24 ème Séance du Séminaire PSL de Recherches en Economie de l’Energie

L'efficience économique du développement des gaz de schiste

Katheline SCHUBERT, Professeur à Paris 1, Paris School of Economics , « Should we extract the European shale gas? The effect of climate and financial constraints » (Working Paper PSE n°2015-50, co-écrit avec Fanny Henriet, PSE)

In the context of the deep contrast between the shale gas boom in the United States and the recent ban by France of shale gas exploration, this paper explores whether climate policy justifies developing more shale gas, taking into account environmental damages, both local and global, and addresses the question of a potential arbitrage between shale gas development and the transition to clean energy. We construct a Hotelling-like model where electricity may be produced by three perfectly substitutable sources: an abundant dirty resource (coal), a non-renewable less polluting resource (shale gas), and an abundant clean resource (solar). The resources differ by their carbon contents and their unit costs. Fixed costs must be paid for shale gas exploration, and before solar production begins. Climate policy takes the form of a ceiling on atmospheric carbon concentration. We show that at the optimum tightening climate policy always leads to bringing forward the transition to clean energy. We determine conditions under which the quantity of shale gas extracted should increase or decrease as the ceiling is tightened. To address the question of the arbitrage between shale gas development and the transition to clean energy, we assume that the social planner has to comply to the climate constraint without increasing energy expenditures. We show that when the price elasticity of electricity demand is low, a binding financial constraint leads to an overinvestment in shale gas and postpones the switch to the clean backstop. We calibrate the model for Europe and determine whether shale gas should be extracted, depending on the magnitude of the local damages.

Aurélien SAUSSAY, économiste à l’OFCE, « Can the US shale gas revolution be duplicated in Europe?” (Working Paper OFCE n° 2015-10, Avril 2015)

The possible existence of large shale deposits in Europe has fostered speculation on whether the US "shale revolution", and its accompanying macroeconomic impacts, could be duplicated in Europe. However, a number of uncertainties, notably geological, technological and regulatory, make this possibility unclear. We present a techno‐economic model to analyze the main determinants of the profitability of shale wells and plays. We calibrate our model using production data from the leading American shale players. We estimate three shale gas production scenarios exploring different sets of geological and technical hypotheses for the largest potential holder of shale gas deposits in Europe, France. Even considering that the geology of the potential French shale deposits is favorable to commercial extraction, we find that under assumptions calibrated on U.S. production data, natural gas could be produced at a high breakeven price, but over a 45 years timeframe would have Pa net present value of around 1% of 2012 French GDP. However, the specificities of the European context, notably high deposit depth and stricter environmental regulations, could increase drilling costs and further decrease this low profitability. We test different cost hypothesis and find that higher costs would make shale gas extraction uneconomical. In absence of extreme well productivity, it appears very difficult for shale gas extraction to have an impact on European energy markets comparable to the US one.

Le séminaire se tiendra en Français