Shale gas has shaken up the world, and now the world wants in on the action

Not a whiff of US shale gas has left the nation’s shores in the 3- or 4-year-old boom. Relatively little may ever be exported. Yet the disturbance that shale gas and oil have created can make them seem just as ubiquitous as the iPhone. In Europe, US shale has made the air dirtier, manufacturing less competitive, and Russia vulnerable. They have weakened OPEC’s influence on global oil and gas pricing (paywall), and undermined distant nations including Australia and Qatar.

No wonder there is a rush among nations to duplicate the shale boom. On Dec. 13, the UK approved hydraulic fracturing, the method used to drill in shale, and Germany blocked an attempt to ban it. China has accelerated licensing to develop its shale gas. Australia, already set to become the world’s largest exporter of liquefied natural gas (LNG), is examining how to develop its shale, too.

All want what the US has: a glut so large that gas sells for a third Europe’s price, and a fifth of Asia’s water-borne rate for LNG. US-benchmark crude oil sells for less than $87 a barrel, compared with $109 for the Brent sold in the rest of the world. At such prices, US carbon emissions are down to 1992 levels, and are still dropping, because gas is much cheaper to burn than coal in power plants. Blue-chip petro-chemical makers such as Dow, ChevronPhillips and ExxonMobil are planning gigantic new US plants that take advantage of the cheap gas feedstock, while European manufacturers, paying much more for raw materials, fall behind in competitiveness.

If all of the gas and crude oil are sold within the US, how have they disrupted countries near and far? Because producers have had to take supplies they previously intended for the US—such as LNG from Qatar—and divert them to Europe and Asia. The injection of these supplies where they were not expected has forced Russia’s Gazprom to lower its prices in Europe, and allowed Japan—the highest-paying market on the planet—to start obtaining cheaper LNG contracts, too. Qatar and Australia now face serious pressure to lower their LNG prices.

Rising US production of shale oil shakes OPEC’s ability to maintain a tight global supply, which is what gives the cartel the market power to obtain high crude prices. In past decades, OPEC has responded to challenges by flooding the market with supply, driving the price down and rivals out of business. But the Arab Spring has made it far more expensive to be an Arab sheikh—social spending has gone up to tamp down public unhappiness. So the OPEC nations are constrained from a price war.

Another impact has been a setback to Europe’s efforts to lower carbon emissions. Because the US gas is so cheap, fire-sale-priced US coal has poured into Europe’s power plants, undercutting the high local rate of gas there, and pushing up CO2 emissions. The injection of US coal into Europe has also been a double-whammy for Russia, faced with even greater pricing pressure in Europe, its main gas market.

Yet US drillers are losing money at such prices. Sixteen firms have applied to the Obama Administration for LNG export permits to capitalize on the higher prices abroad. What the impact thus far shows is that, to the degree they are successful in exporting, the commercial suffering overseas will only be worse.