The head of Italy’s largest oil company says Europe is facing unsustainable energy costs that only fracking or increasing Russian imports can address.
Speaking Monday at a Council on Foreign Relations event in New York, Eni CEO Paolo Scaroni said Europeans pay twice as much for natural gas as Americans.
“To imagine Europe living with such a differential in energy costs seems to me really quite dramatic,” Eni CEO said. “I think there’s a real emergency on that point.”
Right now, he said, the U.S. has little incentive to expand natural gas exports to Europe, as lower natural gas prices yielded by the shale boom have boosted America’s industrial competitiveness.
“I can’t imagine anybody making an energy intensive investment in Europe,” he said.
Total CEO Christophe de Margerie, who was also part of the panel, echoed Scaroni’s comments, saying the American practice of paying royalties to landowners, and the availability of sophisticated, easily transportable drilling equipment would not be replicated across the Atlantic without difficulty.
Just this weekend, outgoing Shell CEO Peter Voser told the FT he was pessimistic that shale would get developed to the same extent as it has in America.
Scaroni said he was closely monitoring progress in the U.K., where electricity price spikes have accelerated shale development.
“They are the most pragmatic. Europeans love to discuss theory, Brits like to do practice.”
Assuming fracking does not expand in Europe, the continent will be forced to turn to Russia, he said.
“Looking at where the resources are, and where the consumption is, there’s a certain amount of ‘force of gravity’ which will bring the two sides close to each other.”
The EIA has estimated there are 221 trillion cubic feet of technically recoverable shale gas and 8.3 billion technically recoverable shale oil barrels in Western Europe.
At the same time, several countries, including France and the Netherlands, have placed moratoriums on fracking.
Watch a replay of the full panel here:
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