On the surface, booming US shale gas production looks like the perfect solution for Europe as it reels from the energy crisis created by tearing itself away from Russian gas. But analysts say it is no panacea.
In western Texas’s Permian Basin – one of the world’s most important oil and gas production areas – gas prices actually went negative in October because output was so high that producers had to pay people to take it off their hands.
And compared to oil, “there is potential for more growth”, said Kenneth B. Medlock III, senior director at the Center for Energy Studies at the Baker Institute for Public Policy at Rice University in Houston.
“The entire reason US LNG exports are even possible to begin with is because of the shale revolution,” emphasised Eli Rubin, a senior energy analyst at energy consultancy EBW Analytics Group in Washington DC. “If it weren’t for that, the US would be importing LNG on a pretty widespread basis, competing with European countries for natural gas supplies.”
‘The problem is export capacity’
Yet analysts caution that, while LNG from US shale can help Europe amid its energy crisis, it will not single-handedly rescue the old continent.
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