The development of shale gas in Europe could add as many as 1 million jobs to the economy, make industry more competitive, and decrease the region’s dependence on energy imports, according to a recently released study commissioned by the International Association of Oil & Gas Producers (OGP).
The research, carried out by independent consultancies Poyry Management Consulting and Cambridge Econometrics, has quantified for the first time how much Europe’s economy could benefit from shale gas production, which could add a total of €1.7-3.8 trillion to the economy during 2020-50.
“Europe is still in a period of difficult economic and social recovery. This new study shows that shale gas production could have significant economic benefits,” said Roland Festor, OGP’s European Union affairs director, adding that while it may not be a “game changer” as in the US, “shale gas development in Europe could take full advantage of the lessons learned.”
Festor continued, “We cannot afford to forego such an opportunity; every cubic meter of gas produced from EU shale resources means one cubic meter less of imported gas. That would translate into more jobs, more disposable income, better security of supply and ultimately more prosperity. We encourage policymakers to create the right conditions for exploration.”
New jobs created
The study modelled the impact of shale gas development on the economy of the EU28, using three different scenarios, each with differing production levels.
According to the study’s results, shale gas operations could trigger the creation of 400,000-800,000 new jobs by 2035, and 600,000 to 1.1 million by 2050. Many of these jobs would be in the industries most affected by Europe’s crisis—and would be in net addition to any new jobs generated by other sectors, including the renewable energy industry.
Domestic production could reduce dependence on gas imports to 62-78%, down from an otherwise predicted 89% of demand in 2035. “The less Europe spends on energy imports, the more it can invest internally, stimulating national and local economies. During 2020-50, investment in the EU could increase by €191 billion, while tax revenues could increase by €1.2 trillion,” the study said.
The study concluded, “Indigenous gas production also could reduce energy prices compared with a no-shale gas scenario. Relatively lower prices would increase the income available to households and reduce costs for industry, making European products more competitive internationally.”