Impact of shale revolution in oil and gas on feasibility of energy investments in the Arctic
|Theme||1. Environmental protection|
|Session Name||1.12 Arctic resource geopolitics, oil and gas - actors, policies, platforms|
|Author(s)||Beata Slominska (Laurea University, Finland)|
The shale revolution in gas and oil, and especially the one which occurred in the US, had a tremendous impact on an a global energy architecture. An abrupt increase in the production of gas and oil in the US, followed by a strong entrance of the US on the global energy market, significantly increased the amount of energy resources on the global market. To lesser but still significant extent the supply was stimulated also by shale production in other countries, among Australia. An increased amount of energy resources on the supply side, matched with a moderated growth of global demand for energy, resulted in a decrease of prices of oil and gas. An abundance of energy resources accelerated development of LNG market, which increased the level of internationalization of trade in gas. These factors have redefined the current trade in energy resources and have strongly influenced the perspectives of future investments in exploratory projects. A perspective of the continued maintenance of low energy prices on the world market and expected increases in production of oil and gas from currently explored basins, decreases feasibility of energy projects located in remote and less accessible places requiring additional significant investments. These developments can be of critical significance for a future landscape of energy exploration of the Arctic, rending major planned projects less feasible than only few years ago. Consequently, despite of the improving conditions for further exploration of energy sources the scope and pace of energy exploration of the Arctic may be deterred.
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