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PacNet #21 – Shale: the wedge between Russia and China

March 28, 2013

As the US undergoes a shale energy revolution, Canada is looking to China as an alternate market for exports, just as Russia looks to China as the EU diversifies its supplies and does its own shale development. If both the US and the EU move away from Canada and Russia respectively as an energy supplier, then China becomes Canada’s and Russia’s replacement market. Yet, according to the International Energy Agency, as foretold by Li Guo Yu, China’s venerable elder statesman, pioneer and geographer of energy, China has more shale potential than either the US or the EU! If China is smart, it should push for low prices (ideally zero profit) for Russia in natural gas negotiations and develop its own domestic resources instead. Indeed, making China more energy independent is in both China’s and the world’s interest, since it would increase overall supply and lower prices.