Europe risks losing out on a huge energy opportunity and petrochemical investments because of its reluctance to embrace the shale gas revolution, said the head of Sabic, the world’s largest petrolchemical group by market value.
In an interview with the Financial Times, Mohamed al-Mady, chief of the Riyadh-based group, said that the hesitation of policymakers in Brussels has driven away potential investors who have instead turned their focus to China and the Middle East – regions that are keen to emulate the US’ success in shale gas.
At their lowest levels in 2012, natural gas prices in the US were about a fifth of import prices in Europe and some 50 new projects have been unveiled in the US petrochemical industry, including a $30 billion planned investment in ethylene and fertilisers alone.
In the interview, Mady pointed out that this had led to a big expansion in petrochemical facilities in the US, where Sabic is eyeing potential investments to take advantage of cheap shale gas.
In Europe, however, the prospect of extensive shale gas development is complicated by land ownership rules, higher population density and environmental concerns about the fracking process used to extract natural gas from shale.
However, the European Commission in November shied away from an outright ban on fracking and instead voted to allow more time for the study and determination of a framework on managing the risks of fracking.
"Studies carried out indicate that there are a number of uncertainties or gaps in current EU legislation. Addressing health and environmental risks will be of paramount importance for the industry to gain broad public acceptance," Environment Commissioner Janez Potocnik said in a statement.
Earlier this month the UK gave the go-ahead to fracking, under tight regulatory conditions, a year after the practice was suspended when an exploration company triggered two small earth tremors in Lancashire.
Poland has been keen to allow exploration for shale gas, but it is still unclear if countries outside the US will be able to enjoy the same transformative economic benefits of the American shale boom.