“Shale gas might be a game changer by bringing gas, coal and finally oil prices down. And cheap oil will no drive industries to make high investments into alternative raw materials”. To say it is Martin Schnee, partner of Breslin, one of the most important transaction strategic advisory companies in Europe in the field of bioeconomy, with offices in Zurich, London, Frankfurt am Main and Munich. In the context of the development of the bioeconomy, Schnee warns against the increasingly important role played by shale gas, a natural gas that is found trapped within shale formations. Shale gas has become an increasingly important source of natural gas in the United States since the start of this century, and interest has spread to potential gas shales in the rest of the world. In 2000 shale gas provided only 1% of U.S. natural gas production; by 2010 it was over 20% and the U.S. government’s Energy Information Administration predicts that by 2035, 46% of the United States’ natural gas supply will come from shale gas. Schnee speaks with us about bioeconomy from an investment point of view, considering that “alternative energy and biomaterials from alternative sources might make a large contribution to Europe’s future growth”.
Interview by Mario Bonaccorso
What’s the role of bieconomy in the perspective of growth of Europe for the next decades?
The utilisation of biological resources for the production for industrial purposes including manufacturing, alternative energy and biomaterials from alternative sources might make a large contribution to Europe’s future growth. The development of the new processes and products could defend Europe’s currently leading role in e.g chemical production and engineering. But one has also to keep in mind that extensive production of shale gas (e.g. in Usa) might change current positive framework and furthermore, the growth markets are abroad.
What do you mean: what will be the role of shale gas?
Shale gas is expected to be a game changer by bringing gas, coal and finally oil prices down. And cheap oil will no drive industries to make investments into alternatives. The question will be, how deep will be the impact which will be influenced by energy prices.
Is the bioeconomy really the future of the main industrial sectors, such as Chemistry and Energy?
Bioeconomy will be part of the future with a different share of contribution in the mentioned industries. As approximately 10% of the produced oil is being absorbed by the chemicals industry for the production, we assume there will be a larger contribution in Energy. Nevertheless, Chemistry is thriving for new raw materials for various reasons.
In particular, coming out of the financial crisis and economic slowdown of the past years, the global chemical industry is seeing changes related to energy-price dynamics. The chemical industry is confronting unprecedented hydrocarbon price volatility. In addition, energy prices are significantly higher than they have been for the past two decades, and they are higher than they were coming out of previous recessions.
How is the trend of big corporation’s involved in bioeconomy?
Looking at big chemicals companies such as e.g. BASF and Evonik, they are using industrial biotech for many years for the production of vitamins, amino acids or other specialty chemicals. But currently the industry is looking for processes, which might replace the early parts of the crude oil-based chemical value chain by using renewable raw materials and producing key chemicals, which then could be used as starting materials for the ’classical’ production. One big source could be ubiquitous carbon dioxide which is under investigation. But there is still a long way to go!