Anouk Mulko
SMIB
The challenges induced by the petrol/shale gas war
At a time when energy security has never seemed so random for many countries, exploitation of shale gas contributes to a redistribution of the cards probably welcome for some but that remains dangerous.
Who would have thought ? Less than ten years ago, the gas market was determined by the American Imports . And today the United States are on the contrary point of becoming exporters . This reversal modifies in depth the world geopolitics. Shale gas being theoretically exploitable in many regions of the world, especially in Europe and China, other major actors of this market could emerge soon, while some countries and regions, like Russia or the Middle East, might be weakened by this new market.
From the after-war to the beginning of 2010 years, the natural gas market was structured around import-export flow going from producers regions ( ex-USSR, Middle-East) to big areas of cosumption : United-States, Europe, China. This scheme, materialized by pipeline grid, diplomatical and financial arrangements, involved heavy investments, long-term projects and therefore predictability. The construction and the security of global supply corridor have led to alliances and relationships of dependancy between countries.
No one saw the huge upheaval coming, and the energy flows are being reoriented. Everything starts from the United States, where the Texan engineer George Mitchell, discovered how to adapt the technic of hydraulic fracturing to the marl rock. Then the US company Devon Energy, which in 2005 develops horizontal drilling, and have made possible the shale gas extraction.
The forecasters announced that the United States would be 99% self-sufficient in energy by 2030, when in 2005 they produced only 70% of their consumption. The fundamental role of energy in American foreign policy in recent decades gives the measures of the upheavals coming. According to the 2012 “World Energy Outlook” of the International Energy Agency, it will occupy the same place for oil in two or three years, surpassing Saudi Arabia. The United States seem destined to enter an isolationist phase such as those that were known in the past.
If it last, the readjustment of the energy mix components promises cascading effects. The relations between Europe and Russia illustrate this fact very well. At the initiative of some states, such as Germany, the EU has spared Moscow, large amount of political, security or strategic issues: until recent years, 40% of European imports of natural gas were supplied by Gazprom . The walk of the United States toward energy independence indirectly changed all that, especially via Qatar. The emirate indeed ranks first among world exporters of liquefied natural gas (LNG) , which is transported by sea, not by pipeline before being regasified once reached its destination. Part of the production was destined to American terminals. But Washington is less and less demanding, significant volumes of LNG are expected to shift towards Asia, and also to Europe, enabling the Union to reduce its dependence on Russian gas. Several LNG terminals have also been opened or planned in Greece, Italy or Poland, which aims to serve as a central gateway to Europe for LNG, Qatar or otherwise.
Russia will certainly be a lot affected by this revolution of the shale gas, Gazprom has to stop thinking about the very expensing, long lasting contract and be in the logic of the market: “spot” price, who will not be indexed on the petrol price. But Moscow predicted it and went to the Asian markets ( China, South Korea, Japan) , very demanding for alternative energy to nuclear power after the March 2011 tsunami and the disaster of Fukushima. This encourage Moscow to move from pipeline policy, which always had huge political consequences and created a high dependence to LNG, more flexible and adaptable. A prospective study in 2040, is still optimistic for Russia: "The breakthrough of shale gas has pushed to two or three decades, the threat of missing oil reserves and gas available in the United Nations at an acceptable cost” said Mitrova.
Vladimir Poutine knows that the shale gas represents a real danger for them. In consequence, it can be a good way to link a new and real partnership with this country. They are the only one offering an alternative, still more expensive, to the exploitation of shale gas, but only if they agree to reduce the price of conventionnal gas. This would mean for Russia, to renounce to use the energy dependance of their clients as a leverage. Such an evolution, seems not so unrealistic if we are taking account of the necessity for Russia, to continue to sell a resource on which depend a big part of his economy. The countries of Eastern Europe see in the shale gas an opportunity to get rid of Russian gas dependence. Poland’s energy have been built in conjunction with Russia, 70% of the gas they are using are coming from them. Last years have been punctuated with gas cuts at the time of contract renegotiations in order to put pressure on them. But it seem that Poland would have a large reserve of shale gas. Polish are seeing an historic opportunity to get away of Russian hegemony.