Is Europe Missing Out on an Economic Boon?
A well-known case study involves the regulatory environment in the United Kingdom, which now has tight controls on the practice after fracking caused earth tremors. Other countries such as France have prohibited the practice altogether until more research is done, or control of the government changes hands.
While it’s true that the practice involves environmental risk, there is an upside to using natural gas instead of coal. Natural gas produces about 50 percent less carbon when burned than coal, and as bad as fracking may be, coal mining is also an environmental nightmare. The alternative is to import the fuel, but that can be an economic handicap in a region that is fighting tooth and nail to stay its ground against economic headwinds.
The Organisation for Economic Co-operation and Development predicts that Euro-area GDP will contract 0.1 percent in 2013 before growing just 1.3 percent in 2014. To say the least, the region could use an economic boon. Observing the upside that the U.S. has enjoyed from shale gas, many are wondering why European countries don’t jump on the opportunity, or simply shrug their shoulders and turning to other regions.
“Some European countries already made the decision not to go into shale gas, so naturally when they do that there will not be development,” said Mohamed al-Mady, chief executive of Saudi Arabia’s Sabic, the world’s biggest petrochemical group by market value, in an interview with the Financial Times. “I think the trend you will see [is] more investors going to North America, China and the Middle East.”
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