Rod Janssen recently spotted an article by the FT's Pilita Clark picking up on an IEA report suggesting that energy cost differentials will see Europe lose out big time to the US over the next couple of decades. It is undeniable that the differential exists now and is a major headache for EU energy intensive companies, but will it last 20+ years? One of the major factors causing this effect is the fact that the US is decoupled from the international gas market. Hence indigenous shale gas has nowhere to go but the US, so depressing prices. But how long will it be before there are sufficient LNG export terminals to drag US gas prices closer to those in the EU?
I suspect that a lot of the political enthusiasm for UK shale gas is driven by a concentration on production costs not on market price. I can't see a US-style boom happening over here.
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