Chatham House Report
- The 'shale gas revolution' - responsible for a huge increase in unconventional gas production in the US over the last couple of years - is creating huge investor uncertainties for international gas markets and renewables and could result in serious gas shortages in 10 years time.
- This report casts serious doubt over industry confidence in the 'revolution', questioning whether it can spread beyond the US, or indeed be maintained within it, as environmental concerns, high depletion rates and the fear that US circumstances may be impossible to replicate elsewhere, come to the fore.
- Investor uncertainty will reduce investment in future gas supplies to lower levels than would have happened had the 'shale gas revolution' not hit the headlines. While the markets will eventually solve this problem, rising gas demand and the long lead-in-times on most gas projects are likely to inflict high prices on consumers in the medium term.
- The uncertainties created by the 'shale gas revolution' are also likely to compound existing investor uncertainty in renewables for power generation in the aftermath of Copenhagen. The serious possibility of cheap, relatively clean gas may threaten investment in more expensive lower carbon technologies.
This report received a Special Note in the Publication of the Year category at the Prospect Think Tank Awards 2011.