LONDON – U.S. shale gas is not the silver bullet for Japan’s energy problems in the short term, according to John Browne, former chief executive of British energy giant BP PLC.
Browne insisted that shale gas has to be economically viable for it to fulfill Japan’s energy needs and that lawmakers must consider its costs carefully.
“What is the marginal cost of the production of shale gas in the United States, the cost of transportation to Japan and will that be lower or higher than the cost of alternative supplies from the Middle East or Africa?” asked Browne.
Shale gas “will form part of the mix,” but “what I would say as far as Japan is concerned is this: There is lots of gas in the world,” he said.
Still, shale gas is very important and has dramatically changed the economic fortunes of the United States, Browne said.
Many of the U.S. industries that moved offshore are now returning, and “the cost of energy is coming down significantly,” Browne said.
As many countries struggle to find strong growth, the shale gas revolution is a “very big deal,” he added.