By John Richardson
MOHAMED Al-Mady, the CEO of SABIC, told the Financial Times yesterday that he worries about Europe losing out on petrochemical investments because of its reluctance to embrace shale gas.
"Some European companies already made the decision to go into shale gas, so naturally when they do not there will not be development," he told the newspaper.
"I think the trend you will see (is) more investors going to North America, China and the Middle East."
France has banned fracking because of concerns over the impact on water supplies and other environmental issues.
The UK only allowed fracking to resume earlier this month under new, much-tighter regulations. This was a year after exploration was suspended following two small earth tremors in Lancashire.
Poland is in contrast forging ahead with exploration of its shale-gas reserves, backed by a very willing public.
"Ever since the US Department of Energy's April 2011 announcement that Poland may hold enormous quantities of shale gas - 5.3 trillion cubic meters, enough for 300 years of consumption - hydrocarbon fever has swept the country," said Dimeter Kenarov in this blog post for the Foreign Policy magazine.
"Even when the Polish Geological Institute and the US Geological Survey reduced those figures by 90% in early 2012, the faith in shale remained unshaken.
"Nowhere else in Europe has shale gas generated so much enthusiasm among both politicians and the public.
"The government has already granted 111 exploration concessions on an area of 35,000 square miles, or about a third of the territory of Poland, while polls from last year suggest that 73% of the country's nearly 40 million people back developing shale."
However, in the same blog post, Cezary Filipowicz, the business development manager of United Oilfield Services, a Polish shale-gas service company, said: "For many reasons - resources, ecology, the areas where production is possible - the revolution in gas supplies that happened in America will never happen in Poland.
"Whoever expects that we'll be an exporter of gas for the European market is dreaming."
The US is, of course, pressing ahead with numerous petrochemical investments.
And, as we discussed earlier this month, you cannot write-off the Middle East as a source of future supplies of very competitively-priced ethane.
So where does Europe go from here? It faces both feedstock disadvantages in the case of ethylene derivatives and, quite possibly, a decade of economic stagnation.
But Europe's economic problems are global - and there are a myriad of other macro-economic issues threatening the world economy.
We continue to worry that companies will be undone by macro-economics in this ever-more volatile world, no matter how hard they work at the traditional routes to success of feedstock advantage and economies of scale.
The solution lies in also taking a pro-active approach to developing new sources of demand, which we will discuss in a series of posts next week.