Europe must be sold on shale's merits Shale gas is bringing about a revolution in the US of economic, industrial and geopolitical significance: natural gas prices have plunged; polluting coal is being displaced in power generation; energy-intensive manufacturing has undergone a renaissance; and, along with oil extracted from shale rock, abundant natural gas holds out the prospect of US energy independence. The shale revolution has so far bypassed Europe, but its impact is nevertheless being keenly felt here. At their lowest levels in 2012, natural gas prices in the US were about a fifth of import prices in Europe. Cheap coal supplies, discarded by US power companies, are finding their way across the Atlantic, increasing carbon emissions. Our manufacturing is losing ground to US competition, which benefits from cheap gas-fuelled energy and chemical feedstocks. Why then is not Europe, like China, trying to emulate the US shale revolution? The answer lies in the hesitation of policy makers in Brussels and most EU states, and a regretfully passive approach from the domestic gas industry. In France, Bulgaria and the state of North Rhine-Westphalia in Germany, shale gas is under a moratorium. Environmental groups have taken a highly critical attitude to shale gas developments, focusing in particular on legitimate concerns about water contamination. The good news is that in a recent vote, the European parliament avoided a total ban on shale gas development, insisting on regulation and more research instead. The UK government has also lifted its own moratorium, while Poland has taken steps to encourage the industry. But without industry action, the impasse will continue elsewhere. What must the gas industry do to convince the European public of the benefits of shale gas? I recommend a four-point plan. First, the industry must clearly embrace the International Energy Agency's "Golden Rules for a Golden Age of Gas," published in the spring of 2012. This entails transparent measuring and monitoring of environmental impacts and high standards of water and chemicals use. By inviting environmental groups and the public to monitor implementation of these best practices, industry can head off environmental criticism. Second, the industry should commit to a research programme to reduce water and chemicals use in shale gas development. This research programme should be set up under the leadership of universities and energy institutes to make its results verifiable, transparent and acceptable to the public and environmental groups. Third, the shale gas industry should be embedded in a long-term sustainability policy, which includes investing in renewable energy and carbon capture and storage. Fourth, industry should co-operate with central and local governments to design formulas that allow the communities where shale gas exploration and production takes place to share in the proceeds. Local communities could receive a tangible share of revenues to improve local infrastructure. In the Netherlands, the second-largest gas producer in Europe, we adopted such a formula to drill in the environmentally sensitive Wadden Sea, an internationally protected nature area. A proactive approach as outlined above would be a crucial step in building support for environmentally responsible shale gas development in Europe. It would require a strong commitment by the natural gas industry to engage with academics and environmental groups, in order to develop a sustainability policy. But by doing so, the industry can earn a solid "social licence to operate" in European shale gas. If the gas industry does not win the shale argument, Europe could miss out on a huge opportunity: the IEA estimates that unconventional gas production could offset declining conventional gas output in Europe after 2020. That could strengthen Europe's hand in relation to gas exporters such as Russia, a political boon. It could bring down European gas prices, displacing coal in power generation as has happened in the US, and providing a flexible partner for the rising share of power generated from intermittent renewable sources. Failing this, the IEA projected this week that coal would rival oil as the world's most important energy source by 2017 - a fate environmental groups and the gas industry alike want to avoid. The writer is director of Energy Academy Europe