Thanks to a revolution in shale-gas exploration, the United States has become the world’s top producer of natural gas, overtaking Russia last year. Is the revolution about to be replayed in Europe?
Radoslaw Sikorski, Poland’s foreign minister, certainly thinks that is possible. “Production of shale gas in Europe can change its energy paradigm,” Sikorski told an international seminar on shale gas in Warsaw in April. The fact that Warsaw was the venue for this year’s Global Shale Gas Summit, the most important gathering of industry and government experts on ‘unconventional’ gas, was itself evidence of the excitement generated by the possibility that Poland’s large resources could now be exploitable.
Over the past decade, new techniques have made accessible natural gas found in tightly layered, sedimentary formations of rock known as shale. The technological and financial challenge of tapping into this ‘unconventional’ natural gas remains substantial, but the industry – encouraged in part by tax incentives – has rushed to drill in Poland, which is believed to hold Europe’s most significant reserves of shale gas.
The US firms ConocoPhillips, Exxon-Mobil, Chevron and Marathon, and Canada’s Talisman Energy, have all won concessions, and Polskie Górnictwo Naftowe i Gazownictwo SA (PGNiG), Poland’s state gas company, has also begun drilling with assistance from Schlumberger, a services firm.
If the estimates of Polish shale-gas reserves are confirmed, the effects would be dramatic. Poland could become self-sufficient for decades. The EU’s proven reserves of natural gas would grow by half. And, as a result, Europe’s dependence on natural gas from Russia, Algeria and other potentially troublesome suppliers would fall dramatically.
It will, though, be years before accurate estimates of the potential are available, either in Poland or elsewhere in Europe.
Poland is striking a note of caution, but still foresees a big change in its supplies of energy, two-thirds of which currently comes from Russia. Donald Tusk, Poland’s prime minister, suggested earlier this month that Russia’s contribution could fall to one-third.
Another third would be covered by shipments of liquefied natural gas (LNG), primarily from Qatar, through a new terminal near the German border that Poland hopes to open in 2014. The last third, he suggested, would come from domestic production – more, if the promise of shale gas is realised.
Different approaches
The US is taking a very active interest in Poland’s potential. Poland is one of three partner countries – along with China and India – in a new State Department scheme to assist other countries to identify and use their unconventional gas resources, the Global Shale Gas Initiative.
The EU is taking a more cautious, wait-and-see stance. A stocktaking paper presented by the European Commission in May, at the launch of a public consultation on the EU’s new energy strategy for 2011-20, mentions shale gas only in passing. So far, there is no specific policy framework guiding decision-making on shale gas in the EU.
To date, Poland is the only EU member state that appears determined to reap the perceived benefits of large-scale production.
Its hopes could yet be diminished substantially by environmental concerns, particularly the possibility that chemicals and water used in the drilling process could enter drinking-water supplies.
But however little Europe develops its shale gas-fields, the huge growth of shale-gas production in the US – from virtually zero a decade ago to around one-fifth of the US’s natural-gas production – is already re-shaping its own, and the global, gas market, especially for LNG. “Because we have discovered and we have the technology to develop efficiently large quantities of gas from shale, global prices of LNG have decreased,” David L. Goldwyn, the State Department co-ordinator for international energy affairs, said this summer.
As a result, several projects for LNG terminals in the Netherlands and Germany’s North Sea coast have been cancelled in the last couple of years, most recently at Eemshaven.
Click Here: Fjallraven Kanken Art Spring Landscape Backpacks