Russia in tension?

There has always been a talk about US and China. Sometimes the limelight goes onto European debt problems. What about Russia? Out of various topics I would like throw light upon the Kremlin’s apple pie “Natural gas drilling”. But it isn't its apple pie anymore. Hydraulic fracturing or fracking has made many countries jittery. It is predicted that U.S fracking could lead to negligible amount of import of natural gas in near future, which is alarming news to Russia. 

To put in simple wordings, certain veins or dikes create a natural form of hydraulic fracturing where gas and petroleum migrates from source rocks to reservoir rocks. Whereas, fracking is a technique used to release petroleum and natural gas (including shale gas, tight gas and coal seam gas), or other substances for extraction. The maiden hit occurred at Marcellus formation in Pennsylvania and the Barnett, in Texas. It opened up vast gas reserves buried in deep shale rock. There was a time when U.S was running out of natural gas, but when there were glut of shale gas the prices skyrocketed. Also the price difference between Russia and U.S was striking for many energy companies and politicians. U.S was about $7 cheaper per unit, and it would lead to millions as the products are usually consumed in bulk. Russia was like a sole dictator for European nations in terms of natural gas supplier. In the year 2009 Russia had cut off gas shipments via Ukraine for about two weeks due to price and payment dispute. More than 15 European nations were startled and were anxious to find alternative source of energy.

Gazprom Energy Corporation in Russia is the world’s largest natural gas producer and exporter. Even then its profits dropped by 25% recently. The presidential election candidates are already making use of this point in their election campaigns. The CNBC news report quotes that, a campaign position paper for Republican Mitt Romney said he "will pursue policies that work to decrease the reliance of European nations on Russian sources of energy." In early September, President Barack Obama said the U.S. could "develop a hundred-year supply of natural gas that's right beneath our feet," which would "cut our oil imports in half by 2020 and support more than 600,000 new jobs in natural gas alone." Poland's Ministry of the Environment wrote in a statement to The Associated Press that "an increased production of natural gas from shale formations in Europe will limit the import via pipelines from Algeria and Russia."

But there is also an opinion that the abnormally low prices of U.S will not last very long and when market demand expands Russia will earn its share back as it is leveraged by huge reserves.