SHALE HAS FAILED IN EUROPE:

Europe has watched the American shale revolution with envious eyes these last few years, and a number of countries—from the UK to Poland to Lithuania—have attempted to replicate U.S. success. But no one has been able to manage to put together the unique set of circumstances that have helped shale flourish here in the states, and the momentum behind fracking operations is stalling across Europe. . . .

Never is a long time, and it’s possible that as fracking technology advances operators will find ways to work with Europe’s trickier geology. But shale is already a high-cost resource, and with lower crude prices threatening American operations that already have a flourishing industry behind them, it’s hard to envisage Europe kick-starting its own boom in these market conditions. The U.S. “fracklog”, booming OPEC production, and sluggish global demand are all conspiring to keep prices down for the foreseeable future, and in so doing will likely keep European shale reserves in the ground.

Moscow is the only big winner here. Putin will be heartened to hear of Europe’s shale failures because it gives him more control over his Western customers and hamstrings their ability to find alternatives to Gazprom gas. For the time being, it looks like the only shale gas Europe will be consuming will be in the form of American LNG.

Fracking technology is advancing very rapidly. But for the moment, the U.S. is way ahead of everybody. We should be exploiting that advantage.