Do not be seduced by a 'fracking" gas bonanza Under such circumstances, it is natural human behaviour to look for a saviour. Given our ghastly choices, it wouldn't be surprising if we were susceptible to false dawns. It is my view, and I'm aware I risk opprobrium for writing this, that the much-vaunted "shale energy" revolution could fall into this category. In recent months, newspapers have been full of reports of "game-changing" developments in America's oil and gas fields. US crude output is "poised to surpass Saudi Arabia's in the next decade," we've repeatedly been told, making the world's biggest energy importer by far "self-sufficient in fuel by 2020." By extracting oil and natural gas using technology such as the hydraulic fracturing - or "fracking" - of underground shale rock formations, America's energy industry is apparently able to employ millions of extra workers, while kick-starting a manufacturing recovery through cheap energy. Given that shale energy will wean the West off fuel from the Middle East, Africa and other "unfriendly" places, this technology, in a phrase I've read in at least half a dozen places lately, also has the ability "to redraw the geo-strategic map of the world." With the West on its economic uppers, and losing power relative to the rest of the world, a home-grown energy bonanza sounds appealing. No wonder David Cameron was last week adamant that Britain must be "at the heart of the shale revolution," as his Government backed plans to "frack" the UK's onshore gas reserves. The prospect of cheap energy, lower fuel imports - to say nothing of far fewer foreign policy hassles - is simply too good to miss. It strikes me, though, that a reality check is needed, as America's shale revolution may not be a "game-changer" after all. US gas production has risen from 580bcm (billions of cubic metres) in 2009 to around 620bcm this year. Shale now accounts for 30pc of US gas output, up from 1pc in 2000. That's significant, given that America produces around a fifth of the world's natural gas. In truth, though, Congress still outlaws US energy exports (both oil and gas). Very few exceptions are made. Yes, because of shale production, America now has a large gas surplus - which has driven local wholesale prices to a 10-year low, around a third of European levels. Yet the US "gas glut," and the resulting low prices, exist because America's gas sits behind a trade wall. Export restrictions could ease in theory, but America's energy security paranoia is likely to prevail. The current gap between US and European gas prices would anyway be eroded if the cost of Atlantic shipping is included, given that gas needs expensive LNG transport technology. In sum, global gas prices are likely to remain insulated from those in the US. Keep in mind, also, that two years ago, a US government study said Poland had shale reserves of 5.3 trillion cubic metres - enough to wean Eastern Europe off Russian gas. In 2011, Poland did its own study, which cut shale gas estimates to between 350bn and 750bn cubic meters - a rather different outcome. That's why, earlier this year, the mighty ExxonMobil pulled out of Polish shale gas development. When it comes to oil, shale production has once again allowed the US to build up a large stockpile, so keeping local prices a bit below those on world markets. Yet, for all the triumphalism, the amounts produced have been pretty low in the global context. The exploitation of "tight" oil formations at Bakken in North Dakota have helped US shale - plus Canadian tar sands - drive a rise in North American oil production averaging 0.5m barrels per day over the past two years, once falling output at other North American fields is included. The trouble is that recent increases in US/Canadian crude output have been entirely wiped out by production falls in other non-Opec countries. And even if North American shale oil/tar sands create an extra 0.75m barrels a day consistently, which they currently aren't, that is more than offset by the annual rise in oil demand from the rest of the world. That's the point. Even if Western oil demand falls - and it is predicted to fall slightly in 2013 - the emerging giants of the East are consuming at such a pace that global crude use keeps rising, and at a rate much faster than anything that shale looks likely to produce. Once subsidies are removed, shale oil and gas is far from cheap, not least because it requires the continuous drilling of small wells, rather than the long exploitation of big wells. So constant - and costly - drilling is needed just to maintain shale output, let alone increase it. US shale energy looks cheap, because domestic prices are cheap. But that's down to unsustainable tax breaks and laws that stop American energy exports. Some object to shale energy on environmental grounds. While I'm no geologist, reports of "earthquakes" in Lancashire during recent "pilot fracks" make worrying reading. It also appears that US shale production has, at the very least, had an indirect impact on water supplies, as underground aquifers have been damaged. Given the West's desperation for something - anything - to rescue us from our economic malaise, even the most determined environmentalists won't stop the shale juggernaut until evidence emerges of very serious damage indeed to human health and welfare. Maybe such evidence will emerge, maybe it won't. I just don't know. What I do know, though, is that the production implications of the shale revolution, and its related economic and strategic advantages, are being blown out of all proportion. When the big energy companies and Western governments push in the same direction, they can, for a while anyway, create any conventional wisdom they like, even one with little regard for the facts.