Environmental Engineering Reference
In-Depth Information
modest fraction of those could be brought to production, China might
be able to forgo fraught gas trading relationships with Russia or with
troubled countries, like Iran, in the Middle East. 33
For all the promise, though, it's far too early to count on a shale gas
boom beyond U.S. borders. Opposition to drilling is even more intense
in Western Europe than it is in southern Ohio or upstate New York—
and France appears to have more shale gas than all but eleven other
countries in the world. Environmental protests have also met ef orts to
drill for shale gas in the Karoo region of South Africa. 34
Perhaps even more important, though, the U.S. shale gas boom
has been facilitated by a particularly at ractive investment environ-
ment. Private natural gas producers, rather than the government,
make investment decisions, while open markets let entrepreneurs
easily sell shale gas to the highest bidder—both conditions that are
distinctly missing in China and (in the lat er case), to a good extent,
in Europe. 35 Well-developed i nancial markets let producers sell their
production several years in advance; they can then use those contracts
as backing when they go out to i nance their projects. 36 Resources are
mostly owned by individuals, not governments, keeping politics a step
removed from development.
None of these features are present in other places (save Canada)
where there's lots of shale. And some of the countries where shale gas
might develop don't just lack a positive environment for development;
they create a downright negative one. Argentina, for example, keeps
domestic gas prices artii cially low, which makes a mess of economic
incentives for drilling. It also doesn't help that the government periodi-
cally makes it impossible to take money out of the country, or expropri-
ates the holdings of foreign oil and gas companies, which scares of all
but the most intrepid and risk-hungry investors.
h ere is another way, though, that many imagine U.S. shale gas could
upturn global markets and geopolitics: American exports of LNG. With
natural gas prices overseas at levels many times those in the United
States, enthusiasm for exports has been strong. In July 2012 Mark
Mills, a fellow at the Manhat an Institute, published a study whose title,
“Unleashing the North American Energy Colossus,” captured a broad
slice of sentiment about the potential of American energy exports. 37
 
 
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