The Shale Gas Revolution Accomplished Without Europe

At a time when securing energy sources seems to be a natural focus for several countries, the exploitation of shale gas, while it may seem beneficial to some, is ultimately dangerous.

The implications of the rise in exploitation of this natural resource are diverse. They apply to the economy, geopolitics and the environment, particularly in the U.S. and in China, the two major actors who are at the forefront of the movement.

The quest for energy independence is not the only way to explain the attitudes of the countries that are graced with abundant reserves of the gas, however.

Enter Poland, where a solid consensus exists in favor of the exploitation of shale gas in order to compete with Russia and France, where they are very aware of taking ecological problems into account. Such diverging opinions promise some lively debates within the European Union.

The economic factors are equally important, especially given the fact that the gas is 50 percent to 70 percent cheaper in the U.S. than in Europe, thanks to the exploitation of the country’s plentiful reserves.

Paint, Solvent, Plastic, Packaging

The competitive advantage that the U.S. market has constructed is as solid as technological progress permits, despite the fact that it uses cheap gas as both an energy source and a raw material.

Paint, solvents, plastic, packaging and other miscellaneous products are increasingly being made of gas and no longer of pure petroleum. With plastic, several industries eventually return to the U.S. after a short detour to China, an example being the toy industry.

It is in the U.S.’ basement that the world’s new geopolitical balance is being developed. By reducing U.S. energy dependence, shale gas contributes to the renewal of a strategic focus for the country: the stabilization of the oil trade with Middle Eastern suppliers.

This stability not only includes a stronghold on maritime passages, but a presence within the countries as well.

In the present economic climate, which justifies a decrease in external interventionism in order to focus on internal affairs, the U.S. seems destined to enter a phase of isolationism similar to those of the past, a tendency that has become cyclical across the Atlantic.

Granted, the U.S. need for petrol is enormous. But the U.S. is a country whose oil and gas production is expanding at an increasingly rapid rate.

Canada and Mexico notwithstanding, some specialists are now proclaiming confidently that North America could attain complete energy self-sufficiency in a few years. The threat posed by the U.S.’ rejection of its stabilizing role in the Middle East is therefore a real and relevant one.

Although powerful, the term “threat” deserves to be used to describe the situation. And this threat is relevant to the rest of the world which, for several years now, has benefited from the Gulf’s oil, thanks to the U.S.’ securing of the zone. China is the primary beneficiary of this stability.

Gulf Petroleum Is Exported to Asia

Its dependence rises every day and, as of late, most of the Gulf’s product is exported to Asia. This is a new development, but China will very soon have to face the responsibilities that come along with its new role. With only one aircraft carrier, the Chinese navy is far from being able to stabilize naval routes that would permit proper transfer of the Gulf’s oil.

The development of a permanent fleet in order to assume these newfound responsibilities is only a matter of time. But the stabilization of a zone like the Gulf is not possible with only a naval fleet.

As such, shale gas, about which it is legitimate to speak of revolution, could be a problem for China, despite the paradoxical fact that this gas is first and foremost seen as a new resource to exploit and is quite abundant underneath Chinese soil.

China’s Negotiating Power

While the opinion of the American public favors reducing interventionism in upcoming years, it is not unsafe to bet that the U.S. presence and even action will be maintained in the Middle East.

This will have less to do with safe access to oil than in previous years. There are also several reasons why negotiating with China would be beneficial.

Continuing to assure the stability of the zone will not be that expensive with regard to the capacity to ask for concessions from China in exchange for services provided (such as backing off U.S. allies in Southeast Asia, commercial negotiations, access to choice territory…).

At first glance, the world is not at risk of great change on a geopolitical scale due to the shale gas revolution — the U.S. will continue to police the Gulf.

Realistically, relations between such big actors will no doubt majorly evolve. Europe — not exactly a big player in energy exploitation — will have to be satisfied with the role of spectator.