It is now become increasingly obvious what is behind Vladimir Putin´s recent outbursts against shale gas: The US-led shale gas revolution has already put the government controlled Gazprom on the defensive. Gone are the days when Putin and his henchmen thought that Russia would be able dominate the European, and indeed the global energy markets through Gazprom and Nord Stream.
The latest proof of the completely new situation is the fact that the development of Russia´s gigantic arctic Shtokman gas fields has again been delayed. Gazprom and its Norwegian and French backers had counted on exports from Shtokman to the United States, but the sharp increase in the U.S. shale gas production means that there is no market in the US for Russian gas. And when Poland and other countries get their shale gas production going, it will be not be profitable to pump expensive Shtokman gas to Europe either. In the long run even exports to China are questionable when China begins to seriously exploit its own shale gas resources.
Gazprom and its European partners are now hoping to get tax breaks for their expensive Shtokman project. However, not even subsidies and tax breaks will make drilling in the difficult arctic environment profitable, when there is more than enough unconventional gas on the world markets.
Here is just one example of what the shale gas revolution means for the US:
The stats on domestic natural gas are also eye-opening. Recoverable natural gas in North America is estimated at 4.2 quadrillion — or 4,244 trillion — cubic feet. At the current rate of consumption, that’s enough natural gas to power North America for the next 175 years. And it means that our continent has more robust gas reserves than Russia, Iran, Qatar, Saudi Arabia, and Turkmenistan — combined. Roughly 272.5 trillion cubic feet of that total are in the United States. … In the late 1990s, pundits were predicting a sharp uptick in natural gas prices due to a decline in reserves. Just a few years later, American production actually increased dramatically. The reason? Human imagination bred breakthrough technological innovation. Developers built new extraction tools, making it economical to tap into reserves buried in shale and other tight rock formations. (Forbes.com, Robert Bradley)