Concerns

Many environmentalists oppose the burning of fossil fuels as a matter of principle. Developing shale gas, they argue, will undermine efforts for energy savings and slow down the development of renewable energies. More particularly, environmental campaigners oppose fracking, which involves blasting water, sand and potentially dangerous chemicals at high pressure into the rock. The process of obtaining shale gas is also blamed for rising number of cancer patients more frequent earthquakes and also very harmfully adding to further degradation of the ozone layer, which leads to rise in the Global warming levels.

Ban On Shale Gas Extraction
Shale gas extraction has been prohibited in France where the maximum reserves for shale gas can be found. Netherlands have also enforced a ban on the shale gas extraction. But, with the increasing economical pressure the need to change the environmental policy could be on the cards already.

Closing On The Gap
Moratoriums on extractions of Shale gas had been lifted despite the environmental friendly opposition in order to cut down on costs of natural gas and bridge up the huge gap between the costing of the US industries and the European Industries. The larger collection or reservoir of shale gas is obtained the quicker and better result on trade performances shall be seen. In Europe Shale Gas manufacturing stage is still in the primitive stages whereas it is more advanced in the USA.

China: The Next Big Thing?
Carbon emitting coal continues to be the chief source of energy generation in China in present day market though 70% more capacity to produce shale gas than the US itself is present and discovered in China. This can easily make China the next big threat to the chemical industry in Europe as China has the availability of Cheap raw material and cheap labour ready at their disposal.
shale gas
Extracting shale gas in China is presently in the earlier stages of development. If USA supports China by providing guidelines to tap shale gas reserves then the game shall spin around on its head and with China replacing USA on the top slot.

In contrast to the US and China market the situation does not look too helpful and improving soon in the future in the USA. According to European legislation the mineral rights are enjoyed by the government thus, limiting the land owner’s interest in such projects. Whereas in USA and CHINA the land owners are given a reasonable share in the earnings thus, leading to interest of the land owners remaining in the project and healthy development of the state and country on the whole.

Profitable Resource
Owing to the presence of shale gas the electricity consumption of US has gone down by 4% where as in the past 5 years, Europe has experienced a surge of 12% in the power consumption chart.

If a method via which shale gas can be generated without harming the environment is discovered the production of shale gas can definitely prove to be a boon. The desperate times European countries are going through can be improved if resources of shale gas are exploited and utilized to the benefit of the country and the industry.

Shale gas can definitely be a resource to consume if the harmful side-effects can be negated and this could lead to reduction in costs of the natural gases and thus allow European companies to withstand the onslaught of competition they face from the US industries.