May 14

 

The fledgling shale natural gas business in Poland is in danger of becoming too politicized, a former Polish geologist said.

Warsaw estimates it has as much as 3.3 trillion cubic feet of natural gas, lower than the 187 trillion cubic feet estimated by the U.S. Energy Information Administration.

Officials, however, said shale gas analysis carried out in conjunction with the U.S. Geological Survey confirmed the country remains in position to become a major energy producer and that more drilling will likely reveal greater reserves.

Polish politicians are divided over what role foreign entities should play in the country’s shale natural gas sector.

“Politicians don’t want to do the wrong thing but they lack experience and this makes it difficult for them to be a partner with a strong industry,” Pawel Poprawa, a shale gas expert formerly with the Polish Geological Institute, told the Platts news service.

State-controlled natural gas company PGNiG holds most of the shale concessions in the country among rival energy players.

One official who spoke with Platts on condition of anonymity said there was an emerging climate of xenophobia in Warsaw. Polish Deputy Environment Minister Piotr Wozniak, however, denied the allegations.

“If we really want to develop these resources we need foreign investors,” he said.

Source: United Press International

Tagged with:
May 03

The Financial Times published a special report on the potential of shale gas to undermine the concept of ‘peak oil’, reshape domestic economies as “one of the linchpins of global energy supply in the 21st century” and recast geopolitics, influencing companies’ investment decisions.

With quantifiable shale reserves now having been identified in Argentina, Australia, South Africa, northern Africa and eastern Europe, as well as in the UK and France, the US Energy Information Administration now estimates these could raise recoverable global gas resources by more than 40 per cent. The author stresses the economic and environmental potential of shale gas as it could improve energy security vis-à-vis Russia, and improve global carbon emissions should China decide to switch from coal. He concludes that the “promise of energy independence, job creation and cheaper power will spur many governments to push ahead.

Source: EuropeUnconventionalGas.Org

Tagged with:
Jul 12

Warsaw, Poland - The rush for shale gas in Poland is attracting some of the world’s biggest energy companies, giving the country hopes of energy security and strengthening ties with the United States.

Recent finds in northern Poland appear to confirm what experts have suspected for years – that Poland has Europe’s largest reserves of shale gas.  The news promises to encourage what has become a feeding frenzy of major gas companies and Polish hopes of energy independence from Russia.

Shale gas is natural gas trapped in shale rock.  In April, a report by the U.S. Energy Information Administration said Poland could have the largest and most accessible shale gas reserves on the continent.  But up to now, no one could be sure Poland had any gas at all.

Recently-drilled wells indicate the gas is there, says Pawel Poprawa of the Polish Geological Institute.  But, he adds, it is still impossible to tell whether or not it will ever be extracted.

“A couple of these wells altogether seem to confirm the concept,” he said.  “Yes, we think there is gas in the formation.  However, we need to figure out if we are able to get it to the surface, and if we do, then it is a question of if it will be commercial.”

Poprawa says it will be several years before anyone knows exactly how much gas Poland has, and at least a decade before large-scale production can begin.  But in the mean time, exploration concessions have been granted to some of the biggest energy companies in the world.

“We have on our market real majors, the biggest companies globally,” he said.  “We have here Exxon, Chevron, ConocoPhillips, Total – this is kind of unique, really.  This place a couple of years ago was empty.  Now everybody from the world comes here to make their exploration.”

Many of these companies are American, which has sparked the interest of U.S. policy makers.  On his recent visit to Warsaw, U.S. President Barack Obama said the United States is eager to cooperate with Poland in producing shale gas.

“Shale gas is an important opportunity,” the president said.  “We believe that there is the capacity technologically to extract that gas in a way that is entirely safe, and what we want to do is to be able to share our expertise and technology with Poland in a fully transparent and accountable way.”

Agata Hinc, of the Warsaw-based research organization Demos Europa, explains that collaborating on shale gas could also lead to closer political ties between the United States and Poland.

“For American companies it means money,” she said. “But it also means stable international cooperation on important issues that will last longer than two months.”

But when it comes to energy, Poland’s main geopolitical concern lies to the east.  The country has long been dependent on gas from Russia, and Hinc says that for many Poles, independence from their former communist rulers is a major concern.

“Energy security has meant for a very long time, and for some still means, independence from Russian gas here in Poland,” she said.  “This is a very big political issue.  I would not say the younger generation thinks about it that much, but certainly the older generations and our policy makers want to ensure that we are totally independent from our big neighbor”

Shale gas has become controversial in recent years.  Environmentalists claim that during the process of hydraulic extraction – known as “fracking” – gas and other contaminants from the process can seep into the ground water, damaging the environment and posing a health risk.  In the United States, New York State has imposed a moratorium on fracking, and France has forbidden any new exploration.

Spokesman Jacek Winiarski of the Warsaw branch of Greenpeace says companies in Poland need to take the environmental impact into account.

“We know what are the American experiences with drilling and extracting shale gas,” he said.  “It causes water pollution, animal diseases, and other environmental pollution.  We perceive gas as a temporary transition fuel between coal and renewables, so we are not against gas, but gas extracted in a safe way.”

But Hinc explains Poland’s priorities tend to be different from those in the West, and that for now, environmental concerns are likely to take a back seat when faced with the prospect of energy independence.

“In the richest countries in Europe, green groups are very strong because people want to live in a clean environment, which is not the case in Poland, at least not yet,” she said.  “As for now, cheap electricity and energy security are the most important issues.”

Fracking may begin later this summer, and for now, the size of Poland’s shale gas reserves can only be guessed at.  But with 120 new wells planned for the coming years, it appears the eyes of the world will be on Poland for a long time.

 

Source: Voice of America

Tagged with:
Feb 05

Tagged with:
Jan 29

The exponential potential for shale gas exploration overseas and the shale boom in the United States is forcing one of Europe’s gas giants to re-evaluate what was once considered to be a largely ambitious gas extraction project in the Arctic.

Gazprom, Russia’s biggest gas company and Europe’s biggest gas supplier, said this week they would have to reassess its plan to develop the 3.8 trillion cubic meter Shtokman gas field in the Barents Sea.  Together with partners Statoil and Total, Gazprom has planned to send as much as 90 per cent of Shtokman’s extracted natural gas to the North America, but the company admits that alternative gas suppliers and quickly developing markets for shale gas in the US and abroad is putting Shtokman development plans in jeopardy.

Andrew Neff, an energy analyst at HIS Global Insight says shale gas is “playing havoc” with Gazprom’s prices and projects.

“The potential spread of the shale gas production revolution to Europe, which is believed to have significant untapped reserves of its own, would clearly have a profound impact on Gazprom’s production and marketing strategy,” he told The Guardian.

In an interview with Russia Today television in December, a Gazprom spokesman called shale gas “a joke” and dismissed concerns that a growth in the production of shale gas would pose a threat to the company’s foreign sales.

But the reassessment of the Shtokman fields demonstrates that Gazprom is now taking the threat of shale gas and energy independence very seriously.

Over the past two years, gas exports and revenues fell dramatically for Gazprom. While high monopolistic prices and European dependency on the Moscow-based company certainly played a role in causing country’s to look elsewhere for gas, the role of shale and the desire for energy independence by some countries in Europe such as Poland has undoubtedly been affecting Gazprom.

Oddgeir Danielson, an oil and gas expert in the Norwegian Barents Secretariat, said the repeated postponement of the Shtokman project illustrates current uncertainties in that market and highlights Gazprom’s conflict with shale.

Directors at Shtokman Development will meet again on February 5, 2010 to agree on a new marketing plan for the offshore field. There is a possibility the directors may also delay a final investment decision on the venture.

SOURCES:
Alaska Dispatch: “Gazprom eating crow on shale gas?”
Barents Observer: “Gazprom might abandon Shtokman”
The Guardian: “BP chief hails American breakthrough in gas supplies from shale rocks”
The Moscow Times: “Shtokman Meeting to Consider Gas Buyers”
Business Insider: “Gazprom: Shale is a joke, and it can’t possibly compete with gas”

Tagged with:
Jan 06
An energy price dispute between Russia and Belarus escalated early this week

The dispute focuses on the Soviet-era Druzhba  pipeline system that supplies 10% of the European Union’s oil.  Poland depends on the Druzhba pipeline for most of its crude oil. Germany received about 15% of its crude through the pipeline in 2008.

Russia began curbing supplies through the pipeline to Belarus’s domestic market after an oil-supply agreement between the two countries expired Dec. 31. On Monday, Russian officials said those deliveries had been resumed, but not before Belarus threatened to cut off electricity to Russia’s westernmost region if the Russians insisted on imposing a new tax on the oil Belarus processes for export.

Three years ago, Russia briefly cut oil exports to the European Union nations through a Belarussian pipeline as the two former Soviet republics quarreled over price. That shutdown, along with a January 2009 natural-gas cutoff to Europe caused by contract disputes with Ukraine, has raised doubts in Europe about Russia’s dependability as a top energy supplier.

Tagged with:
Jan 05
Troubled times in the energy sector continue with Russia and its European neighbours, even those who are closest to the Russian sphere of influence.  
Russia and Belarus have failed to renew an agreement on crude oil export tariffs that expired on New Year’s Eve, raising the prospect that yet another otherwise unremarkable energy pricing dispute between Russia and a neighbor could unravel into a midwinter fuel shut-off on the Continent. Just a year ago, Europeans shivered through a politically tinged dispute that went on for weeks between Russia and Ukraine over  natural gas prices and transit fees. As is the case with natural gas pipelines in Ukraine, about 1.3 million barrels of oil per day shipped along the Belarussian spur of the Druzhba pipeline supply both the internal market in Belarus and the more lucrative markets in the European Union like Germany and Poland.

On Sunday, Reuters cited two oil traders as saying that Russia had begun curbing supplies to the domestic market by cutting the flows to two refineries, Naftan and Mozyr. In Ukraine last January, that was a first step toward a more general shutdown.  Russian officials took pains to emphasize that the export volumes would continue to flow, while either refusing to confirm or denying the report of a local shut-off in Belarus.

Belarus is one-half of a loose confederation with Russia that was supposed to eventually lead to a common currency and customs zone. Yet in the oil business, so vital to Russia’s economy, Belarus was treated with privilege but as less than a fully integrated partner. The government in Belarus posted a statement saying that they had been subjected to “unprecedented pressure” to acquiesce to Russia’s demands. Both sides, however, said Sunday that negotiations were continuing.

Last January, the Russian natural gas monopoly Gazprom first tried to halt supplies to Ukraine’s domestic market in a pricing dispute. It then shut down the pipeline entirely, accusing the Ukrainians of continuing to supply their own needs by siphoning gas intended for export.

Source: New York Times   

Tagged with:
preload preload preload