The North American gas shale revolution’s medium-term impact on global markets will be realized through exports of the fuel itself, rather than the technology to access it, according to International Energy Agency Executive Director Maria Van Der Hoeven.

“The unconventional gas revolution in the US will impact gas markets over the medium term more by spilling North American exports onto the LNG market, than by the spread of that revolution itself,” Van Der Hoeven said at the Launch of the Medium‐Term Gas Market Report 2013 in St. Petersburg, Russia yesterday.

Several countries outside the US could potentially hold sizeable unconventional gas resources. A recent report by Advanced Resources International, sponsored by the Energy Information Administration, has estimated that there could be 1,115 trillion cubic feet of technically recoverable shale gas in China, 802 trillion cubic feet in Argentina, and 707 trillion cubic feet in Algeria.

But a combination of geologic, environmental, political and logistical constraints to unconventional gas development outside of North America may keep most of those resources locked underground for years to come.

“China holds large shale gas reserves, perhaps comparable to the US,” Van Der Hoeven said. “But they are proving very hard to access, despite lessons learned during the US bonanza. The obstacles China faces are largely due to complex geology, which does not favour the US experience and technology, but also result from population density, water scarcity, and regulatory impediments.”

Some of these obstacles will also slow or prevent shale development in Europe. “Europe suffers from many of the same problems – population density and regulatory impediments – which limit any prospects for competitive shale gas production there,” she said, adding that “in Europe public acceptance is also a big issue”.

Van Der Hoeven stressed that North American LNG exports could enhance liquidity in global gas markets, provide diversification options for importers and help relieve LNG supply tighteness, as well as being a boon to the US and Canada. She noted that a report by NERA Economic Consulting, commissioned by the Department of Energy, argued “robustly” that LNG exports would benefit the US economy, and said that “we fully agree with this assessment, and we see open, transparent markets as the best framework to provide energy security”.

North American gas exports, by offering a pricing structure that differs from traditional oil-linked pricing, can offer both pricing and source diversification options for importers. “American and Canadian gas exports will therefore contribute a flexible, competitive alternative on the global LNG market,” she said.

North American exports can help to relieve market tightness, which could be exacerbated by security issues in North and West Africa and Yemen, as well as by subsidized gas prices driving domestic consumption in places like the Middle East and Indonesia.

And making more gas available worldwide can further progress on emissions-reductions goals. A tight LNG market “means an ongoing competitiveness of coal in Asia, where alternative gas import sources and domestic production are limited”, Van Der Hoeven said. “That has an obvious impact on carbon emissions and local pollution.”

You can read an executive summary of the report here.