The tragic Malaysian airline crash in Ukraine last Thursday has brought relations between Russia and the West to an all-time low. While Russia's role is being investigated, there is mounting evidence that the plane was brought down by a surface-to-air missile fired by Russia-backed separatists fighting against Ukraine in the country's eastern region. Apparently, the separatists mistook the civilian aircraft for a military jet. Russia has already come under significant pressure from the West for its role in the Ukrainian crisis.

Only a day before the unfortunate incident, the U.S. has announced further sanctions against Russia. The U.S. has been more aggressive in its actions against Russia. The European Union (EU), though, has been more cautious, which is understandable given that the region relies heavily on Russian gas giant Gazprom (OTC:OGZPY) to meet its energy needs. Indeed, the time has come for Europe to seriously consider developing its own shale resources to cut reliance on Russian gas.

Europe's cautious approach
Unlike the U.S., the EU has been reluctant in imposing harsher sanctions on Russia for its role in the Ukrainian crisis. Last week, the U.S. imposed further sanctions on Russia, targeting major companies including energy giant Rosneft. The EU, meanwhile, has been more cautious. On July 16, EU leaders had agreed to sanction Russian companies that help to destabilize Ukraine.

EU foreign ministers will meet on Tuesday to discuss the severity of future EU sanctions on Russia. However, given EU's reliance on Russia as a trading partner and the fact that it still imports a third of its gas from Gazprom, harsher sanctions are not likely. For Europe to take a more aggressive stance, it will need to cut reliance on Russian gas. Gazprom, which itself relies heavily on Europe, recently signed a major gas deal with China to diversify its revenue sources. It is time now for Europe to consider measures to reduce its reliance on Russian gas. However, Europe's options are limited.

Limited options
Europe can import more LNG from countries such as Qatar; however, it will have to compete with Asian countries which are willing to pay a higher price. Importing LNG from U.S. is an option, however, the U.S. places restrictions on exports of LNG to countries with which it does not have a free trade agreement (FTA). LNG projects require approval from the Department of Energy (DOE) and the Federal Energy Regulatory Commission (FERC) in order to export to countries that do not have a FTA with the U.S.

So far, only two projects have been approved by both regulatory bodies. Cheniere Energy's (NYSEMKT:LNG) Sabine Pass export plant was the first project to be approved. The plant is under construction and is expected to start exporting LNG in late 2015. Sempra Energy (NYSE:SRE) received approval last month for its Cameron LNG project in Louisiana. The plant is expected to be fully operational by 2018.

The U.S. can certainly meet some of Europe's energy needs; however, many more projects will have to be approved for that to happen. Also, the plant operators are under no obligation to export to Europe, especially if they can fetch a higher price by exporting to Asia.

Europe's other options include coal and nuclear. However, the continent is looking to cut down its carbon emissions; therefore coal is not a long-term solution. And in the wake of the Fukushima nuclear power plant meltdown in Japan, nuclear energy is not favored by several European countries. That leaves Europe with expensive renewable energy. Indeed, given this scenario, Europe should now seriously consider developing its shale resources.

Europe's wild card
Europe needs a shale revolution of its own. While it is not likely to match the one seen in the U.S., it will certainly help the continent to cut some reliance on Russia for its energy needs. Also, like the U.S., shale gas could play a role in reviving the EU economy, which has been stagnant.

In a 2011 report, the Energy Information Administration (EIA) said that technically recoverable shale gas resources in Europe were estimated at around 605 Tcf, accounting for 9% of the global shale resource potential. Last year, the EIA revised its assessment of global shale gas resource potential, and now estimates that Europe's potential is far greater than initially estimated.

According to data from Bloomberg, the EU has sufficient shale gas resources to free itself from reliance on Russian gas for around 28 years. Using data from the EIA, Bloomberg came up with a ranking of EU countries by recoverable shale-gas reserves expressed in years of domestic consumption. According to Bloomberg's calculations, Sweden leads with 250 years. Other countries with significant resources include Denmark, Poland, Bulgaria and France. However, Bulgaria and France have bans on shale extraction.

Indeed, opposition from anti-fracking groups has been one of the major reasons why Europe has not been able to develop its shale resources. However, this is an ideal time for European lawmakers to press the case for developing its own shale resources and cutting its dependence on Russia.