But Europe will need more than renewable energy to reduce its dependence on Russian gas. Estimates of Europe’s shale gas resources suggest that they could supply between 10% and 30% of the continent’s current annual consumption by 2035, enough to displace a significant proportion -- perhaps all -- of imports from Russia at an apparently lower cost than imported pipeline gas or LNG. That will not happen by default. Regulators and lawmakers will need to demonstrate a commitment to constructive regulation which permits the safe and expeditious development of Europe’s shale gas resources. There are signs that the continent is moving in the right direction: Germany has signalled its intent to allow fracking to resume, while the UK is simplifying some of the regulatory process. But there is much more still to do. In return, prospective operators must recognise the need to build a culture of transparency and trust, at a time when the public is deeply suspicious of the energy industry. That will require meaningful programs of community engagement and an unremitting commitment to demonstrating the positive economic and environmental impact that a shale gas industry can have.
In my experience, President Putin is consistently pragmatic. With the Russian government budget so finely balanced, Putin cannot afford in the long term to lose the 15% of Russia’s export revenue that come from sales of gas in Europe. He also knows Europe has an increasing array of energy options. European governments, regulators, companies and consumers must now demonstrate their willingness to embrace those options. As Winston Churchill reminded Britain on the eve of the First World War, energy security lies in "variety and variety alone."
-- By John Browne, Lord of Madingley
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.