America is the new energy El Dorado – what about Europe now?

America rapidly transforms from the energy problem child to become the new energy El Dorado. The economy is pimped by all the investment going the other side of the Atlantic. The population is blessed with much cheaper fuel and let’s not forget – the environment does better than any time after World War 2. Why can’t we have that in Europe?

Not a week without headlines from the new Mekka of energy, the United States. I remember well when I started in the Natural Gas business. America was the place that got every Natural Gas exporter of repute salivating as it promised an endless market and astronomic returns. Everyone with a whiff of Natural Gas to sell tried to squeeze in. Absolutely everyone. It was a grand party – apparently with no morning dawning ever.

Every North America energy map featured – impossible to count – numbers of regasification terminals. Well, at least the project proposals and producers just had wet eyes when thinking of the returns the market promised.


Who’s the boss now …

Then came shale gas and in one short moment everything was different. Instead of becoming the biggest LNG importer, the US became self-sufficient in Natural Gas and will even soon become an exporter in its own right.

Natural Gas is now very, very cheap in the US and there is no good reason to believe that this trend would not persist – at least in principle. But the trend already had 3 very perceivable consequences.

Cheap Natural Gas in the US made coal the more expensive choice so the black stuff got squeezed out and now flows to Europe cheaply and in copious volumes. Here, it killed the Natural Gas market. The Natural Gas boom also attracts huge investment to the US. There is a lot of talk of a new gas age. Not a week without another billion dollar project announcement.

No surprise, cheap Natural Gas and cheap labor attracts all those who need both. That creates lots of new jobs and gives the US economy the fillip it so desperately needed. The US is firmly on the path out of this crisis.

Last, let’s not forget that especially the US was always death pitted against the Kyoto treaty and its CO2 caps and now they are the new green tiger. Natural Gas produces much less airborne Carbon but also no Particulate Matter and much less of all the other nasty stuff coming out of our smokestacks. Since the advent of shale gas, Carbon levels and all other levels of airborne pollution have sunk to new absolute lows in decades. The US does not only become much more competitive, it also becomes a whole lot greener and cleaner.

We could use some of that here in Europe but nothing of it comes our way. It’s not only because of the much harder to extract shale here in Europe. It’s most of all the attitude we show when tackling problems in general.

In the US, there quickly are burly entrepreneurs who will recognize an opportunity for what it is and invest. A healthy entrepreneurial subculture makes sure that things get done. In Europe, we just dream of being that forward thinking and energetic.

When in the US energy became expensive it created an opportunity which was seized and exploited. Many different solutions were tried – many failed but ultimately fracking proved to be one of the good beans.

Most people think that fracking is some form of new sorcery from the wild lands beyond the great ocean. I beg to differ as gas reserves are being fracked for many decades now. In the past, it was largely used on old oil and gas fields in order to give them a new lease of life. That’s called well stimulation then. What’s new is that wells are being fracked when freshly drilled and systematically so. New is also the very systematic use of horizontal drilling techniques which are also not a novelty in themselves.

No shale here, I promise ---

No shale here, I promise —

All those technologies were always considered too expensive for systematic use and were used only under special circumstances. The shale gas revolution has lowered the price for horizontal drilling and for fracking by approximately a factor of 10. This made the development o a shale gas field economically feasible. This gas glut could not have happened without the very high energy prices some years ago as they were the fundamental driver behind all those developments. High energy prices have sparked the industrial revival of the US and the consequences can be felt way beyond the shorelines of North America. There is hope for others now.

And there is more – even more important. Natural Gas has always been an excellent fuel for vehicles either as CNG or as LNG. For the first time in its history, one can get a fill on either of them at any location in the US. Many transport companies, haulers, public works companies and more and more individuals make the switch for the clean and cheap Natural Gas. A new age dawns.

How about Europe now? We tend to see great evil when it comes to shale gas and we also seem not very interested in using Natural Gas as a fuel for our vehicles. Gasoline and diesel are hugely expensive. The trip for getting a fill becomes an ordeal for many because money is tight now. And on top of it, we have to swallow all the shit we blow into the air by using waste to fuel our vehicles.

Expensive energy reduces mobility, reduced mobility is bad for the economy and consequently for the people of this continent. I still don’t see an awful lot of interest by the leading political parties.

Politicians shun the issue because they fear the debate. Fracking has gotten the smell of some form of ultimate land destroying measure because our politicians don’t take the time and patience to explain what it really means to the people. All because they don’t understand themselves. So they are populistic. All of them.

If we want to kickstart our economies we must face the energy and fuel issue. Cheap populism is not going to make people’s lives more affordable or the environment cleaner. We need clean and affordable energy and we need lots of it. They are working on real solutions on the other side of the Atlantic – no pie in the sky projections. And we need that here in Europe as well as otherwise, we are looking forward to a lost decade or two.

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