Published: 24 October, 2012, 17:44
Reuters / Kacper Pempel
Russia’s President Putin urged the country’s gas monopoly Gazprom to revise its export policy, as the “shale revolution” and the development of liquefied natural gas will seriously eat into the country’s export revenues.
Experts agree that ‘alternative commodities’ have already started to reshape the market, with the US posing tough competition to Russia.
“I ask Gazprom to report on the key principles of its export policy at the next meeting, and the Energy Ministry should present an adjusted general development scheme for the gas industry until 2030, as well as the Eastern Gas Program,” said President Vladimir Putin at a meeting of the presidential commission for the fuel and energy sector on Tuesday.
“Such new players [in the gas market] as the United States and Canada have already started to move.In the US, new technologies allow for profitable shale gas production…Politicians, experts and businesses are talking about a real “shale revolution,” Putin added.
“The US is a serious rival to Russia in a gas market,” as the country’s reserves of shale gas stand at 24trln cubic metres, compared to 30trln cubic metres of traditional gas reserves in Russia. Given that shale commodities are really booming, especially in the north of the US, the country can outpace Russia in the world energy market in another decade, Valery Nesterov, energy analyst at Sberbank Investment Research, told Business RT.
For the US economy itself the shale oil and gas industry is a real locomotive, providing an additional 3.5mln jobs, according to Sberbank Investment Research expert.
Should “a shale revolution” really take place, it’ll seriously reshape the world energy market, where traditional energy sources could be replaced by cheaper shale commodities. This will hit Russia’s budget hard, as oil and gas revenues provide for about 80% of the entire Russian budget. “That’s why it’s very important for Russia now to have official information and up – to – date data about extraction of shale gas in the US, which can be done by getting a report from the US Department of Energy,” RBC daily quotes its sources close to Russia’s Accounts Chamber as saying.
Another new trend has also long been underway – the rising trade in liquefied natural gas (LNG), Putin said. “We are simply obligated to take these trends into consideration, to clearly imagine how the situation will develop not just in the next two to three years, but throughout the upcoming decade,” Russian President concluded.
“Active extraction of shale gas in the US and the analogous intentions in Europe could harm Russian exports because of the high competition from the suppliers of the alternative fuel,” sources from Russia’s Accounts Chamber told RBC daily.
Gazprom told RBC it didn’t plan to develop any projects dealing with extraction of shale gas.
In the mid-term Russia is due to remain the biggest gas exporter to Europe, with European countries remaining a key consumer of Russian gas, the International Energy Agency (IEA) said in October. The US gas exports will soon equal a third of that from Russia, with the Asian demand growing really fast.
By 2035 the US could become the leader in the world gas market, pushing Russia into 2nd place, the IEA said in May this year. According to the Agency’s forecast, Russia could produce about 784bln cubic meters of gas, which will compare to the US figure of 821bln cubic metres. Another Asian giant – China – should come third, where extraction of gas is forecast to skyrocket 5 fold during the next 25 years. Australia, India, Indonesia, as well as Africa and the Middle East are also expected to come to the forefront of the world gas market. However, Europe is set to suffer as growing demand is expected to be coupled by shrinking extraction, the IEA concluded.
Japan is the latest country where a shale revolution being underway. The big energy consumer said in early October it had uncovered the first domestic shale oil deposits.
Categories: Health Technology News