The Golden Age

The global energy picture used to be simple. There were producers (oil giants like Saudi Arabia and natural gas titans like Russia), and they sold to consumers (industrial nations like the U.S., China and Germany). It was a precarious situation, one that left consumers vulnerable to high prices and producers at risk of low prices, yet no one expected it to change anytime soon.

But it has, thanks largely to an advanced drilling process that sounds like a network-TV curse word: fracking. The technique, which involves the use of explosives, chemicals and millions of gallons of water to create tiny fractures in shale thousands of feet underground, has unlocked new supplies of natural gas long considered too difficult and expensive to tap. In the U.S., where fracking (short for hydraulic fracturing) originated as the product of wildcat drillers and government researchers, it has transformed the industry, revitalizing domestic drilling and producing so much that U.S. natural gas prices recently fell to a 10-year low.

Now Europe and China–which together have more than twice the U.S.’s estimated shale-gas reserves–are following suit, investing billions of dollars in shale-gas drilling. China announced in March it’s aiming to produce 6.5 billion cubic meters of shale gas by 2015, and the same month the state-owned China National Petroleum Corp. signed a production-sharing agreement with Shell on shale gas. Europe is moving more slowly, though countries like gas-rich Poland are already drilling. The investments could change the global energy landscape by reducing the world’s dependence on Middle Eastern and African resources. “The U.S. has given a major present to international energy with shale gas,” Fatih Birol, chief economist of the International Energy Agency (IEA), told TIME in a recent interview. The question now is whether China and Europe can overcome the big environmental, technical and political hurdles holding their efforts back. “We’re very much at the early exploration stage for China and Europe,” says Neil Beveridge, an energy analyst at research firm Sanford C. Bernstein in Hong Kong. “There’s still a large amount of uncertainty around this.”

To Frack or Not to Frack

A little more than a decade after energy experts predicted the U.S. would need to import liquefied natural gas (LNG) to offset declining domestic production, American companies are swimming in so much shale gas, they’re lobbying Washington to allow LNG exports. But the U.S. isn’t the only place with fracking potential; shale gas is proving so abundant, the IEA has predicted that the world could be entering a golden age of gas, in which inexpensive natural gas replaces coal as the electricity source of choice. Energy-hungry Europe and China have two of the richest shale-gas reserves, and China’s is potentially the largest in the world.

But just because the gas is there doesn’t mean it will be tapped. The shale-gas push in the U.S. has been slowed by environmental concerns over fracking–chiefly the possibility of groundwater pollution–which will only intensify in politically greener and more crowded Europe. France and Bulgaria have already banned fracking for environmental reasons. Europe has 180 people per sq. mi. (70 people per sq km), more than twice the density of the U.S. Also, Europeans living above shale gas won’t benefit as much from drilling as their American counterparts. In the U.S., people can own the mineral rights below their land, which means energy companies have to pay property owners to drill on their land to make up for the inconvenience. But in Europe the government controls the mineral rights even on private land, so property owners endure the pain of drilling without enjoying the profits.

In China there are other obstacles. Its shale gas is buried more deeply, making development more expensive. State-owned Chinese companies lack fracking expertise. And while the richest reserves are found in relatively unpopulated areas–a plus–those lands tends to lack the water and pipelines needed to frack. China’s geology could prove more challenging as well if, as in Britain, concerns arise about earthquakes and other problems attributable to drilling. The independent British company Cuadrilla Resources began drilling wells in northwestern England but suspended operations last spring after two small earthquakes were detected near the sites. Cuadrilla later released a report that said fracking likely caused the quakes. British environmentalists are warning about the groundwater contamination allegedly caused by fracking in the U.S. And although the estimates of British shale-gas reserves are impressive, they are preliminary. No one will know how much gas is economically recoverable until companies start drilling.

Frack On

There are reasons for Europe and China to persist. Shale gas could allow former Soviet-bloc states like Poland, Romania and Ukraine, which are highly dependent on Russian natural gas, to break free of Moscow, which has used energy as a political weapon. In Poland, which has the largest reserves in Europe, the government has offered more than 100 shale-gas concessions to mostly foreign energy companies. Russia is clearly worried–so worried that its President, Vladimir Putin, has been singing environmentalists’ tune about the dangers of fracking. “Poland wants to get rid of Russian gas,” says Anne-Sophie Corbeau, the IEA’s senior gas expert. “They’re getting a lot more support from the population than you’re seeing in other countries.”

Authoritarian China doesn’t need that popular support. To ramp up to 60 billion cubic meters of shale gas by 2020, from practically zero now, the government is encouraging state-owned oil companies to partner with experienced international players like Shell. “We completed 11 wells last year. We hope to effectively double that this year,” Shell chief financial officer Simon Henry told reporters last month.

Fracking a well, as any roughneck will tell you, is as much art as science. It was always going to take time to adapt the U.S. experience abroad–and it may not take in every country. But fracking is here to stay, scrambling a global energy picture that had long seemed settled. There’s no guarantee it will be golden, but we’re definitely entering the age of gas.

FOR TIME’S COVERAGE OF FRACKING, GO TO time.com/fracking