Europe wants the energy, but not the fracking
07/15/2014 1:47 PM
07/15/2014 2:04 PM
Fracking for oil and natural gas remains slow to take hold in Europe in spite of deepening fears over the continent’s energy dependence on Russia.
Europe is under increasing pressure internally and from the United States to cut energy imports from Russia, which supplies the continent with some 30 percent of its natural gas. But environmental worries and drilling setbacks continue to hold European nations back from fracking to exploit their own potentially large natural gas reserves, even with tensions high over Russia’s seizure of Crimea and ongoing violence in Ukraine.
“There is still a lot of local opposition in Europe, and this will be far from an easy task,” said Anne-Sophie Corbeau, the senior gas analyst for the Paris-based International Energy Agency.
The Obama administration said it was working with European countries to help identify their natural gas resources, and Congress is holding hearings about how to counter Russia’s energy influence. A constant theme is Europe’s deep polarization over hydraulic fracturing, known as fracking, a drilling process in which water and chemicals are blasted underground to break shale rock and release the oil and natural gas within.
“The curious position that Europe continues to be in is to ask vociferously and aggressively for U.S. shale gas and then be totally unwilling to develop their own resources,” said Sen. Christopher Murphy, D-Conn., who’s the chairman of the Senate Subcommittee on European Affairs.
German Environment Minister Barbara Hendricks said this month that the country would have no fracking for economic purposes in the near future. The government proposed a set of rules that include a fracking ban above a depth of 3,000 meters _ 1.9 miles _ for the next seven years, while the opposition Green Party wants to go even further to preserve what’s been a de facto fracking moratorium.
In Germany, a leader in solar and wind energy, fracking is deeply unpopular and environmental campaigners have substantial influence.
“The risk of our groundwater and drinking water supplies being severely and permanently impaired by use of fracking technology does not justify the short-term promotion of relatively small amounts of gas,” said Julia Verlinden, energy spokeswoman for the German Green Party.
In France, which boasts the second largest estimated shale gas reserves in Europe, President Francois Hollande promises to keep his country’s fracking ban in place so long as he’s in office, which means at least through 2017. Bulgaria also forbids fracking.
“Europe is not going to be the leader in shale development outside of North America,” said Pavel Molchanov, an energy analyst for Raymond James and Associates.
Even European countries that desperately want to develop fracking industries have run into drilling problems. Poland was supposed to lead the continent in fracking. But Exxon Mobil, Talisman Energy and Marathon Oil gave up on the country after poor results from their exploratory wells, and the U.S. Energy Information Administration slashed its estimate of Poland’s shale resources by 20 percent.
“In Poland the challenge is not the politics, the challenge is the geology,” Molchanov said.
Energy companies had also been optimistic about Ukraine, but Shell recently halted drilling activities in the face of separatist violence there.
Despite such setbacks, Europe might hold enormous fracking potential. The U.S. Energy Information Administration estimates that Europe could have 470 trillion cubic feet of recoverable shale gas reserves, which isn’t that much less than the 567 trillion cubic feet in the U.S.
Dominique Ristori, the director general for energy at the European Commission, said the European Union was launching a program to review the science of fracking. Europe needs to manage the question of whether and where to frack “less on emotion and ideology and more based on evidence,” Ristori said in a discussion last week at the Center for Strategic and International Studies in Washington.
Several countries are interested. The United Kingdom, which forbade fracking up until 2012, is now embracing it. Netherlands has also softened its position.
There are test wells planned for Denmark, and Chevron is searching for shale gas in Romania. Oil and gas companies continue exploration in Poland.
But Europe is short on drilling rigs and other infrastructure for fracking, according to analysts. Further, Western Europe is more densely populated than the U.S. and the shale resources there are often near major cities, which makes them more controversial to develop.
Raymond James analyst Molchanov said none of the European shale-gas exploration efforts were close to being ready for commercial development.
Argentina and China, meanwhile, are moving faster than European nations are in trying to follow the U.S. fracking boom, he said.
“Shale gas in Europe gets a lot of press attention and a lot of hype, particularly with the Ukrainian crisis. But in practical terms that’s really not where the industry is moving forward the quickest,” Molchanov said.
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