Shale gas is going to re-arrange the winners and losers in the global economy. And as that happens, investors will need to rearrange their portfolios as well.

Like any major new energy source, shale gas has the ability to confer massive wealth on some countries - and take it away from others. So how will that play out over the next decade? The U.S. is the obvious winner. It has been the first major economy to exploit fracking, and is already seeing a revival of its manufacturing industry as a result of lower energy costs. Shale gas will improve its trade balance. But in the medium term it will be the jobs that get created that will count for a lot more. Investors have started to notice, and already started moving back into the dollar and the Dow.

But America isn’t the only country with shale gas - just as it wasn’t the only country with oil and coal.

The U.K. will be a major beneficiary as well. It has a lot of shale gas, and the government is determined to start getting it out of the ground: it is offering generous tax breaks to companies developing new fields. There is one problem, however. The U.K. is also very densely populated, and the gas is underneath some wealthy areas. There are already protests in Balcombe in West Sussex over exploration plans. Still, the chances are it will go ahead. The government is getting behind the fracking companies, and the U.K. desperately needs something to revive its growth rate.

In Europe, Poland has potentially huge reserves, although early results have been disappointing. But if its gas can be developed, it will give another boost to what is already emerging as one of the star economies of Europe. Poland is already doing well, and shale gas will help it expand faster. Russia has huge reserves, but it has so much oil as well it doesn’t need to develop alternatives so quickly.

The wild card is France.

It has the largest reserves in Europe. But President Francois Hollande - in keeping with his policy of making sure his country remains untainted by any new industries, or indeed any form of economic growth at all - has banned all development.

But the French are no more able to turn down new sources of wealth than the British. If it changes policy, shale gas could yet revitalize the country. France is traditionally a major manufacturing economy, and cheap energy is the most important competitive advantage for factories. The labor costs and taxes might be horrendous, but France remains right in the heart of Europe, and cheap energy will tempt many manufacturers back there. Most global investors have written off France - shale gas could make them change their minds.

Elsewhere, China has huge reserves, and needs a lot of energy to sustain its economic boom. Shale gas may give a second leg to its industrial revolution. There is plenty of talk about a hard landing, but shale gas could keep the Chinese miracle going for another decade. The winners are clear enough. But the losers?

All of the major oil and energy exporters will suffer. So far, it is only in the U.S. that energy prices have started to fall. But as other countries develop their industries, don’t be surprised if the oil price falls. It is not just the price that matters. With demand falling, OPEC will have to cut supply to hold the price up. Either way, revenues fall.

The Middle East will be hit very hard.

Countries such as Saudi Arabia can try and diversify into new industries, but in truth, if that were easy they would have done it by now. Iran will be in a lot of trouble, and so will Libya, and Gulf states such as Qatar. You wouldn’t want to bet too much on Dubai prospering if it is not the financial hub of one of the world’s wealthiest regions any more.

Nigeria and Venezuela will be under pressure. Norway is the world’s sixth largest oil exporter: it has sensibly saved a lot of that wealth, but it will be hard to remain one of the world’s richest countries if that industry goes into decline. Russia might have its own shale gas, but it is oil exports that keep it afloat.

Many of those countries have regimes that will collapse if the economy runs into serious trouble. Will the governments of Saudi Arabia, Iran, Russia, Nigeria or Algeria survive a serious economic depression? You would not want to wager much money on it.

The big point is that shale gas is about to re-shuffle the way investors see the world.

Emerging markets have been getting safer and safer over the last decade - and drawing more money in. But if oil falls in price, many of them will turn volatile again. Meanwhile, economies that have been ignored as stuck with low growth, such as France or the U.K., may well start to seem attractive once again.

In fact, the shale gas boom will make the developed world a far better investment than the emerging markets, and investors will need to re-balance their portfolios accordingly.

Resources from : http://www.marketwatch.com/story/shale-gas-revolution-will-create-winners-losers-2013-08-07