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The shale gas revolution and the flood of cheap gas it unleashed have been great for US economic competitiveness, but its effects are far less favorable for Europe, said Paolo Scaroni, chief executive of Italy’s Eni, at the Council on Foreign Relations in New York yesterday.

“Gas prices in Europe are three times as high as in America, and electricity prices are twice as high – both for consumers and for industry. It’s very hard to imagine how Europe can recover and start again the process of reindustrialization with such a differential in the cost of electricity and gas. This is going to be a major issue for Europeans.”

“Even if we think that America will become a big exporter of gas, the gas will land in Europe at a price double the price in the US.”

It remains unclear whether Europe will be able to develop its own shale gas resources in any meaningful way. If it cannot or will not, Russia is an obvious long-term source of supply, Scaroni said.

“If either we don’t have shale gas in Europe or we cannot exploit it, the only thing I am looking very much forward – 20 years from now – is to think that our Texas will be Russia.”

“We have Russia next to us with unlimited resources of gas. They need to have a big customer, we are the big customer. We need to have a big supplier, this is next to us.”

Scaroni did not directly address political concerns, such as mid-winter gas supply shutoffs, that have prompted Europe to seek to diversify away from Russia. But he pressed the point that there are obvious logistical and economic reasons for the EU and Russia to remain major energy trade partners over the long term.

“Don’t think about Putin. I’m not talking about that. I’m talking 20 years from now, just looking at where the resources are, and where the consumption is. There is a certain kind of force of gravity which will bring the two sides one close to the other.”