SHALE REVOLUTION Shale in Europe The US shale experience has put the spotlight on Europe
where exploration is underway in a number of countries. Europe currently imports about 60% of its gas according to the IEA. This is estimated to grow to 83% by 2030, due to increasing demand, stronger environmental laws, and declining production from established fields. A report by the EIA puts the volume of technically recoverable
shale gas in Europe at 17.5 trillion cubic metres (compared with 24.5 trillion in the US). A study by the European Centre for Energy and Resource Security (Eucers) suggests that unconventional gas resources might be able to cover European gas demand for at least another 60 years [adding that the region’s high population density could pose problems]. The world’s largest oil companies are reportedly busy securing land across Europe with a view to exploiting the region’s shale gas reserves. Shale development is lauded as improving Europe’s energy independence, generating new revenues for landowners and governments, creating jobs, and stimulating economic growth. Key advances in extraction technology and
low gas prices have not gone unnoticed in Europe. Poland is among those countries most keen to tap new energy sources and break the country’s reliance on coal – and gas imports from Russia. Others are also keen to push ahead with shale exploration, with test drilling underway in several EU Member States; including the UK, Germany and Poland. Cuadrilla Resources bored its first shale gas well in the UK last year, ExxonMobil recently finished drilling its sixth well in north-west Germany, and Chevron is active with its first well in Poland. Others are less enthusiastic. The Bulgarian National
Shepherd. “In fact, the procedures for authorising shale gas activities are no different from the procedures for conventional hydrocarbons,” she adds. Importantly, the UK government’s energy plans could cost billions of pounds if the price of gas falls significantly because energy policy is based on the assumption that future gas prices will be high. The emergence of shale gas – and the predicted boom – suggests that gas prices may actually fall in the future. “Overall the government approach
is broadly favourable to shale gas, but there are political tensions within the coalition, trying to reconcile the drive for renewables with the potential for a cheap, job creating, economy
The British Geological Survey estimates the UK shale gas reserve potential at 150 bcm
transforming energy source which shale gas presents,” says Shepherd. Cuadrilla Resources estimates
Assembly recently voted to impose an indefinite ban on shale exploration and extraction using hydraulic fracturing or other similar technology. Indeed, a hard-hitting editorial in the Trud newspaper accused pro-Russian Bulgarian supporters of fomenting protests against shale gas operations in the country. [Yes, politics is never far from the surface in relation to energy matters, especially in Europe]. Last year, France voted to outlaw hydraulic fracturing. Even South Africa is sceptical, even though the estimated resource base would have the energy equivalent of 400 years of South African fuel consumption of around 500,000 bbl/d, according to supporters. In the UK, although the government seems to acknowledge
that shale gas could play an important part in the energy mix, it is not driving it forward with any sense of commitment or urgency, according to Elizabeth Shepherd, Head of Environment and expert in shale gas at international law firm Eversheds. Ofgem’s report into the impact of unconventional gas on
Europe, completed last June, was only published last month, leading to criticism that it is out of date. It acknowledges that there is potential within Europe for unconventional gas to become a major source of supply, but it comments on factors such as environmental constraints and/or environmental compliance costs without taking developments since June into account. “From a legislative point of view, there should be nothing holding back at least the exploration of shale gas,” says
the total gas in place in the Upper Bowland Shale of the Pennine Basin near Blackpool, Lancashire at 5.7 tcm. The recoverable resource will, of course, potentially be much lower, By way of reference, the UK consumed 0.09 tcm of natural gas in 2010. The British Geological Survey (BGS) estimates the UK shale gas reserve potential at 150bcm.
Regulating Shale The major obstacles to shale
development in Europe (particularly gas) remain a combination of regulatory and environmental concerns. Many in the industry have been quick to label shale gas the ‘green’ alternative to coal and a vital tool in Europe’s fight against climate change. However, doubts relate to the
negative side-effects of hydraulic fracturing. The toxicity of fracking chemicals and how they are disposed of and with the large volumes of water needed are just two examples. A European Union-commissioned
study recently concluded there is no need for new legislation to regulate
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