• Natural Gas News

    Voice of Russia: Shale gas crisis

    old

Summary

With only Poland actively looking for shale, it appears hopes for a breakthrough in shale gas production beyond the U.S. remains but it will be realized no earlier than 2015

by:

Posted in:

Press Notes

Voice of Russia: Shale gas crisis

The outgoing year has failed to make any progress in the so-called “Shale Revolution.” No new players have appeared on the raw material market, while the old ones have encountered problems. In these circumstances, experts say that the shale gas recipe suggested by the U.S. for energy independence has not become a panacea.

Meanwhile, only the U.S. is actively producing shale gas out of all countries that have shale gas reserves. At first, the other countries grappled the American idea, but the attitude towards it cooled down very soon. The U.S. got lucky with shale gas because its deposits are not located in densely populated areas, while the entire preparatory work aimed at studying the resources was carried out as part of a search for natural gas deposits. Those who planned to repeat the U.S. success have met with a large number of difficulties, says president of the Energy and Finance Institute Vladimir Feigin.

“At present, China is not sure whether the exploration of shale gas is advantageous. Moreover, the basic reserves are located in the west, north-west and south-west. These are not the main gas consuming regions. Consequently, there is a need to build pipeline systems to transport gas to real markets,” Vladimir Feigin said.

Not all countries are ready to put their environment under threat for the sake of cloudy prospects. The development of shale gas fields is conducted by using a large amount of chemicals that penetrate into the soil. The technology of hydraulic explosion that is quite popular in the production of minerals is very dangerous in the production of shale gas. Ecologists in France and Belgium have forced their governments to ban the production of shale gas.

Only Poland out of all European countries was actively engaged in the exploration of shale gas. The American ExxonMobil and Canada’s Talisman Energy worked on the Polish territory. But when their experimental project turned into a promising one, the Polish government interfered in the distribution of profits by increasing taxes. At present, the two companies are ready to sell the license for shale gas development and leave Poland with its reserves. According to analysts, these reserves are not worth the price demanded by Europeans. Poland and the U.S. have the same motivation for work with new resources, consequently they might make concessions by trying to preserve the project, says head of Energy Policy Sector of the Institute of Economy Vladimir Voloshin.

“The U.S. has adopted an energy independence programme that concerns not only shale gas production but also the development of shale oil. Poland also has large shale gas deposits, and that is trying to use to become less dependent on imported energy resources,” Vladimir Voloshin said.

A hope for a breakthrough in shale gas production remains but it will be realized no earlier than 2015. By that time, China plans to produce no less than 6.5 billion cubic meters of shale gas a year. Although this was announced in March 2012, the agitation over the gas ambition has faded in the country. Due to a large number of difficulties, China has started slipping the schedule.

This post originally appeared on Voice of Russia