Friday, 7 March 2014

Crises in Ukraine can lead to the boom in fracking industry.

If there is no diplomatic solution of Ukraine crises, it can lead to the boom hydraulic fracturing. Might be there is the own reason of Ukraine and Russia for this crises but  USA will be gainer from this crises and EU will looser 

The US and EU can lead to the financial sanction against Russia to create pressure, but the reality is that in the current situation Europe need Russian natural gas. The pipelines passes through the Ukraine. If the tension continue then Russia can use  Natural Gas as Weapon. 

The economic sanction will not lead to early effect in Russian economy as Russia itself is a 4 trillion economy, but Europe can coll down immediately without the Russian Gas.

But one thing is clear if there no friendly relation Between EU and Russia, then  EU can go for then hydraulic fracturing. If the environmental rule of EU don't permit to do so then the USA can enjoy this situation and hydraulic fracturing activity will increase in USA. USA is already leader in hydraulic fracturing.

In the current condition USA is profitable in both condition, If USA get success then it will strengthen its step in UKRAINE. If  things are again US then it will be the leading supplier of Natural GAS to EU.

The same time if EU freeze the Russian asset then Russian will also put same impose on EU assets in Russia. There is chances that these sanction can back fire.

In strategic point of View Russia will gain from this conflict, but if the  strong long term conflicts arise between EU and Russia, then EU will be the looser. In short term EU will face the GAS crises, and US will enjoy this situation. 

Might be the Guar farmer of Rajasthan can enjoy this situation, but after looking all the condition i don't find any gain for Rajasthan Guar Farmers in coming future. Because the total use of Natural gas will same in all condition, SO the overall demand of  hydraulic fracturing process will be same. The hydraulic fracturing can shift from one region to another region in the over all scenario. Another fact is that in the next 7 month there will low requirement of energy.

Ultimately the key is in the hand of BRICS economy. Strategically Russian and friendly relation with Indian and China. There is old saying in India. The exact looser in  battle is "battle ground", where distraction take places. This time it is UKRAINE.

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