Europe has been unable to repeat the shale gas revolution that has swept the United States, and that could prove to be the unlikely saviour of long-term EU efforts to spur renewables and curb greenhouse gases.
The United States has managed to lower greenhouse gas emissions as well as energy prices as cheap shale gas has displaced coal, prompting calls from industry for Europe and others to follow suit.
The argument is that natural gas, which emits less carbon dioxide than coal, can be a friend, not a foe, to environmentalists. But investors say the shale gas revolution will not be repeated in Europe.
"I wouldn't completely write off shale gas development in Europe, but certainly the scale and speed at which it happens will not be like in the US," said Chris Rowland, an associate at Ecofin, a British-based investment manager with around €1.5 billion of assets under management, covering global energy, utility, infrastructure and alternative energy sectors.
"It's a good fuel for reducing emissions but not a good fuel for decarbonising," he added.
A series of European Commission roadmaps envisage virtually carbon-neutral power generation by 2050.
Unless carbon capture and storage can be developed on a commercial scale, that means gas as a fuel has a limited future and should not be invested in too heavily, environmental campaigners say.
They are especially against shale gas, whose environmental credentials are questioned in Europe.
"We need natural gas as a transition fuel. However, we don't need such a huge amount of gas and certainly not cheap gas, because that would kick out not just coal, but also renewables," Greenpeace renewable energy director Sven Teske said.
In the medium term, the value of conventional gas is in providing reliable baseload power to supplement unpredictable renewables, which depend on the sun shining or the wind blowing.
Danish state-owned DONG Energy, which has relied heavily on coal-fired power generation, sees a combination of gas and renewables as the way to go.
"We see gas-to-power and wind energy as the ideal mix, together comprising clean and stable energy. Wind energy as the clean energy source, and gas-to-power as the balancing power," said Carsten Krogsgaard Thomsen, DONG Energy's acting CEO.
Continental differences in land, policies
In Europe, gas is likely to mean conventional gas for the foreseeable future as the barriers to shale stay high.
Higher population density and different rules on land and resources ownership explain in part why progress has been so much slower in shale exploration in Europe than in the United States.
Environmental impact studies are under way in several countries to examine fracking, the process to extract gas from shale formations thousands of meters below the earth's surface by injecting chemicals and water at high pressure.
The industry will need to change radically the way it approaches fracking if it is to have a future in Europe, said Andrew Gould, chairman of British oil and gas company BG Group.
European Union countries have barely broken ground on shale gas, with some 20 test drills compared with estimates of as many as 35,000 sites in the United States.
Poland, Europe's most ambitious advocate of shale, in March revealed its shale gas reserves are likely to be only one-tenth the size previously estimated.
Good news for renewables
Researchers at the Massachusetts Institute of Technology (MIT) say this is good news for renewables. "When shale is removed from the market, renewables gain more ground," they wrote in a report earlier this year.
Investment in renewable energy rose by 5% to a record €208 billion worldwide in 2011, but that growth depended to a large degree on government subsidies.
If subsidies are cut, the risk for Europe is that cheap coal – not gas – could dominate the market and carbon emissions carry on rising.
Most utilities in Europe cannot earn a profit from their electricity if it is generated from gas at today's prices, because gas – in contrast to cheap US gas – is too expensive, and coal and carbon emissions certificates are relatively cheap.
"At the moment it less attractive to invest in gas-to-power and renewables compared to coal," DONG's Krogsgaard Thomsen said.