The UK Government has recently announced tax breaks for companies engaged in drilling for the fuel, leading to predictions of the sort of bonanza not seen since the discovery of North Sea oil in the 1970s. There have even been suggestions that a European shift to shale gas could have dramatic consequences for Russia, ending dependence on the world's largest country and threatening the legitimacy of the Russian state at home.
One of the mooted consequences of the successful extraction of shale gas is the side-lining of Russia as a source of energy by Europe.
Russian gas is critical to the European energy supply and the state has shown itself willing to use it as a foreign-policy tool, for example closing a major pipeline in Ukraine over alleged non-payment of bills.
The Russian government is also regarded as highly dependent for its power and legitimacy on the wealth that oil and gas money provides, leading some experts to suggest that if Europe finds an alternative source, and if the price of fossil fuels on the global market falls as has been the case in the US, the economy and the political system could come under threat.
Hudson thinks this is far-fetched and says demand for the country’s oil is likely to bear up whatever happens to the gas.
Fracking techniques have been applied to oil too – there is such a thing as shale oil – but the industry is at an even earlier stage and a US prohibition on exporting domestically produced oil means that even as it comes online, it is unlikely to affect world prices too much.
Furthermore, there is not enough US gas to suppress world prices.
"In terms of the US, they are getting towards the point where some people think they are self-sufficient in energy, but that’s not the same as becoming a supplier."
"The way to see what the markets think is to look at the commodity markets and the discrepancy between US prices and European prices."
"For the last few years, there has been a very significant gap that didn’t seem to be closing until recently."
The UK and European industry is at an even earlier stage, she warns, and it is far from clear that it will get off the ground at all.
"We are only starting on the exploratory phase," she said. "We might not find it as easy to explore as in the US."
"For one thing, they probably do not want to sink into the ground or have poisoned water or all these things the environmentalists tell them will happen."
"Our geography isn’t identical to theirs. There’s an awful lot more space in the US around these sites than there is here."
"The other thing the enthusiasts don’t mention is if you are at all concerned about the environment, it is still an issue, you have to do damage to the environment to extract it."
"It damages the environment to take it away from the drilling sites and it’s incredibly water-intensive as well."
"It’s probably less of a problem for the UK, but a major issue for some other countries that might have potential for shale gas but might not have the water to get it out of the ground."
Russia’s focus on Europe is likely to be beneficial rather than detrimental in the near-term, with the economic effects being only marginal.
"On the Russian stock market, Gazprom is huge, but global gas markets are regional, so we have got three distinct markets: the US, Europe and Asia, and Gazprom has been really focused on selling into Europe."
"In the meantime, it puts pressure on Gazprom in that it has a lot of long-term contracts, so when it comes to negotiating them, even the possibility of competitor supply might be enough. Its long-term profitability is less secure."
Guy Stern, head of the multi-asset and macro strategy team at GARS, recently told FE Trustnet that the multi-billion pound absolute return portfolio – the largest retail fund in the UK – continues to see Russian stocks as cheap and held a position in them.
Hudson, who contributes to the ideas utilised on the fund, says that she is not in agreement with this analysis.
"GARS takes a one- to five-year view, but I am a thematic strategist, so I have a longer time horizon than that and I am more interested in how the world ends," she said.
"Russia has its problems. One of them is connected with its dependency on the energy industry."
"While the energy prices have been very strong, it has strengthened the currency, making other parts of the economy less competitive. It seems it hasn’t got the political will to diversify."
"The Russia enthusiasts will say that it’s very cheap, but people who are more sceptical will say that they do not seem to be willing to carry out the institutional reforms that will allow them to develop economically."
Hudson alludes to the recent trial of a corpse, in which Sergei Magnitsky, who died in prison after being detained in horrific conditions, was tried in his absence.
This type of institutional decay is a reason for investors to be wary, she says, as well as the lopsided character of the economy.
"It isn’t diversified. It’s nearly all about the energy side and a few banks, and the rest of the economy doesn’t seem to have developed," she said.
As far as the UK goes, if the drilling gets off the ground then it will improve UK energy security, she added.
The most significant effect is likely to be the boost it has given to the US.
"The change in the US in terms of their energy markets will make their economy more competitive," she said.
