Denmark Hoping for Shale Gas
The Danish production of gas in the North Sea has peaked and the country will have to import gas in 2021. Unless a test drill shows fair quantities of shale gas in autumn 2012.
During three decades Denmark has produced more than 210.000 million m3 of gas in the North Sea, and while this production will be declining over the next few decades, an opportunity for shale gas is emerging onshore in northern parts of the country. A change of government in late 2011, however, has changed the countries’ focus from fossil fuels to sustainable energy and to protection of the environment. The new minister of energy has a positive view of shales gas - on a number of conditions.
Minister for Climate, Energy and Building Martin Lidegaard says to Natural Gas Europe: “The Government wants to convert the energy and transport system to 100 percent renewable energy by 2050, and we’ve proposed a range of specific initiatives that are to lead to a substantial reduction of the consumption of fossil fuels as well as to an increase of the share of renewable energy. Such a transition away from fossil fuels will take time, which is why oil and gas will play a role for many more years. In the meantime tax revenue from the oil and gas production will benefit Danish society and our welfare”.
In the months to come the Government and the opposition are negotiating how this change away from fossil fuels is to be financed. The country has a tradition for consensus in parliament on decisions on long-lasting changes of infrastructure to ensure investor safety.
Potential for shale gas
In about a decade shale gas may help the financial side of the problem. France Total E&P Denmark and the Danish state-owned Nordsøfonden have decided to use about € 27 million in 2012 to search for shale gas in the northern part of the Jutland peninsula. The companies hold two exploration licenses and have committed themselves to a test drilling in this license area, which is the most mature of the two licenses.
According to project coordinator Henrik Nicolaisen from France Total E&P Denmark, there might be about five times as much shale gas onshore as the country has recovered from the North Sea so far. He estimates the chances of finding commercially interesting quantities to about 20 %, and in case of success production might start in 2020.
The project has gathered little public interest so far, although the hydraulic fracturing connected with shale gas has caused environmental problems in other parts of the world. Henrik Nicolaisen says the gas is found in the Alun Shale three to four kilometers below the surface. This is well below the Danish groundwater, which is used for drinking without any cleansing and is traditionally well guarded by the political parties that constitute the new government.
Martin Lidegaard’s comment on the future of the Danish shale gas does indicate this interest: “If commercially interesting quantities of shale gas are found in Denmark, it will only be produced if it can be done in an environmentally sound way. The fact is that today we don’t know whether we can produce natural gas from shale in the Danish subsoil. Exploration is at a very early stage”.
“I’m well aware of possible issues in relation to protection of the environment in exploring for and producing shale gas. Before we approve a drilling programme for an exploration well, all issues in relation to protection of the environment and safety in general will be dealt with to safeguard such an operation. All precautions will be taken in order to protect any groundwater resources”.
Declining production in the North Sea
The minister will have to focus on the state’s revenue from gas production in Denmark too, however. The country has supplied itself with gas from the North Sea since the early 1980s, but production peeked in the past decade, and the Danes will have to rely on imports from somewhere between 2021 and 2030.
Minister Martin Lidegaard says:
“Production of natural gas from the North Sea will continue, though all estimates show a general decline over the next 10-20 years. But new resources are still being found and developed in Denmark, and we’re planning a new licensing round in the Danish part of the North Sea that is to be opened in 2013”.
Image credit: Carsten Snejbjerg