Apr 11

Shale Gas Arises in France and Bulgaria

By Curve natural gas in Europe No Comments »

 

The once solid bans on fracking technology to extract shale gas in Bulgaria and France are weakening. Both countries have established committees to examine the technology and practices throughout the EU. The Bulgarian parliament has established an ad-hoc committee to examine EU practices, while the French government will examine the technology and regulations.

The closer look at the technology is not an indication of weakening environmental protection, rather it acknowledges the role shale gas can play in each country’s energy mix.

Exclusion of fracking technology only weakens a country’s energy security. Gas deposits represent an effective source for domestic energy security. Just as gas storage and network interconnectors ballooned to a key security of supply concern after the 2009 Russian-Ukraine gas dispute, shale gas is emerging as another tool in the box of energy security.

In the EU, the contribution domestically tapped shale gas will be limited in each country, so there is no panacea of independence being held in the ground; however, it is not mana we are looking for in the ground – just a little bit for boosting energy security levels, which in a time of crisis can make a significant difference.

Domestically sourced shale gas, provides two elements for security of supply. It provides another source of gas, thus reducing foreign dependence and used as a bargaining chip to reduce pricing of Russian gas. It also boosts overall energy security. Therefore, ignoring the role that shale gas plays in a country’s energy supply is not in the interests of politicians. Gas pricing is an annual concern of politicians.

Also, if a crisis occurs, there will be calls as to why shale gas was not explored and possibly exploited in the past. Providing the right regulatory and business environment becomes an action of self-preservation for smart politicians. Objections of environmentalists can be addressed for the wider public. Politicians will be able to cite other extraction and regulatory practices in other countries to demonstrate the safety of using the technology in their own backyard.

Fracking technology is not in or out in Europe. Most commentators have adjusted and are getting it right. There will be shale gas in Europe, although at mixed levels in different EU countries. It will only be a game changer in so-far that it contributes to overall energy security – at the same level as other diversified energy sourcing. Through an effective regulatory regime shale gas emerges as a useful technology to meet Europe’s growing appetite for a lower carbon fuel. As the extraction technology becomes cleaner, more transparent, and proven, older objections will drop away, and shale gas will emerge as a solid technology.

Source: Natural Gas for Europe

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Apr 03

France Set to Revisit Fracturing, Shale Debate

By Curve natural gas in Europe No Comments »

 

The battle over the development of France’s unconventional hydrocarbon resources is set to reignite with the publication of a report in favour of research activities in hydraulic fracturing to investigate shale oil and gas resource potential.

A joint report of the Conseil Général de l’Industrie, de l’Énergie et des Technologies (CGIET – General Council of Industry, Energy and Technology) and the  Conseil général de l’Environnement et du Développement durable (CGEDD – General Council of the Environment and Sustainable Development), recommends the establishment of a national commission on shale exploration and exploitation techniques.

The commission will be broadly based, with representation from the legislative bodies (state representatives, territorial representatives, an MP and a Senator), representatives of industry, industry employee groups, NGO’s and scientific experts.

The commission’s duties will include collecting data in order to identify the potential resources and examining if they can be developed in a safe and environmentally friendly manner.

A key focus will be on determing the conditions for environmentally acceptable hydraulic fracturing operations, including establishing regulations for managing risks and protecting the environment during the experimentation of new techniques to operate on shale oil and gas.

The commission will initially focus on the oil shales of the Paris Basin. Test hydraulic fracturing could reportedly occur as early as Spring 2013.

The report immediately drew a reponse from organizations opposed to unconventional hydrocarbon development in France.  In a joint statement, Friends of the Earth, France Libertés, ATTAC, AITEC, RAC, Greenpeace, Helio, CSIR and WECF Network for Nuclear Phaseout, denounced the “hypocrisy of the government.”

The release of the report, eight months after France implemented a ban on the extraction of hydrocarbon resources by hydraulic fracturing, comes at a time when the energy mix and energy pricing is playing a heighted role in the French Presidential elections.

Speaking to RTL, the Socialist Candidate for President indicated a policy shift from the party’s previous unequivocal opposition to shale oil and shale gas development.

Francois Hollande commented: “You should never rule out anything, especially if research shows that one can obtain this gas without harming nature.”

Rising energy costs are increasingly impacting the purchasing power of the average French citizen, with estimates of upwards of three million French homes currently facing difficulties in being able to afford heat and electricity.

Source: Natural Gas for Europe

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Mar 20

French Chemicals Makers Seek Support on Shale Gas, Nuclear Power

By Curve Europe, shale gas No Comments »

French chemicals makers urged President Nicolas Sarkozy and contenders in the election to reconsider their objection to shale gas and preserve nuclear power as energy costs are key to the industry’s competitiveness.

“If we’re told no shale gas and less nuclear, and if we have to pay 50 percent more for energy, that’s a huge or even a life-threatening concern,” Olivier Homolle, who chairs the Union des Industries Chimiques, the French chemicals industry federation, said in a March 16 interview. “Nuclear energy is very useful. It’s one of the rare areas where we have an advantage over Germany, so let’s try to preserve it.”

French chemical production will probably increase 1.8 percent this year as Europe’s economic growth slows after climbing 5.9 percent in volume last year to 86.7 billion euros ($114 billion), according to the group. French production lagged behind China, the U.S., Japan and Germany last year. It’s now on par with Brazil and South Korea, Homolle said.

Socialist candidate Francois Hollande, who’s leading in opinion polls to replace Sarkozy as president, wants to cut the use of nuclear power in electricity production to 50 percent by 2025, down from about three-quarters now. Sarkozy, meantime, aims to extend the lifespan of nuclear plants.

Hollande also has said he plans to maintain a ban introduced by Sarkozy on shale gas exploitation through rock- fracturing techniques that use water and chemicals, saying the method harms the environment.

‘Ball and Chain’
“In a global competition, we can’t be burdened with a bigger and bigger ball and chain,” said Homolle, who also oversees BASF SE’s operations in France. Chemical companies based in France also need stability and a level-playing field with other European countries in terms of tax, technical and environmental rules, he said.

“The cost of gas in Europe is three times the cost of gas in the U.S. because of shale gas,” Thierry Le Henaff, chief executive officer of Arkema SA (AKE), a French maker of industrial chemicals, said on March 8. “Not only is Europe not competitive against the Middle East, it’s now isn’t competitive against the U.S.” and may soon lose ground against Asia in terms of gas prices, he said.

The French economy is also burdened by higher labor costs and the chemicals industry needs better pipelines and harbor infrastructure to compete with neighbors, Le Henaff said.

Arkema put on hold a 70 million-euro investment to expand production of polyvinylidene fluoride, used to make protective coatings, in France as long as unions refuse some productivity gains, according to Le Henaff.

“It would be less expensive and more profitable” to make the investment in the U.S. or China than in France, where Arkema makes 60 percent of its production and just 13 percent of sales, he said. “The ball is in the unions’ camp.”

Source: Bloomberg Businessweek

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Feb 16

France: Shale Gas Debate to be Renewed?

By Curve natural gas in Europe No Comments »

 

In an interview with Bulgaria’s TV7, Traicho Traikov, the nation’s Minister of Economy, Energy and Tourism, shared his discussion with France’s Energy and Industry Minister Eric Besson.

Bulgaria and France have both taken steps to halt the exoploration and production on unconventional hydrocarbons (shale gas and shale oil), using the process of hydraulic fracturing.

Traikov said that he had held talks with Minister Besson, who had implied that the shale gas debate would soon be renewed in France.

The Bulgarian minister also alluded that “the defenders of the status quo” has been active in the shale gas debate in Bulgaria, which he expected would also be renewed.

“This is a precious resource for achieving Bulgaria’s energy independence and if we can use it safely, I do not see why not,” commented Traikov.

Source: Natural Gas for Europe

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Feb 03

France Urged to Pursue Oil-Fracking Research to Reduce Imports

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France, which last year banned oil and natural-gas extraction from shale rock, should keep experimenting with the technology if it wants to curb reliance on imports, the nation’s oil industry lobby said.

The country should use “all means” to cut purchases of energy supplies from abroad, the Paris-based Union Francaise des Industries Petrolieres said today in a statement. UFIP also urged France to revise its mining code so that the public and local government are more “closely associated” with projects.

Total SA , based in Paris, and international peers have been hurt by France’s ban on hydraulic fracturing, or fracking, which the government says may harm the environment. The process, which has made the U.S. the world’s largest gas producer, involves pumping water and chemicals into rock to release hydrocarbons.

The ban, the first of the technology by any country, has suspended shale exploration at permits around Paris and in southern France. Oil companies including Total, the nation’s largest, and Toreador Resources Corp. held licenses for shale exploration.

The decision to outlaw fracking curtailed operations for energy companies already contending with dwindling refining margins. French oil-product demand fell 1.3 percent last year to 77.8 million metric tons, contributing to refiner losses of about 800 million euros ($1.04 billion), UFIP said.

Lower profits from processing crude have forced refiners to cut costs and shut plants across Europe. In the past two years, LyondellBasell Industries NV, Petroplus Holdings AG and Total have decided to stop refining at sites in Berre, Petit-Couronne, Reichstett and Dunkirk, leaving France with eight working plants, compared with 24 in 1977.

Refining margins slumped to an average of 14 euros a ton in 2011 from 21 euros a year earlier, according to UFIP. French refiners lost 1 billion euros in 2009 when margins averaged 15 euros, and “hundreds of millions of euros” more in 2010, the group said previously, estimating that margins of about 25 euros are needed for profitable operations.

The French oil companies also called today for “minimum service” laws for ports to avoid strike disruptions. The crippling of operations at crude-import hubs in 2010, combined with strikes at refineries, led to shortages at the pumps.

Source: Bloomberg

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Jan 20

Total Appeals French Shale Ban

By Curve shale gas in Europe No Comments »

 

Oil giant Total has lodged an appeal against the withdrawal of its permit to drill exploratory wells for shale gas in the south of France.

The government withdrew drilling permissions in October after widescale summer protests about the environmental impact of the only known technique for exploiting shale gas, hydraulic fracturing.

Total Gas Shale Europe managing director Bruno Courme said at a press conference in Paris that Total “respects the law” however, he added, “our position is that the law does not justify the withdrawal of our permits”.

He was speaking after a meeting of oil company heads and Ecology Minister Nathalie Kosciusko-Morizet on shale gas entitled “The French ban: how to get out?”.

UMP MP François-Michel Gonnot sparked fears among environmentalists that the government was preparing to overturn the ban as he said: “I do not see why the debate cannot continue just because we voted a law based on circumstance. It’s not a taboo subject.”

Hundreds of thousands of people had campaigned against shale gas exploration and the use of hydraulic fracturing last summer and the government introduced an outright ban despite permits already having been issued. Oil firms were told to submit new applications that did not propose the use of now-banned technique.

Total’s application to drill the Montélimar prospect (which covers 4,327sq.km from Montélimar to Montpellier) said specifically that it would not use hydraulic fracturing but the government criticised it for not being “sufficiently explicit” in explaining alternative techniques.

Hydraulic fracturing is a technique where shale gas tightly bonded in deep rock structures is freed using underground explosions to fracture the rock.

Known as “fracking”, the technique has been criticised as millions of litres of chemical-laden water is used to force the gas up to the surface and there are fears this will contaminate aquifers and other underground water sources.

Environmental protesters also fear the impact of widescale drilling rigs and access roads being set up across the Ardèche, Drôme and Gard departments.

Shale gas has not yet been confirmed in the French sites but protesters say that if Total’s exploratory wells do strike gaz de schiste there will be immense pressure on the government to authorise “fracking” no matter the feared consequences.

Source: The Connextion

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Nov 28

Total Will Appeal French Ban on Shale Exploration

By Curve France No Comments »

 

Total is to appeal against the French government’s decision earlier this year to cancel its permit for the exploration of shale gas, company CEO Christophe de Margerie said at the weekend.

The government said in October it had decided to annul the three shale gas exploration permits it allocated in 2010 following a law enforced in July banning the use of hydraulic fracturing, or fracking, for shale gas and oil on French territory.

Total held a permit to explore a 4,327 sq km site around Montelimar, southern France. The two other shale gas permits were held by US company Scheupbach Energy.

The ban on fracking was a response to rising public and political opposition to shale drilling. It stipulated the permit holders had two months to declare which method of drilling they would use and their permits would be repealed if they indicated the fracking technique.

In October, Total CEO Christophe de Margerie said the company had declared to the government it would not use the fracking technique and at a forum in Lyon on Saturday, he said the company would appeal against the government’s decision.

Total was told by the government its plan was not believable and the company wanted further explanation, a company spokesman confirmed Monday.

According to French law, the French company has until December 12 to appeal and the company is considering two options.

One is to formally ask the energy and ecology ministries for a detailed explanation on why the permit was canceled.

The second option is to file a formal appeal to a French administrative Court.

Total had not planned to begin exploration drilling on the site until 2012 at the earliest.

Source: Platts.com

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Oct 11

France Rejects Total Repeal of Unconventional Oil and Gas Licenses

By Curve natural gas in Europe No Comments »

 

France’s National Assembly today rejected proposed legislation to prohibit the development of shale gas and shale oil in the country.

The majority UMP New Centre party voted against the proposal, viewing it as surpurfluous after the earlier adoption in July of a bill that prohibited the technique of hydraulic fracturing in the exploration and exploitation of unconventional hydrocarbons.

The bill put forward by the Socialist Party, the Greens, the Communist Party and the Left Party sought to ban the licenses already issued for unconventional oil and gas exploration and to ensure more tranparency in the Mining Code.

Emboldened by the repeal of three licenses granted for shale gas exploration granted to Schuepbach Energy and Total SA in the south of France, oppondents of unconventional hydrocarbon development put forth legislation last Thursday, taking aim at the remaining 61 exploration permits issued throughout the country.

Source: Natural Gas for Europe

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Sep 14

Total Says French Shale Gas Dream Not Over Yet

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Total says it wants to prospect for shale gas in France’s southeast region but stressed it would not use the banned hydraulic fracturing drilling technique.

The French oil major wants to develop production of natural gas from shale rock formations as part of a strategy to boost unconventional oil and gas production to offset dwindling reserves.

It said it wishes to exploit an area for which it won the exploration license for 5 years in 2010. In May, it said it had turned to Poland to assess the potential for shale gas jointly with U.S. major Exxon Mobil Corp.

France, which in the 1970s produced one-third of its gas consumption, imported 98 percent of the gas it consumed in 2009.

Total also has two exploration permits for shale gas in Denmark and six in Argentina.

Source: Reuters

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Aug 10

Au Revoir? – Toreador Takes A New Direction

By Curve natural gas in Europe No Comments »

 

Stymied by French legislation banning hydraulic fracturing in unconventional hydrocarbon resource extraction, Paris based Toreador Resources Corp. is setting off in a new direction.

Toreador has announced that it has entered into an agreement to merge with a ZaZa Energy LLC, privately held oil and gas company based in Houston, Texas.

The merged portfolio comprises Toreador’s Paris Basin play in France together with ZaZa’s holdings in the Eagle Ford core and the emerging Eagle Ford/Woodbine (Eaglebine) resource plays in Texas with a current total of 423,000 net acres. Both the Eagle Ford and Paris Basin businesses have strategic partnerships with subsidiaries of Hess Corporation.

Some may view the deal as being driven by the difficult situation that Toreador finds itself as a result of French government position on fracking, particularly after the company had undergone an extensive corporate reorganization to focus solely on France’s Paris Basin shale play.

Toreador said that a one-rig oil exploration drilling program targeting traditional reservoirs is expected to commence by late 2011 in the Paris Basin. The Liassic drilling program comprising six wells (without the use of hydraulic fracturing) is expected to commence by year-end pending final review of permits by the French Administration.

However, the future focus of the combined entity is likely telegraphed by the fact that ZaZa equity holders will hold 75 percent of the new company, ZaZa Energy Corporation.

The transaction is subject to Toreador stockholder approval, regulatory approvals and other customary closing conditions. The transaction is expected to close in the fourth quarter of 2011.

 

Source: Natural Gas for Europe

 

 

 

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