Economic impact analysis of natural gas development and the policy implications
In the US, the shale gas revolution ensured that the development costs of unconventional natural gas plummeted to the levels of $2–3/Mcf. This success has motivated the development of shale gas in other regions, including Australia and Europe. This study, focussing primarily on aspects of economic i...
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| Veröffentlicht in: | Energy policy 2016-01, Vol.88, p.639-651 |
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| creator | De Silva, P.N.K. Simons, S.J.R. Stevens, P. |
| description | In the US, the shale gas revolution ensured that the development costs of unconventional natural gas plummeted to the levels of $2–3/Mcf. This success has motivated the development of shale gas in other regions, including Australia and Europe. This study, focussing primarily on aspects of economic impact analysis, estimates the development costs of shale gas extraction in both Australia and Europe, based on both direct and fiscal costs, and also suggests policy initiatives.
The increasing liquefied natural gas (LNG) developments in Australia are already straining domestic gas supplies. Hence, the development of more natural gas resources has been given a high priority. However, a majority of the Australian shale resources is non-marine in origin and significantly different to the marine-type shales in the US. In addition, the challenges of high development costs and the lack of infrastructure, service capacity and effective government policy are inhibiting shale gas development. Increasing the attractiveness of low risk investment by new, local, developers is critical for Australian shale gas success, which will simultaneously increase domestic gas security. In the European context, unconventional gas development will be challenged by direct, rather than fiscal costs. High direct costs will translate into average overall gas development costs over $13/Mcf, which is well over the existing market price.
•The shale gas development potential of US, Europe and Australia are compared.•An economic impact analysis of shale gas development in Europe and Australia.•Factors important for shale gas development are discussed.•Policy pathways are suggested for shale gas development |
| doi_str_mv | 10.1016/j.enpol.2015.09.006 |
| format | Article |
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The increasing liquefied natural gas (LNG) developments in Australia are already straining domestic gas supplies. Hence, the development of more natural gas resources has been given a high priority. However, a majority of the Australian shale resources is non-marine in origin and significantly different to the marine-type shales in the US. In addition, the challenges of high development costs and the lack of infrastructure, service capacity and effective government policy are inhibiting shale gas development. Increasing the attractiveness of low risk investment by new, local, developers is critical for Australian shale gas success, which will simultaneously increase domestic gas security. In the European context, unconventional gas development will be challenged by direct, rather than fiscal costs. High direct costs will translate into average overall gas development costs over $13/Mcf, which is well over the existing market price.
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The increasing liquefied natural gas (LNG) developments in Australia are already straining domestic gas supplies. Hence, the development of more natural gas resources has been given a high priority. However, a majority of the Australian shale resources is non-marine in origin and significantly different to the marine-type shales in the US. In addition, the challenges of high development costs and the lack of infrastructure, service capacity and effective government policy are inhibiting shale gas development. Increasing the attractiveness of low risk investment by new, local, developers is critical for Australian shale gas success, which will simultaneously increase domestic gas security. In the European context, unconventional gas development will be challenged by direct, rather than fiscal costs. High direct costs will translate into average overall gas development costs over $13/Mcf, which is well over the existing market price.
•The shale gas development potential of US, Europe and Australia are compared.•An economic impact analysis of shale gas development in Europe and Australia.•Factors important for shale gas development are discussed.•Policy pathways are suggested for shale gas development</description><subject>Australia</subject><subject>Cost analysis</subject><subject>Costs</subject><subject>Development costs</subject><subject>Development policy</subject><subject>Direct costs</subject><subject>Domestic</subject><subject>Economic analysis</subject><subject>Economic development</subject><subject>Economic impact</subject><subject>Energy policy</subject><subject>Europe</subject><subject>Government policy</subject><subject>Impact analysis</subject><subject>Investments</subject><subject>Liquefied natural gas</subject><subject>LNG</subject><subject>Marine resources</subject><subject>Market prices</subject><subject>National security</subject><subject>Natural gas</subject><subject>Natural gas exploration</subject><subject>Natural gas supply</subject><subject>Policies</subject><subject>Prices</subject><subject>Risk</subject><subject>Security</subject><subject>Shale</subject><subject>Shale gas</subject><subject>Shales</subject><subject>Studies</subject><subject>Unconventional gas</subject><subject>United States</subject><issn>0301-4215</issn><issn>1873-6777</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2016</creationdate><recordtype>article</recordtype><sourceid>7TQ</sourceid><recordid>eNqNkbtu3DAQRQkjAbJx_AVpBKRJI2XIISmySGEYzgMw4CapCS41srmQRIXUGti_j-RN5SJwdZtzZzBzGPvIoeHA9ZdDQ9OchkYAVw3YBkBfsB03Lda6bds3bAcIvJaCq3fsfSkHAJDGyh27vw1pSmMMVRxnH5bKT344lViq1FeTX47ZD9WDL1VHTzSkeaRpY7pqeaRqXRnDaWuu6ZeYpvKBve39UOjqX16y399uf938qO_uv_-8ub6rg9J8qaU3EqBFISwXAY1Viu_3AIjY7XvRQd8aNChkH5SVCkjqznghkXC9RAa8ZJ_Pc-ec_hypLG6MJdAw-InSsTjeGs01GiNegSpj0YJRr0JRaSvbFf30Aj2kY16f90wBKG1wo_BMhZxKydS7OcfR55Pj4DZ17uCe1blNnQPrVnVr6-u5ResHnyJlV0KkKVAXM4XFdSn-t_8XDIagVw</recordid><startdate>201601</startdate><enddate>201601</enddate><creator>De Silva, P.N.K.</creator><creator>Simons, S.J.R.</creator><creator>Stevens, P.</creator><general>Elsevier Ltd</general><general>Elsevier Science Ltd</general><scope>AAYXX</scope><scope>CITATION</scope><scope>7SP</scope><scope>7TA</scope><scope>7TB</scope><scope>7TQ</scope><scope>8BJ</scope><scope>8FD</scope><scope>DHY</scope><scope>DON</scope><scope>F28</scope><scope>FQK</scope><scope>FR3</scope><scope>H8D</scope><scope>JBE</scope><scope>JG9</scope><scope>KR7</scope><scope>L7M</scope><scope>7ST</scope><scope>7U6</scope><scope>C1K</scope><scope>SOI</scope><scope>7SU</scope></search><sort><creationdate>201601</creationdate><title>Economic impact analysis of natural gas development and the policy implications</title><author>De Silva, P.N.K. ; 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This success has motivated the development of shale gas in other regions, including Australia and Europe. This study, focussing primarily on aspects of economic impact analysis, estimates the development costs of shale gas extraction in both Australia and Europe, based on both direct and fiscal costs, and also suggests policy initiatives.
The increasing liquefied natural gas (LNG) developments in Australia are already straining domestic gas supplies. Hence, the development of more natural gas resources has been given a high priority. However, a majority of the Australian shale resources is non-marine in origin and significantly different to the marine-type shales in the US. In addition, the challenges of high development costs and the lack of infrastructure, service capacity and effective government policy are inhibiting shale gas development. Increasing the attractiveness of low risk investment by new, local, developers is critical for Australian shale gas success, which will simultaneously increase domestic gas security. In the European context, unconventional gas development will be challenged by direct, rather than fiscal costs. High direct costs will translate into average overall gas development costs over $13/Mcf, which is well over the existing market price.
•The shale gas development potential of US, Europe and Australia are compared.•An economic impact analysis of shale gas development in Europe and Australia.•Factors important for shale gas development are discussed.•Policy pathways are suggested for shale gas development</abstract><cop>Kidlington</cop><pub>Elsevier Ltd</pub><doi>10.1016/j.enpol.2015.09.006</doi><tpages>13</tpages><oa>free_for_read</oa></addata></record> |
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| subjects | Australia Cost analysis Costs Development costs Development policy Direct costs Domestic Economic analysis Economic development Economic impact Energy policy Europe Government policy Impact analysis Investments Liquefied natural gas LNG Marine resources Market prices National security Natural gas Natural gas exploration Natural gas supply Policies Prices Risk Security Shale Shale gas Shales Studies Unconventional gas United States |
| title | Economic impact analysis of natural gas development and the policy implications |
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