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Page added on January 27, 2014

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EU Readies for Shale Gas Breakthrough

Public Policy

Ukraine in May hosts a summit to explore the potential for shale oil and natural gas in Europe. Ukraine and its Eastern European neighbors may host some of the more promising shale basins in the region. Now Spain and Germany are looking to explore their potential. With the European Union outlining recommendations for shale exploration, the region looks ripe for a breakthrough.

Ukrainian company Nadra Ukrayny, along with co-sponsor International Gas Union, hosts a summit May 20-22 to discuss maximizing the benefits of shale exploration in the European community. Organizers say the event will have a pan-European focus, with strategy sessions focused on the shale potential from Eastern Europe to Great Britain.

Weeks before Ukrainian President Viktor Yanukovych sparked major unrest with his November decision to back away from the EU, his government signed a $10 billion shale natural gas deal with U.S. supermajor Chevron. Under the terms of the deal, Chevron agreed to pay an initial $350 million for exploration work in the Olesska shale, which Kiev says could produce more than 200 billion cubic feet of natural gas. Despite an uncertain political future, this means Ukraine is still one of more promising shale areas in the region.

Polish shale ambitions, meanwhile, were stymied in part by a decision from Italian energy company Eni to pull out of the country, the third company to do so since 2012. Eni said the geology was too complex to exploit now, leaving behind an estimated 187 trillion cubic feet of shale gas reserves. That too should pique future interest once technology evolves. Chevron remains one of the few players still in the Polish shale.

Last week, Rainer Seele, chairman of German energy company Wintershall, told delegates at a Berlin energy conference it was time for an honest debate about shale exploration. Late last year, German leaders agreed to keep a moratorium in place on hydraulic fracturing. Several European states have expressed reservations about the controversial drilling practice dubbed fracking. For Seele, it’s time for “an informed debate and legal clarity” because now, he said, the conversation is at a standstill. In 2012, a report found there may be as much as 100 trillion cubic feet of technically recoverable gas locked on German shale.

Spain too entered the fray last week when the central government filed a challenge against a decision to ban fracking in Cantabria, a region near the coast of the Bay of Biscay.  Regional leaders voted unanimously to ban fracking out of environmental concerns last year, but with Spain importing more than 70 percent of its natural gas needs, the 70 years’ worth of gas in Cantabria is too rich to ignore.

France and Bulgaria are among other European states with fracking bans in place. Last week, the European Commission embraced a series of recommendations meant to ensure appropriate safeguards are in place for members that choose to go ahead with shale exploration. The EU said the recommendations were part of a policy framework meant to guide regional energy policy through 2030. EU Environment Commissioner Janez Potocnik said shale gas is “raising hopes” in Europe. With energy companies clamoring to get in line, Europe may be on the cusp of a shale breakthrough.

By. Daniel J. Graeber of Oilprice.com

 



9 Comments on "EU Readies for Shale Gas Breakthrough"

  1. rollin on Mon, 27th Jan 2014 2:51 am 

    The pressure is on, the final scramble for gas and oil commences. Desperation reigns, the cold sweats have started.

    Instead of looking seriously how not to use gas and oil, hundreds of billions of dollars will be spent pursuing a short term gain. Pushing the ball down the road and hope there is not a cliff.

  2. DC on Mon, 27th Jan 2014 3:05 am 

    Yet another of the (unstated) reasons why the US is actively pushing to get Ukraine ‘into’ the EU. An entity controlled by the US currently. Good thing the US’s efforts to turn Ukraine into a Nato satrapy\energy colony were thwarted(this time).

  3. Harquebus on Mon, 27th Jan 2014 4:56 am 

    Desperate energy junkies. After the squabbling comes the fighting.

  4. Nony on Mon, 27th Jan 2014 5:19 am 

    USA! USA! Miracle on ice. Kill the commies. Out of Afghanistan…go mujahedin. Oh…wait. 🙁

  5. Meld on Mon, 27th Jan 2014 8:24 am 

    junkies be junkieing

  6. Arthur on Mon, 27th Jan 2014 9:28 am 

    Ukraine in May hosts a summit to explore the potential for shale oil

    Perhaps by that time the Ukraine won’t exist anymore. Can’t say I like this development. The old WW1 patterns are surfacing again: the western Ukraine (the poorest part of the country) is oriented towards Europe (Habsburg-Austria and Poland), the east is Russian-oriented. But the split is not so clear-cut like with Czecho-Slovakia or the UK. Here is a next Yugoslavia/Iraq/Syria brewing.

    http://www.spiegel.de/politik/ausland/ukraine-proteste-gegen-janukowitsch-weiten-sich-aus-a-945667.html

    Russia could intervene if the situation spins out of control.

    More on topic… yes it looks like the EU is inspired by the fracking success in the US (possible surpassing Saudi-Arabia) and suddenly gets second thoughts about the wisdom of putting all the cards on renewables, as they have done until now. It is unlikely though this will seriously undermine national programs for renewables, which replaces some conventional electricity generation. The fracked fossil will be used for cars and space heating.

  7. rockman on Mon, 27th Jan 2014 2:20 pm 

    Kermit was correct: “It isn’t easy being green”. Especially when one has to start paying big $’s to be so. All the folks in the EU want to go green…as long as it doesn’t cost too much and they have all the energy they need. Right now its Germany slipping. And the Spanish govt is trying to push frac’ng onto one of their states over its ban. And how will the mood of other EU countries change if some of that relatively cheap NG can make its way via pipelines from the ME?

    “Brown coal electricity production in Germany rose last year to its highest level since 1990, despite the country’s campaign to shift to green sources of energy.
    The increase prompted calls from Green politicians and environmental lobbyists for energy reforms to raise the costs of operating coal-fired power stations – especially those using brown coal, a highly-polluting fuel. But brown coal power producers hit back, saying any “forced changes” in Germany’s energy mix would not reduce carbon dioxide emissions in Europe, but shift them to other countries.

    The exchanges come as chancellor Angela Merkel’s coalition looks to revise Germany’s energy policies – maintaining commitments to green energy while also controlling the costs and protecting economic competitiveness. At the same time, Berlin is also grappling with an EU probe into subsidies paid to some industries to shield them from high energy prices. The German figures could reverberate across the EU as discontent grows over the bloc’s energy policies. The continent’s biggest utilities, in particular, have lambasted Brussels for measures they say have hurt industry without delivering hoped-for environmental benefits.

    Germany, which is the world’s largest brown coal miner, last year used the fuel – also known as lignite – to generate 162bn kilowatt-hours of electricity. That is up from 161bn kWh in 2012 and the highest total since the 171bn kWh recorded in 1990, when East Germany’s ex-Communist plants were still in full flow. Although energy from renewable sources – such as wind and solar power – has risen steadily over the past decade, to 147bn kWh last year, Ms. Merkel’s decision to phase out nuclear power has left a gap that only fossil fuels could fill quickly.

    Hopes that low-emission gas-based plants might make up for the lost nuclear power were dashed by the fact that gas prices have been relatively high and coal prices low. As a result, Germany’s carbon dioxide emissions, which rose from 917m tonnes in 2011 to 931m tonnes in 2012, are estimated to show an increase of 20m tonnes when figures are tallied for last year.

  8. Northwest Resident on Mon, 27th Jan 2014 3:40 pm 

    rockman — There is a word for that: desperation. And I’m sure you’ll agree, we ain’t seen nothin’ yet.

  9. rockman on Mon, 27th Jan 2014 5:21 pm 

    NR – No doubt you’ve already picked up on my dark anticipation. I think it’s more likely as we roll down the PO path we’ll resort to more damaging fossil fuel use like coal because it will be cheaper to produce electricity than trying to switch to alts. And for motor fuels? No problem…we’ll just export some more democracy and get it wherever we can.

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