RUNNING ON EMPTY: UK Shale Struggles A Reminder Of Why America Succeeded.

America remains the sole state to capitalize on its shale oil and gas resources, and difficulties in countries like the UK and China remind us that the shale revolution was more than just the result of applying the dual techniques of hydraulic fracturing and horizontal well drilling to underground hydrocarbon reservoirs. Rather, the US energy revolution was the product of a mature oil and gas drilling industry, replete with robust supply chains. The boom depended on a unique set of mineral rights that provided landowners with a financial incentive to invite drillers on to their land, on a deep pool of capital, and on a variety of small wildcatting firms willing to take on the risk of drilling exploratory wells. . . .

This isn’t to say that shale can’t be tapped elsewhere, just that it’s going to be a more difficult process than many world leaders not named Obama might like. But the race to produce even a pale imitation of America’s experience is more important to European energy security now than ever, given the situation in Ukraine. Europe sources nearly a third of its natural gas from Russia, and that’s a lever Brussels is keen to rid itself of as it maneuvers against Moscow. Lawmakers in Washington have made the case that American LNG could help on that front, but so too could the continent’s significant domestic supply of shale gas. The Crimean crisis may be the strongest incentive yet for Europe to frack.

Frack now, or regret it later. By the way, I recommend Gregory Zuckerman’s The Frackers on this. I interviewed him here.