Shale gas has become the object of all sorts of fantasies in France. According to the US Energy Information Administration, a US body that manages energy statistics, France is sitting atop considerable reserves of gas and oil from shale: 3,870 billion cubic metres of gas and 4.7 billion barrels of oil. That works out to nearly 80 years of gas supplies and nearly 60 years of oil. And it’s powering the wildest dreams. The French are not the only ones fantasising either: Poland is hoping to reduce its dependence on Russia, and Britain is counting on shale gas to offset the decline in its North Sea oil fields...

In the United States, it’s true, these non-conventional hydrocarbons have brought on a revolution. Between 2005 and 2012, gas production jumped by 33 per cent and oil by 28 per cent. According to a very recent study from IHS Cera (which advises the oil industry), this boom led in 2012 to the creation of 2.1 million jobs (including indirect and induced), generated $75bn in tax revenue, and increased household revenues by $1,200.

Energy independence for the North American continent by the end of the decade is considered a plausible hypothesis

The country has doubly benefited from the "oil and shale gas" effect: not only has the US economy been boosted by the resurgence of activity in the oil industry itself, but it has also benefited from the dramatic decline in the price of gas associated with the increased production, which has fallen more than fourfold in six years. It’s a huge competitive advantage, which has benefited highly energy-intensive industries and sparked the phenomenon of reindustrialisation in the United States. Energy independence for the North American continent by the end of the decade is considered a plausible hypothesis.

Yet it is clear that Europe is not America. Even assuming that the doubts about the pollution involved in the operation are cleared up and that the technology used – the notorious hydraulic fracturing – will be allowed anywhere, shale gas will not cause an economic shock in Europe of a magnitude similar to that in the United States. The argument is regularly wheeled out by the opponents of drilling, but it is also widely shared by the oil and gas industry experts themselves.

Shale in perspective

No serious study has been carried out on the subject. The exercise is a kind of mission impossible, since nobody today has no idea of the real potential of Europe. The estimates put forward by US EIA or other national administrations are based on hydrocarbons already present in the ground, which depend on the geology of the formations, and not on those that would be recoverable at an acceptable cost. It is rare, though, for a recovery rate to be more than a few per cent. Even if it did reach an average of 10 per cent – a rather optimistic level – the potential production of shale gas would not exceed a total of 1,300 billion cubic metres in Europe. That is, over a production period of 25 years, barely five per cent of what Europe consumes each year. A very theoretical calculation, but it has the merit of giving a rough idea of the orders of magnitude. In the United States, in contrast, the unconventional gas accounted for 56 per cent of the consumption in 2012.

The speed and the magnitude of the growth of production across the Atlantic may not be repeated in Europe. The exceptional conditions existing in the United States are not met here: the presence of a major oil and gas industry, abundant drilling equipment, a network of gas pipelines, and the great empty spaces that has let the Americans drill more than 200,000 wells in just a few years. The legal context has also played a role: American citizens are the owners of their subsurface rights and have a financial interest in signing directly with the companies. In Europe, it’s not just that the infrastructure remains limited, but the local regulations are more stringent. Poland, which got exploration underway in 2008, has only drilled some 40 wells.

No silver bullet

According to a recent study by Bloomberg Energy Finance, the cost of production in the United Kingdom would be between 50 and 100 per cent higher than in the United States

In Denmark, the first drillings have been postponed for a year, to give time to make detailed impact studies. The same is true in the United Kingdom. “In Europe it will take at least 10 years between starting up a site and coming online with the gas, versus three in the United States,” predicts one industrialist. “Similarly, for reasons of acceptance, the number of simultaneous drillholes in the same area will probably be limited.” According to a recent study by Bloomberg Energy Finance, the cost of production in the United Kingdom would be between 50 and 100 per cent higher than in the United States.

Less intrusive and large-scale, more spread out over time, the production of oil from shale in Europe will be more expensive and probably not enough to depress prices or actually reduce Europe’s energy dependence. Even if France could produce 30 per cent of the gas it consumes, it would only cut its energy bill by €3-4bn a year, out of a total of €70bn in 2012. The impact on employment would also be limited. The few estimates on this point by the firms SIA Conseil in France and Poÿry in the United Kingdom could only extrapolate from the American experience, based on the number of jobs per billion cubic metres produced or by the number of wells.

The calculations come up with, at best, a few tens of thousands of jobs per country. This is certainly not negligible in today’s circumstances. But shale gas will not be the formula that will let Europe climb out of its crisis.