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

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  • Herman R. J. Vollebergh
  • Eric Drissen

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.

Suggested Citation

  • Herman R. J. Vollebergh & Eric Drissen, 2014. "Unconventional Gas and the European Union: Prospects and Challenges for Competitiveness," CESifo Working Paper Series 5035, CESifo.
    • Handle: RePEc:ces:ceswps:_5035
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    References listed on IDEAS

    as
    1. Harrison Fell, Beat Hintermann, and Herman Vollebergh, 2015. "Carbon content of electricity futures in Phase II of the EU ETS," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    2. Wang, Zhongmin & Krupnick, Alan, 2013. "A Retrospective Review of Shale Gas Development in the United States: What Led to the Boom?," RFF Working Paper Series dp-13-12, Resources for the Future.
    3. Peter R. Odell, 1994. "World Oil Resources, Reserves and Production," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 89-114.
    4. Lutz Kilian, 2008. "The Economic Effects of Energy Price Shocks," Journal of Economic Literature, American Economic Association, vol. 46(4), pages 871-909, December.
    5. Krupnick, Alan & Wang, Zhongmin & Wang, Yushuang, 2013. "Sector Effects of the Shale Gas Revolution in the United States," RFF Working Paper Series dp-13-21, Resources for the Future.
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    Cited by:

    1. Saussay, Aurélien, 2018. "Can the US shale revolution be duplicated in continental Europe? An economic analysis of European shale gas resources," Energy Economics, Elsevier, vol. 69(C), pages 295-306.
    2. repec:hal:spmain:info:hdl:2441/3vsrea3gla9r5oaa2cle5jrqfh is not listed on IDEAS
    3. repec:hal:spmain:info:hdl:2441/2b9jeu7kmm94kq22avt9ejbu5k is not listed on IDEAS

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    More about this item

    Keywords

    shale gas; hydrocarbon resources; energy demand and supply; non-renewable resources; competitiveness impacts; European Union;
    All these keywords.

    JEL classification:

    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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