FEEM working papers "Note di lavoro" series
2014 .109

Unconventional Gas and the Europe Union: Prospects and Challenges for Competitiveness


Authors: Herman R.J. Vollebergh, Eric Drissen  
Series: Energy: Resources and Markets
Editor: Giuseppe Sammarco
Keywords: Shale Gas, Hydrocarbon Resources, Energy Demand and Supply, Non-renewable Resources, Competitiveness Impacts, European Union
JEL n.: L71, O52, Q35, Q41, Q43

Abstract

This article studies the likely impact of unconventional gas developments in the U.S. on EU competitiveness. We find, first of all, little evidence for a prosperous unconventional gas development in Europe. Second, the U.S. boom has already a strong impact on both world and European energy markets. In particular, lower U.S. gas and coal prices have changed relative energy prices both at home and abroad. Finally, competitiveness impacts in some (sub)sectors will be considerable. These impacts are not only related to production based on gas use as a feedstock but also on the ‘byproducts’ from unconventional gas production, such as ethylene, propane and butane. However, several indirect impacts, such as lower coal import prices, may soften the adverse competitiveness impact in the EU.

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Suggested citation: Vollebergh, H. R. J., E. Drissen, (2014), 'Unconventional Gas and the European Union: Prospects and Challenges for Competitiveness', Nota di Lavoro 109.2014, Milan, Italy: Fondazione Eni Enrico Mattei.

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