The EU Presidency: Focus on Energy and Unconventional

How the chair of EU presidency sees unconventional resources

Hungary presently chairs the European Union presidency for the next five months, and during that time one of the country’s areas of emphasis is energy policy: improving energy infrastructure, promoting innovative energy technology and coordinating the EU’s energy policy towards third countries.

That’s no doubt why Pal Kovacs, Deputy Junior Minister for Energy Affairs represented the Hungarian government at the Unconventional Gas Summit Paris 2011.

“We are followed by the Polish presidency in the EU, so we have a chance to push these issues forward,” he said of unconventional gas production.

“Governments need to learn more on this subject to be able to ask the right questions. The Hungarian government is formulating its questions regarding unconventional resources.”

According to Kovacs, Europe was in a transitional period at present. “When we move to a more green economy, governments will need to improve competitiveness, and employment in the context of the economic crisis.”

He continued, “The future of Europe will be decided in the next 2-3 EU presidencies, so that’s why it’s important to take part in the energy strategy and the Road Map 2050. From a European perspective it is important to improve relations with the most important energy suppliers.”

“Natural gas will play an important role,” explained Kovacs, “but existing infrastructure needs to be developed.”

He mentioned the development of energy access corridors, which he said was a goal of the Visegrad Group of countries: Hungary, Poland, the Czech Republic and Slovakia.

“Our goal is to construct a north-south corridor with the participation of these four countries to improve security of supply in the region,” he said.

Mr. Kovacs recognized the need for Poland to develop an indigenous source of energy, shale gas. He said doing just that would be a great challenge for Europe.

Regarding unconventional gas prospects in Hungary, he said his country was drawing a longer timeline than others.

He explained, “In 2008 we noted Hungary’s potential, through the activities of Hungary’s MOL and Falcon Oil & Gas Ltd., and the drilling of 10 experimental wells in the Mako trough.”

(Editor’s note: ExxonMobil and MOL exited their production and development agreement with Falcon in February 2010; Falcon thus became the sole operator of the 247,000 acre contract area.)

“The hydraulic fracturing trials were not successful so far,” Kovacs admitted, but went on to mention unconventional potential in Hungary’s Pannonian basin.

“The adaptation of technology from North America has not taken place, although the investor climate is in place,” he stated.