Will Europe Embrace Fracking?

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As my colleague Bryan Walsh wrote recently in a cover story, shale gas is fast on its way to becoming a total game changer in the U.S. energy market. But what about Europe?

On Tuesday, France’s legislature opened a debate on proposals to ban extraction of gas and oil deposits from shale. In February, Nicolas Sarkozy’s conservative government halted all exploration pending a report into the environmental effects of ‘fracking’—the pumping of water, sand and chemicals deep underground to free  pockets of oil and gas from the rock.

According to a story in the New York Times today, “even without the final study, which is expected in June, deputies in the National Assembly are expected to pass a ban on Wednesday. The legislation will then be sent to the Senate.” The paper quoted a radio interview with France’s environment minister Nathalie Kosciusko-Morizet, in which she said that  fracking “is not something we want to use in France. Shale gas is the same as any other gas. What poses a problem is the technology used.”

Environmental concerns around fracking tend to focus on the impact on the water table. It may seem strange that the French would say ‘non’ to fracking while simultaneously continuing as the world’s greatest proponent of nuclear power—despite the long-term mess that technology can cause when it goes wrong. But other parts of Europe—keen to wean itself off Russian gas, and facing dwindling off shore supplies in the North Sea—may be more willing to embrace “unconventional gas.”

A report by the US Energy Information Administration in April estimated the technically recoverable resource in Europe at 624 trillion cubic feet—much higher than previous estimates. (The U.S., by comparison, is estimated to have 862 tcf). Earlier this month, the Kings College London-based European Centre for Energy and Resource Security (Eucers) released a study which said that, by these estimates, “Europe’s unconventional gas resources might be able to cover European gas demand for at least another 60 years.” (The report can be downloaded by clicking here).
Poland has been one of the first to embrace fracking. Chevron plans to drill its first well in Poland later this year, while Exxon­Mobil has completed drilling its sixth shale gas well in north-west Germany since 2008, according to a recent report in the Financial Times. Austria’s OMV is testing geological formations near Vienna and Shell is looking into shale gas in Sweden, according to press reports.

But even the Eucers report warns that environment concerns over fracking must be addressed as population density tends to be much higher in Europe than the U.S., heightening concerns over the contamination of populated areas and raising the risk of vocal local opposition. There may be other obstacles to shale gas extraction in Europe, too:  the EU lacks an experienced drilling work force and equipment—including spare pipeline capacity and drilling rigs and service companies. This underdeveloped supply chain means the economics of shale gas in the European Union is still highly uncertain.

As a recent piece in the Economist wryly put it, however, even if shale gas does not live up to expectations in Europe, the continent is already benefiting from it: as America imports less gas than expected, that helps bolster supplies, reduce prices for Europeans, and reduce the continent’s dependence on Russian gas.