Encouraged by the shale gas revolution in the US, European countries are trying to develop all kinds of natural gas. Recently, a huge amount of shale gas and tight sandstone gas was discovered in Germany, Poland and other European countries. Geological reserves in Europe are expected to surpass 120 trillion cubic meters. If its natural gas fields were developed, the endproduct would cost no more than the gas that Russia now sells to Europe. As in the case of the US, the effects of European energy independence would be felt worldwide.
As a matter of fact, there are abundant oil and gas resources around the world. The supply shortage of oil and natural gas is nothing less than a lie. In 1990, 125.7 trillion cubic meters of gas reserves had been detected worldwide, and at the time annual consumption was only 1.96 trillion cubic meters. By last year annual consumption had increased to 3.17 trillion cubic meters, and detected reserves had increased to a record 187.1 trillion cubic meters.
In 1980, just 667.5 billion barrels of oil had been detected worldwide. This had almost doubled to 1.21 trillion barrels by 2006, and the reserve-production ratio was 40.5 years. By last year proven reserves were 188.8 billion tons and the reserve-production ratio being 46.2 years.
The recent increase of international oil prices is mainly caused by speculation on Wall Street, not by supply and demand.
Recently US citizens have occupied part of Wall Street, protesting against financial speculators. Therein lies a warning for Wall Street. The price of energy will not surge in the way that it did in 2008. Oil and gas prices will stay relatively low because of the financial crisis, which is the last thing Russia would want to hear.
Another thing that would hardly be music to Russia's ears is the prospect of China becoming energy independent. For a long time Chinese have thought they lacked energy resources, especially clean and highly efficient natural gas, to support sustained economic development.
In fact the country is rich in both conventional and unconventional gases. What brings about a shortage of natural gas in China is a monopoly. Most of the resources are operated by PetroChina. But it has put most of its money into oil exploration, with an eye on rising oil prices. PetroChina complained that the domestic price of natural gas is too low and that things would change if the price was $350 per thousand cubic meters.
China has conventional gas reserves of 56 trillion cubic meters. We also have 100 trillion cubic meters of shale gas, 100 trillion cubic meters of tight sandstone gas, 36.8 trillion cubic meters of coal bed gas, 42 trillion cubic meters of combustible ice on land, 22 trillion cubic meters of combustible ice in the South China Sea, and other natural gases. The total, 356 trillion cubic meters, could help China in the quest for energy independence. If the Chinese government opened the energy market, the domestic supply of natural gas would develop rapidly.
Even if China did gain such independence, that does not mean it would stop imports. As the largest manufacturing country, it must open its market to the rest of the world to maintain balanced trade.
The author is chief information officer of China5e.com, a network devoted to energy related information. The opinions expressed in the article do not necessarily reflect those of China Daily.
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