NGFE Reports: European Commission – No clear yes or no to shale gas

“I would like to apologize for giving more questions than answers,” said the European Commission’s Michael Schuetz, Policy Officer, Indigenous Fossil Fuels, Directorate-General for Energy.

Mr. Schuetz spoke at the Global Shale Gas Summit in Warsaw, Poland about EU Energy Policies & the Potential for Shale Gas in Europe to provide insight into the European Union’s energy policy and to raise some questions.

“Why do we care about natural gas?” he asked. “Basically it is used in every sector of our economy, power generation, for heating our homes and it keeps our industry running.”

“For the foreseeable future,” noted Schuetz, “it will remain an important part of our energy mix. We have seen in recent years a decline in indigenous production and an increasing import dependency that will rise.

According to Schuetz, Europe is mainly reliant on three suppliers: Russia, Norway and Algeria. But there are still advantages to using it.

“Natural gas is relatively climate friendly, and has a low carbon intensity, so it’s important for the transition to a low carbon economy.” He said the EU’s policy aims at drastic cuts in CO2 levels by 2050.

Schuetz admitted that a rise in indigenous natural gas production, via renewable sources like shale gas, could increase the reliability of supply in Europe.

He said, “EU Energy policy is working to ensure that business and consumers obtain safe, secure and sustainable energy at competitive prices. Environmental concerns are high priority but also energy supply has to be in line with our climate change goals.”

The EU’s second strategic energy review, said Schuetz, which was published in 2008, recognized the potential that unconventional resources could have, but emphasized both economical and environmental viability.

He listed the Commission’s energy policy priorities, saying “We don’t plan to revolutionize energy policy. First and foremost we have to implement the internal energy market, security of supply, the Renewables Directive, the EU Energy Strategy 2011-2020, Energy Infrastructure Package, Efficiency Action Plan, External Energy Relations and the Decarburization Roadmap 2050 (which covers electricity production, transport).”

Regarding shale gas production in Europe, Schuetz was frank: “The Commission is still in the assessment process. I was glad that the industry appears to be thinking over many questions that need to be resolved.”

“It would increase our security of supply, reduce our emissions and since it’s indigenous would bring economic growth. It can revolutionize the market and have implications for the global market – for example, LNG has been freed up recently.”

“But,” he continued, “The prospects for unconventionals are unclear. We have to further analyze that potential, and assess environmental aspects.”

“It doesn’t look so good for Europe at first sight. It is a relatively small – only 4% of unconventional resources would be located in Europe, and according to the International Energy agency unconventional gas could supply 8-10% of Europe’s gas demand in 2030.”

Schuetz added, “It will not be a revolution most likely, and Poland will not become a gas exporter. There’s been some speculation that Poland could become an exporter for Russia, but I do not foresee this.”

Further, he said that it is a question whether or not the shale gas industry will be open to sharing exploration results as Poland’s shale gas potential would only likely be known in 5-6 years. According to Schuetz other unconventional gas sources like coal bed methane, which could be better for the European market because of the acceptance of coalmining in Europe, should not be forgotten.

“What will be crucial is properly addressing environmental impact,” he said of shale gas. “We [in Europe] are much more densely populated than the US and citizens must be assured that shale gas drilling can be done in an environmentally sound way.”

Schuetz noted the backlash in the US over the documentary film about shale gas drilling, Gasland and said that the environmental consequences of shale gas production have suddenly become an issue there. “The industry needs to proactively inform and consult citizens beforehand, but not lecture them,” he said.

At a recent shale gas conference he attended in Amsterdam, he recalled the issue of securing wells was brushed aside by participants who said ‘don’t worry, we know what we’re doing’. Schuetz replied: “That’s not an answer that citizens in Europe will accept.”

“The less impact on nature, the more likely you can achieve public acceptance. Although 99% of fracing fluid may be sand and water, the remaining 1% may be very toxic, according to the public,” he contended. “You may be drilling much deeper but you still have to drill through aquifers.”

In closing his talk, Schuetz posed questions to all the Global Shale Gas Summit conference delegates in attendance for discussion, including how to get more precise and publicly available information on the reserves, how transparent the industry is in its willingness to be open in respect to environmental impact, and how to ensure that affected communities/regions benefit from unconventional gas activities.

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