The unconventional gas revolution and the prospects for Europe and Asia

The development of unconventional gas exploration in the USA, in particular shale gas, caused a revolution in the American and the global gas markets. The regional-wide use of unconventional gas resources could stabilise the natural gas demand and the energy supply security of European and Asian countries. But traditionally, almost all gas contracts in Europe and Asia are linked to oil because of the demand for stable, long-term contracts. Furthermore, in many Asian countries, large state-owned enterprises dominate their national gas markets, leading to little competition and incentives to reduce gas prices. In Europe, the expansion of unconventional gas is facing grassroots opposition from environmental groups who are concerned about ground water safety, adequate waste water management, seismic events and greenhouse gas emissions. This article examines the rapidly changing natural gas markets and the role and prospects of unconventional gas as well as the impacts it may have on European and Asian energy security. It highlights, in particular, the geo-economic and geo-political implications and discusses whether the US unconventional gas revolution can be duplicated in Europe and Asia.