It may not be a silver bullet, but…….

Writing for Global Europe, a leading website on EU foreign policy, Roderick Kefferpütz comments that shale gas is not a silver bullet for Europeans reducing dependency on Russian sources of energy, but it will be of great relevance to the EU energy market.

Few had predicted the natural gas market to change as dramatically as it did, writes Kefferpütz, a Brussels-based Political Advisor specializing in Eurasian energy and foreign policy and an Associate Research Fellow at the Centre for European Policy Studies.  He recently wrote a Policy Brief:  Shale Fever: Replicating the US gas revolution in the EU?

Discussions that were in the past focused primarily on satisfying the future insatiable demand for gas and rising prices, have been replaced by the reality of a market now characterized by a significant glut and depressed prices.

The recession has certainly played a role in today's gas market, but it is the increased prominence of LNG and particularly, the emergence of unconventional and shale gas, that has made a major impact on the market.

Innovative drilling techniques spearheaded in the United States have led to huge unconventional gas growth, from representing around 10 per cent of total US production in 1990, to approximately 40 per cent today.

The European Union hopes to replicate the US success.  Not only will commercially developed, domestic reserves of shale gas increase energy security, but natural gas has a perceived climate-friendliness; 30 per cent less carbon intensive than oil, 50 per cent less than coal and has negligible emissions of sulphur dioxide (SO2), mercury and nitrogen oxides (NOx) when compared to other conventional fuels.

However, Kefferpütz warns caution.  There are many roadblocks in the way of shale gas development including a lack of proper drilling equipment and a trained and knowledgeable workforce and stringent EU environmental regulations.

But he concedes that shale gas will be a big deal in Poland:

Poland holds some of the most attractive shale gas deposits in Europe: high quality, relatively shallow and often situated in sparsely populated areas, lowering the likelihood of resistance from local residents. The political administration is eager to make use of these deposits in order to improve the country’s energy security and, according to some officials, strengthen the EU’s position in negotiations with non-EU gas producers and suppliers. Poland is therefore undertaking large evaluations of its shale gas reserves and handing out many exploration licences to major companies such as ConocoPhilips, Marathon Oil, Chevron and ExxonMobil in addition to offering particularly attractive fiscal terms, hoping that this will create enough of a commercial incentive to develop its shale gas reserves.

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