It will be slower than in the US, but shale gas will also be a game changer in Europe. Even though Russia has huge reserves of shale gas and shale oil, they would also prefer that the transition to shale gas should not go too fast. They have so much invested in the Natural Gas infrastructure that they need to keep the sales of natural gas going to ensure a return. Gazprom has the enviable dilemma of protecting an existing revenue stream by preventing the too rapid establishment of another revenue stream. One problem for Gazprom of course is that shale gas is much more widespread across Europe and their virtual monopoly with Siberian natural gas will be threatened.
In any case the energy scene is changing fast and the planned investment in additional gas pipelines under the Baltic Sea from Russia to Germany have been delayed by Nord Stream.
Swedish Radio News: The gas pipeline consortium Nord Stream are delaying their plans for one or two more pipelines under the Baltic Sea. According to Nord Stream’s adviser, Lars Grönstedt, the shareholders want further analyses of the rapidly changing energy market.
The USA has quickly become almost self-sufficient in energy because of its own shale gas , and it has led to Europe buying more cheap coal than before. “I can not comment directly on the shareholders’ deliberations. But I can guess that since gas has changed to such an extent just the last twelve months , it needs some deeper analysis” says Lars Grönstedt.
Nord Stream’s current pipeline has two channels extending from Vyborg in Russia to Greifswald in Germany under the Baltic Sea to deliver Russian natural gas to Europe.
Nord Stream had planned to add one or two further gas pipes and held public information meetings last spring – including on Gotland. It is a project that is expected to cost about $9 billion, and in Sweden alone could create some two hundred jobs during construction.
Nord Stream’s shareholders, five European energy companies , including Russia’s Gazprom , have postponed these plans. The changes in the energy market as Lars Grönstedt mention, are due in part to America’s increased shale gas .
I suspect that Gazprom’s best way of maximising revenues is by holding up current natural gas prices but not so high that the development of shale gas is accelerated and not so high that gas users shift to coal (as the large utilities are doing in Germany). A delicate calculation and which would require a slow development of their gas distribution pipelines.
But for the private consumers, the lowest cost would be if shale gas development was speeded up.