The dynamic rise of shale gas has raised alarm bells in the highest reaches of the Kremlin.
Whilst it is exceedingly difficult to summon up much sympathy for either Russia’s state-owned natural gas monopoly Gazprom or Russian President-elect Vladimir Putin, the dynamic rise of natural gas produced by hydraulic fracturing, or ‘fracking,” has raised alarm bells in the highest reaches of the Kremlin.
Because Gazprom’s European customers, tired of being ripped off by Gazprom, are avidly exploring the possibilities of undertaking fracking to develop their own sources of the “blue gold,” and nowhere is interest higher than in the Russian Federation’s neighbors Ukraine, Poland, Romania, Bulgaria and China.
The Russian leadership is sufficiently unnerved by the prospect that on 11 April Prime Minister Putin told the State Duma in his final address before he takes over as president on 7 May, “We have to be ready for any external shocks. The likelihood of them recurring is, as you know, high. The world has entered an era of turbulence, and there’s also a new wave of technological changes. The configuration of the global markets is altering. There have been questions from the various political factions, and I’m just going respond to some of them.
For example, the U.S. in recent years has been actively engaged in the production of shale gas. Colleagues from the Liberal Democratic Party asked about this problem. Do you realize how important this is – after the collapse of the Soviet Union, we inherited a whole series of intermediaries and transit networks. This could of course redefine the hydrocarbons market in a big way. Russian energy companies have to be ready right now to meet this challenge.”
Underlining the seriousness of the issue, Putin’s speech was broadcast live by the Russia 24 TV network.