The shale gas market - France

The global shale gas market, valued at $68.3 billion, is projected to experience significant growth with an expected CAGR of 8.5% through 2027, reaching $131.2 billion, driven by increasing energy demand and competitive pricing. Despite holding the second-largest shale gas reserves in Europe, France remains unable to exploit this resource due to a ban on extraction implemented. As a result, France is entirely dependent on imports, evidenced by the sharp 544% year-on-year increase in shale gas imports from the US. French consumption of gas rose by 2%, largely driven by the electricity production sector. Internationally, while China, Argentina, Algeria, and the US hold significant reserves, actual extraction and availability are influenced by various factors such as infrastructure, regulation, and government incentives, with the US leading in terms of sold and retrieved shale gas. The market has been impacted by COVID-19, causing a 5-10% drop in demand, and continues to grapple with environmental concerns, technological challenges, and regulatory scrutiny.

The French Perspective on Shale Gas Demand and Market Trends

In France, the demand for shale gas presents a highly nuanced tale. While globally the shale gas market has been burgeoning, with an expected surge in value from approximately $68.3 billion to over $131 billion by 2027, France has taken a divergent path due to environmental concerns and regulatory actions. The growth in global demand for energy and competitive pricing has fueled the shale gas industry, yet in France, public opinion has been predominantly negative towards this resource, with approximately 83% of surveyed individuals expressing disapproval, largely due to perceived environmental impacts. Despite the negative sentiment towards domestic production and the official ban on shale gas explorations and extractions enacted in 2017, France's energy consumption trends show a slight rise in gas utilisation from 11.8% in 1990 to 15.7%. This increase is part of France's diverse energy mix, where nuclear energy plays a dominant role. France's consumption decreased by roughly 1% from the previous year, with a total energy consumption of around 474 Terawatt-hours.

The country's policy against shale gas extraction hasn't eradicated the consumption of the gas itself. France has been importing shale gas, particularly from the US, which saw a dramatic increase of over 540% from around 18,291 million cubic feet to over 117,791 in the following year. This reliance on imports brings about an interesting dynamic where the nation's negative stance on domestic shale gas production contrasts with its actions to meet energy demands. When it comes to the production of energy within France, the focus remains on nuclear power, which accounted for 70.6% of the electricity produced in the country. French production sites, primarily concentrated in the North and North-East, utilize methods such as combined cycle power plants - a stark contrast to the controversial fracking techniques associated with shale gas.

From the perspective of regulation, France's non-production status shields it from direct fracking regulations, yet it must adhere to European standards concerning the transparency of gas prices and internal market regulations for gas. This compliance confirms the country's engagement with the gas market, albeit not in the production capacity. The foray into potential revenue and employment contributions from shale gas is often debated. Using the United States as a benchmark, certain sectors such as chemistry and plastics have witnessed significant economic boosts attributed to shale gas. 

Leading Contenders in the Shale Gas Arena: A Look at the Dominant Market Players

The shale gas market, while facing scrutiny for its environmental impact, continues to be a significant sector within the energy industry. It is energized by a few pivotal players who are not only influential due to their size and revenue but also because of their technological advancements and strategic market positioning. The international stage sees powerhouses such as Exxon Mobil, Chevron, and Halliburton, while France, despite its ban on extraction, sees contributions from homegrown giants like Total and Engie. Here's a more detailed look at these key operators shaping the shale gas landscape.

• Total: A French Energy Titan with Global Reach Total, France's leading energy corporation, is known for its diversified portfolio which extends beyond the nation's borders. Although the company does not engage in shale gas extraction within France due to the nation’s regulations, it has a significant presence in the global shale gas industry through its operations in other countries. Total's involvement in various aspects of energy production and its commitment to transitioning to cleaner energy sources keeps it at the forefront of the energy debate, both in France and internationally.
• Engie: France's Energy Diversification Champion Engie, formerly known as GDF Suez, plays a substantial role within France’s energy sector, particularly in natural gas distribution and energy services. Engie’s strategy has increasingly moved towards sustainable energy solutions, reflecting France's regulatory environment and the company's adaptation to a changing market. Despite the French aversion to shale gas, Engie’s expertise in gas infrastructure and its international ventures still afford it a consequential role within the global gas markets.
• Exxon Mobil: An American Behemoth in Shale Gas Exploration Exxon Mobil, the American oil and gas colossus, has a pivotal place in the shale gas sector, not only in the United States but across the globe. Its expertise in extracting shale gas through advanced fracking technology allows it to be a leader in this energy segment. The company’s emphasis on research and development further bolsters its position as a top contender in efficiently harnessing shale gas resources.
• Chevron: A Dynamic Player with a Strong Shale Footprint Chevron brings to the table its considerable resources and its strategic investments in shale gas, particularly in the U.S. where it is one of the leading producers. Chevron’s commitment to innovation and efficiency in extraction processes underlines its status as a major player in the industry, constantly seeking to balance economic gain with environmental considerations. 

Inforamtion

• Number of pages : ~ 40 pages
• Format : Digital and PDF versions
• Last update : 07/10/2020

Summary and extracts

List of charts presented in this market study

• What image do you have of shale gas?
• Would you like to see shale gas developed as an energy source in France?
• Evolution of interest in the term "shale gas
• Structure of primary energy consumption
• Size of the shale gas market
• Country with the largest reserves of shale gas
• Main countries of origin of gas imports
• Average natural gas price for all users
• Estimated breakdown of shale gas production costs
• Share of US LNG imports into Europe