1 February 2013, 20:13

Shale gas boom may prove hollow

Shale gas boom may prove hollow

America’s shale gas boom has given rise to hopes, bolstered in part by assessments from the International Energy Agency, that by 2014 the United States will become self-sufficient in natural gas. Russian experts believe that these hopes are premature.

Dr Alexei Gromov is deputy head of the Energy Strategy Institute:

"True, the share of the Middle East in America’s natural gas supply is down from two thirds to less than one half. At the same time, plans to bring this share to nil by 2017 sound unrealistic. The pace of shale gas development is just not enough."

America’s shale gas has brought domestic prices significantly down, while international ones continue to soar. This simple calculation has prompted Shell and the Kinder Morgan pipeline company to embark on a project to build a terminal for exporting liquefied shale gas in Savannah, Georgia.

We have an opinion from Dr Konstantin Simonov, head of the National Energy Security Foundation:

"Exporting shale gas would undermine economic recovery in the United States by driving up domestic prices of this commodity. Today they are quite low. But exporting gas to foreign markets could send them sky high."

Interestingly, the International Energy Agency has indicated that America’s shale gas production is likely to peak around 2020. This means that the US will never become a long-term exporter of natural gas.

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