WHERE - Hydrofracking: What Everyone Needs to Know - page 32

such as favorable land and mineral laws, which spurred the production of shale gas
in the United States and Canada. 13
Thanks to the recent glut in shale gas, the United States has started to export
natural gas abroad. Now the export of technical and financial know-how is begin-
ning to follow suit, though it will take other nations years to build up the infrastruc-
ture necessary for efficient shale oil and gas programs of their own.
Many countries are building pilot programs and experimenting with hydro-
fracking methods. Western Europe, the US EIA estimates, has some 639 trillion
cubic feet of shale gas resources, which is more than four times the reserves of
the Marcellus Shale. 14 Hydraulic fracturing was conducted in Germany, Holland,
and the United Kingdom in the 1980s. In 2012, Cuadrilla Resources, a UK shale-
gas explorer, calculated that its license area in Lancashire contains some 200 trilli-
on cubic feet of natural gas, and estimates there is more shale gas in the UK than
the entire reserves of Iraq. 15 (The UK uses roughly 3 trillion cubic feet of gas per
year.) As Italy, Poland, and Lithuania build terminals to receive liquefied natural
gas (LNG) tankers—long ships outfitted with distinctive spherical tanks—imports
to the EU are estimated to grow by 74 percent by 2035. 16
Eastern Europe's interest in hydrofracking has a political subtext. The first hy-
draulic proppant fracturing was carried out in 1952 in the Soviet Union, while
Ukraine, Poland, and Mongolia are planning to tap shale basins, both for economic
reasons and as a way to reduce their energy dependence on Russia, with whom they
have had a fraught history. 17
As for Russia itself, Vladimir Putin is eyeing America's shale boom with a mix-
ture of deep suspicion and growing interest. Energy companies account for half the
value of the Russian stock market, and their revenues help to prop up the govern-
ment. Gazprom, the state-backed energy company with a monopoly on natural gas
exports, has long used its dominance to get its way: Russia cut off natural gas to
Ukraine twice, in 2006 and 2009, when contract negotiations grew heated. But as
America uses its shale reserves to become the world's biggest gas producer and a
likely gas exporter, the balance of power is shifting. America's gas glut is depress-
ing prices on the world market, and sending unneeded gas from the Middle East
to Europe. Bulgaria recently negotiated a 20 percent price cut in its new 10-year
contract with Russia. 18
Alexey Miller, the Gazprom boss, says, “We are skeptical about shale gas,” and
has derided the gas boom as a “myth” and “a bubble.” But Gazprom is in trouble:
its 2008 market capitalization of $367 billion had shrunk to a mere $78 billion five