Shale Gas in Europe: Ready, Steady, Go

In a session devoted to unconventional gas at the European Autumn Gas Conference in Paris, France, Bruno Courme, Managing Director at Total Gas Shale Europe portrayed Europe’s various reaction to how individual countries were developing their shale gas resources, or not.

“We find countries like Poland which has a huge activity, with strong incentives towards ensuring their energy independence. In Germany they are not so much used to such activities. In France, shale gas has been banned in practice through the ban of hydraulic fracturing.”

He asserted, “One of the lessons to draw from this is that acceptability has to be our first priority in Europe. Unconventional gas is still in its infancy in Europe, and there are challenges associated with its production but it will only be produced if civil society is convinced,” he said.

Contamination issues were one issue he mentioned.

“You have to get well integrity properly done,” stated Mr. Courme, who added that there were also issues with water, like where it was going to come from. “Interaction with local communities is also crucial.”

Europe was going to need the additional energy from unconventionals as well, according to Peter Hagen, General Manager, Gas Commercialization, Europe of Chevron Global Gas, who noted that shale gas had become a global phenomenon with significant resources in over 30 other countries.

He said that Chevron was involved in shale gas in Poland, Romania and Bulgaria.

“There is big potential but the launching point is quite different than that of the US in the year of 2000,” he explained, adding that the US had gas market integration and interconnectivity.

Hagen said the O&G services industry in Europe needed to ramp up; more rigs were needed, for one. He also mentioned the difference on the continent of governmental owned mineral rights, compared to those in the US.

“Shale gas is natural gas, pipeline gas, and it will be LNG,” he explained. “It’s all going to be a part of the supply picture in the future. We’ve long known that the US had gas reserves, but it was unlocked through hydraulic fracturing and horizontals.”

Of the other major changes as a result of the shale boom, he mentioned significantly lower prices for natural gas, as low as in 1971, he said.

“In the Marcellus,” recalled Mr. Hagen, “it supported 140,000 jobs for the region and contributes $1.2 billion dollars in taxes. To be successful in Europe, we must utilize best practices, adapt them to the European market and gain the confidence of stakeholders.”

Regarding the concerns about hydraulic fracturing, he said other companies had safely been using it for 60 years.

“In the US Chevron voluntarily lists those chemicals used in fracking and we will disclose them for European wells. Fracturing is done three kilometers below the water table.”

He said that Chevron was currently drilling its first exploration well in Poland, with six layers of cement steel casing, comprising eight total layers, and would test the integrity of those layers.

“We are working towards full recycling of all our water. We provide test results to all well owners in the area, monitored by independent institution.”

Was Europe ready for unconventional gas? asked Hagen.

He concluded, “As an industry it’s our task to show that we can produce natural gas safely and cleanly. The economic development should not come at a cost to people or the environment.”

William Wilson, Barrister at UK law firm Burges Salmon LLP provided some legislative background to how shale gas was being developed in Europe.

In response to his query of what the reported environmental impacts were, he provided examples of the concerns that had been raised in a variety of reports, such as methane contamination of groundwater.

“I want to be told that it can be dealt with and it can be addressed,” he commented.

Mr. Wilson emphasized that water use, water contamination and disposal of wastewater were all important issues surrounding shale gas E&P.

He made mention of the seismic activity that had occurred due to hydraulic fracturing in the UK. “Opinions vary about how serious that was; it’s up for the industry to say why it’s not a serious issue.”

Fracking chemicals was another issue he touched upon. Wilson commented: “You show me why I shouldn’t be concerned about it and I’m prepared to hear the evidence.”

He asked, “How is industry addressing these concerns?”

“A lot of time, money and effort is being wasted in political lobbying that is counter productive and completely ineffective. Serious consideration of the concerns raised and properly designed E&P proposals which provide technical and engineering answers to those concerns would be more effective,” he said.

Speaking of the hydraulic fracturing ban in France, he said, “Why would these places ban exploration of what is clearly a very valuable resource? Because the industry hasn’t convinced them yet that it isn’t detrimental to the environment.”

In terms of existing EU regulation, Wilson named the Water Framework Directive, Groundwater Directive and the REACH chemicals regulation. He said future regulation could emerge this year.

“Can European regulators and governments be persuaded?” asked Mr. Wilson “Transparency of fracking chemicals is a good start. It will almost certainly be required in the EU I think.”