Shale Gas revolution for Europe?

Map of shale gas basins in Europe - The Economist

A deep change in the Economics of energy in Europe may be around the corner. Even if shale gas does  not become as important as in North America, we expect it will at lease have one good effect in the medium term: force Russia to lower prices.


Natural gas costs now in the US 25% of its price 5 years ago. Europe has a lot of work to do, outside the United States, shale extraction is still in its infancy.

Nevertheless it is enough for LNG (liquefied natural gas) from the North America to start arriving in European ports in reasonable quantities to create a price revolution.

Map of shale gas basins in the US - Der Spiegel

Shale gas is placing the US on the road to energy independence - Der Spiegel / EIA

Peak Oil - scaremongering again

Aljazeera has jumped on the peak oil bandwagon! Their feature "the scourge of peak oil" is alarmist and lacks economic justification. Dahr Jamail and the chaps in Doha did not do their homework this time, drafting a scaremongering senseless piece.

World oil production - 1970-2010

Many of the arguments proposed have long been discredited by economists and the concept is bogus modelling. The Hubbert curve is a mere Malthusian curiosity. We have reserves for decades and as the prices increase, so will reserves, as new exploration is justified and deposits with higher extraction costs become viable. Scarcity of cheap reserves may slowly rise prices, but brings other reserves to the market. New technology changes both supply and demand and substitution cannot be ignored. Economic exhaustion is not anywhere near, and economic exhaustion will precede physical exhaustion.

Anyway, today's prices already include the best available information about the market, so they will not have exponential growth as prophets of doom try to spread to attract followers.

Marion King Hubbert - geoscientist who introduced the Peak Oil concept

India doubles its Uranium reserves

Uranium ore

India's Atomic Energy Commission disclosed a new uranium discovery in Tummalapalle in Kadapa district, state of Andhra Pradesh, with reserves of 150.000 tonnes effectively doubles India's Uranium reserves.

India's nuclear energy programme is under-supplied and the new source is most welcome to keep it viable and limit its dependence from foreign suppliers. On the nuclear weapons front, India's pursuit of a nuclear triad is also increasing demand: soon the first of its Arihant class of nuclear-powered, nuclear-armed submarines will be operational, more will follow.

Clearly good news for India, but may yet prove to be a factor in global instability. India first nuclear weapon was designated PNE, for 'peaceful nuclear explosive', such irony may fail to make its neighbours smile.

Pakistan, although lacking indigenous uranium, may feel compelled to compete. With the country on an uncontrolled downward spiral, some in Islamabad may take less than reasonable decisions, and more seriously we are all wondering when will a Pakistani nuclear warhead reach the wrong hands. China too, may see this as a threat, specially in terms of projected power and rivalry in the oceans, though we shouldn't expect any actions from the People's Republic that defy either prudence or intelligence.

INS Arihant - Indian nuclear submarine under construction (based on the Soviet Akula class)

Oil below $34

WTI is now below $34/bbl!!
Enjoy while it lasts!!
Drive, fly... splash on your carbon footprint this Christmas!

Oil Derricks - Christmas