Oct 18

 

Europe must do more to develop shale gas–the fast-growing technique of cracking open shale rock to release natural gas–and better integrate its pipeline network in order to improve energy security, the chief executive of Italian energy company Eni SpA (E) said Tuesday.

Gas infrastructure is increasingly important because Europe will one day consume more gas than oil as it offers a cleaner alternative, Paolo Scaroni said on the sidelines of the International Energy Agency ministerial meeting here.

“We should be doing the most on shale gas in our continent, because domestic conventional gas is decreasing rapidly in traditional gas producing countries,” Scaroni said.

“Gas consumption will be in excess of oil consumption in Europe simply because the best way to meet CO2 targets is to replace coal with gas,” he said. “If some countries really want to get out of nuclear, I don’t see any other way to provide electricity,” than natural gas.

Greater reliance on gas means Europe needs to improve cross-border pipeline connections, he said.

“Creating a network of pipes which connect the different countries of Europe is essential to give security of supply,” he said, adding that this could require the creation of a single European pipeline authority.

Source: Wall Street Journal

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Oct 05

 

The vice president of the European Conservatives and Reformers in the European Parliament, Derk Jan Eppink, posted the following article on the EU Observer website, highlighting where the EU stands – or should stand – on shale gas decisions:

This week, the European Parliament will devote a committee meeting to the issue of shale gas development. It places shale gas, practically unheard of as an energy source five years ago, squarely in the spotlight.

No one denies that current fossil fuel reserves are finite. What has been denied, however, is that shale gas can play an important role in filling the coming gap between our energy needs and our resources.

Proponents of renewable energy see a future in which Europe’s grid is run exclusively on renewable sources like solar power, wind and water. Unfortunately, these renewable energy sources are not even nearly able to meet our current energy demands. For example, Germany’s 22,000 wind turbines produce just 27.2 gigawatts, or six percent of the country’s energy supply.

Similarly, even after extensive investment, solar power would still only meet 10 percent of the country’s energy needs by 2020. Short of cutting its energy consumption by at least 50 percent, there’s no way Europe’s largest member state could hope to meet its energy needs exclusively through renewable sources any time in the next half century.

It is clear then, that Europe needs an energy policy that isn’t limited to investment in renewables. Other sources must also be included. One of these sources must be nuclear energy. After all, nuclear power outclasses all of the other possible resources in terms of the amount of energy it can produce. Unfortunately, practical obstacles put limits on member states’ ability to expand rapidly the number of nuclear power plants on their territory. Other energy sources will therefore be required – sources like shale gas, of which Europe has significant reserves.

Enough gas for 60 years

A recent report by the European Centre for Energy and Resource Security (Eucers) calculated that European shale gas resources are enough to cover another 60 years of European gas demand. In other words, when the European Parliament votes in favor of shale gas, it votes for a century of energy security.

Proponents of green solutions sometimes claim shale gas is dangerous. Phenomena varying from earthquakes and gas escaping from kitchen taps to water pollution are all attributed to shale gas drilling. If it is difficult to take such examples of Luddite superstition seriously, the same cannot be said for a potentially more fundamental objection to shale gas development, namely that the extraction process is causing acceleration in the build-up of greenhouse gases.

Until recently researchers claimed that during the process of hydraulically fracturing the earth layers in which the gas is trapped, quantities of methane previously held in the earth’s crust were likely to escape into the atmosphere. As a consequence, it was thought, shale gas accelerated global warming. Fortunately, this hypothesis turns out to be unfounded. A recent study from Carnegie Mellon University in the United States revealed that extraction of Marcellus shale gas did not result in the emission of more greenhouse gases than conventional gas. The researchers even stated that ‘on average, the emissions of Marcellus shale gas were about three percent lower than liquified natural gas.’

Independence from Russian gas

The current EU presidency, Poland, have taken a lead in the discussion about Europe’s future energy provision, expressing a strong belief in shale gas. For Poland, and indeed much of eastern Europe, shale gas development would mean not just economic growth and environmental progress (clean shale gas replacing dirty coal as the main energy source) but also independence from Russian conventional gas supplies.

In its advocacy of shale gas, the Poles are supported by the UK, which has acted as a counterweight against French attempts to impose a blanket ban on shale gas development. It is now up to the parliament and indeed the European Commission to reconcile these positions by developing an energy strategy that allows for the full development of European shale gas resources, while still taking environmental concerns seriously.

To do so would also show a sense of political maturity that until now has sometimes eluded the European institutions. By taking a firm stance on the issue of shale gas development, it could show that it is no longer prepared to be subject to the political whims of other global players.

In times when the demand for fossil fuels continues to grow, but the conventional resources are showing signs of exhaustion and alternative energy sources prove to be insufficient, shale gas surely must be part of any credible energy mix. Shale gas development will boost economic growth and enable the EU to regain global political clout, while also helping it to reach UN climate goals. It is, in short, a win-win solution.

Source: EUObserver.com

 

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Aug 12

 

Poland’s state gas company PGNiG has announced that it will begin its test drilling for shale gas in northern Poland this month.

PGNiG president Michał Szubski,told the Rzeczpospolita daily he was “cautiously optimistic” that the wells in Pomorania could be producing gas on an industrial scale by the middle of 2012.

Finding an independent source of gas could help wean Poland of its reliance on Russian energy sources.

Professor Stanislaw Nagy, a geologist from the University of Science and Technology in Warsaw told the newspaper, however, that there is still no certainty that shale gas production will be profitable.

“Everything will depend on how much gas will flow during the tests,” he says.

The prospect of tapping into Europe’s largest deposit of shale gas has had the world’s biggest multinationals queuing up to set up test drilling sites in Poland.

The US Energy Information Administration released a report in April concluding that Poland could have the largest and most accessible shale gas reserves on the continent.

On his visit to Warsaw this year, US President Barack Obama said the United States is eager to cooperate with Poland in producing shale gas.

 

Source: The News.PL

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Aug 12

 

Shale gas and unconventional gas have a huge future potential when compared with conventional gas supplies. But their lack of social acceptance, and the technological adjustments and regulatory framework required to develop them remain a challenge in Europe, Pawel Konzal, associate director for Energy Industries of the World Economic Forum (WEF), told EurActiv Czech Republic in an exclusive interview.

He was speaking to Jan Vitásek, Publisher of EurActiv Czech Republic.

Let us start with energy policy after Fukushima. Germany took a U-turn and announced that it will phase out its nuclear power. What do you expect to be Fukushima’s impact on the energy mix?

There was a period of uncertainty after Fukushima, but one thing that clearly emerges is that countries which wanted to pursue nuclear expansion will still do so, especially countries such as China, India or Russia, where the majority of nuclear capacity was planned or in construction. The same applies to some of the OECD countries like the UK, France or Poland. These programmes will continue, notwithstanding that they will probably review safety standards.

In relation to Germany and other countries which decided to shut down the nuclear power plants, of course there will be an impact on the energy mix. You can name four energy sources which will potentially fill the gap: coal, renewable energy, natural gas and the energy efficiency. But not all four of these are present in all the countries.

There is lots of talk about the expansion of coal, especially in relation to Poland which has many coal power plants. Do you think there could be any potential in this direction?

It is possible. And we should also mention other parts of the world, because in countries such as Malaysia or Indonesia new nuclear plants were also being considered, and now you can see that coal will be probably filling a much larger part of their future demand. Of course the picture is not exactly the same in Europe because of carbon pricing and so on, but coal will definitely fill part of the gap in Europe too.

You already mentioned that apart from Germany the nuclear phase-out has also been discussed in Switzerland which decided to stop all of its plants, and the same happened in Italy. Do you think that something similar will also happen in Poland?

I think that the nuclear program in Poland will still go ahead. There is always a possibility that a review of security standards will take place – which may always have impact on the tendering process – but I do not think that the programme itself will be cancelled.

But this will also depend on what people think because the President Bronisław Komorowskisaid that there could be referendum on this.

As in all OECD- or EU member countries, public opinion is the most decisive factor. Iwould have to examine the last polls of public support, but I think they still show support for the nuclear programme. I can also answer this question from other side of the coin. You have an energy triangle, which consists of security of supplies, competitiveness and environmental sustainability. These three policy objectives impact decisions in any given region. Of course you cannot try to focus to the maximum extent on all of these issues simultaneously. You can emphasise one – keeping the two others at some basic level which is acceptable to you. And I think that in countries such as Poland, which are fast growing economies with growing energy demands, the public will be favourable to nuclear energy.

In recent years or months there have been massive changes in the gas industry. How did the huge development of US shale gas extraction impact on natural gas transport routes?

These changes saw their origin with the development at the very beginning of the 1980s of horizontal drilling and hydraulic fracturing technologies. These two technologies have been improved and then deployed on a large scale in the last decades in the US, which has led to a huge surge in the supply of natural gas in the US.

A decade ago the United States was expected to become a vast gas importer through LNG and this is why a lot of important infrastructure was built in the last decades. Now, with the not only plentiful, but also cheap, gas shale gas present in the whole of North America, the picture changed first of all in the North American markets, but then other markets were affected too, because the LNG supplies originally destined for the US had to find a new home.

How could the unconventional gas markets develop in the future?

The important questions are: will North America become a major gas exporter, and for how much longer will this situation of vast supplies of cheap gas last? The answer is that even with the low price of gas, companies will keep producing the gas to keep their licenses and leases of land. You may also know that the American Congress recently granted the first permission convert an LNG importing terminals into an LNG exporting terminal. That means that the US will be able to ship part of its gas to other regions of the world. Another question is whether the unconventional natural gas revolution will spread to Europe and Asia. Either way, Europe will – or is already – benefiting from the unconventional gas in North America and I think even if unconventional gas were to develop in Asia, Europe would benefit anyway, because of the larger than expected free LNG supplies.

Is there any potential of developing unconventional gas in Europe itself?

There are many challenges and many adjustments that will need to be done if unconventional gas is to be developed in Europe. In North America there is a long history of onshore drilling, which is not the case in Europe. The issue is whether people are used to onshore drilling. If you have seen it for a hundred years, there is nothing surprising in having such things introduced to your landscape. Of course, there is a tradition of coal production onshore, but that is a different thing. On the other hand the unconventional gas production has undergone a dramatic change in technology in the last decades. The US is much less invaded than it used to be in the terms of its landscape.

Does the technological shift result in a longer usability of natural gas reserves? Can gas be a secure supply of energy?

Definitely. In the US, thanks to the supplies of the unconventional gas, projected supplies have almost doubled. Looking at the Energy Information Administration’s study estimating the potential of different countries’ shale gas, its main conclusion is: yes, there is a huge potential which is substantial also in comparison to the conventional gas supplies. But as already mentioned, the need for social acceptance, technological adjustments and regulatory framework around it. The second thing is that in the US the owners of the land are also owners of the resources. In Europe, the owner of the resources is the state. That is also changing the business model because in the U S the land owners do have the direct incentive in having the resources underground developed, because they receive rent. In Europe it is a question, whether the owners are incentivized enough.

Maybe in Europe it is not so easy to extract gas this way, but what about Russia or Arab and Middle East countries? Could there be the potential?

Of course, but Russia has also a big potential in conventional gas, so this is a different thing. Outside of the EU Ukraine is a country with a great potential. But the biggest country we should mention is China. The development of the unconventional gas in China would be a game changer. Speaking about the Middle East, I think that, putting aside different geology, water scarcity would be biggest challenge there, as shale gas production you use substantial amount of water.

If we shale gas extraction becomes a reality in Europe, what changes should be made to current distribution network?

For shale gas, the distribution network is a crucial thing. Unconventional gas is dispersed in production and so you need to bring it to the places with demand for it. And in North America, you have a vast and very well developed distribution network.

But if there is unconventional gas development on a big scale in Europe, either you would have to have a development of the gas distribution network, such as in the US, or the gas would be consumed locally in the place where it is produced. For example, it would be consumed in Poland to generate electricity and part of it could be exported.

In other words, either you transmit the gas as a molecule, and you have to build the gas distribution network, or you can transmit is as an electron and then you need electricity network.

Could there be any fall-out for the various pipeline projects that are being built or projected in Europe, like Nabucco, South Stream, and others?

In the World Economic Forum (WEF), we do not look so much about what particular projects will be changed, because at the end of the day it is the role of the companies. We are more interested in what are the macro trends, because they can change the energy architecture and landscape.

Anyway, there is a recent report on the natural gas market by the WEF. Half of that report is a research done by Cambridge and research associates, and half of the report are perspectives of CEOs of different companies, including GdF (Gaz de France), Total or Talisman Energy. These are very interesting perspectives and I can gladly recommend this reading material.

 

Source: euractiv.com

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Aug 10

 

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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Aug 05

 

PRAGUE – The Czech Republic, where potential shale natural gas reserves have never been seriously searched for, has drawn new inquiries from energy companies, Prague says.

The Czech Ministry of Environment says two companies seeking new sources of shale gas have filed formal applications for exploratory operations in the country and others are waiting in the wings, local reports indicate.

Ministry officials say the companies are Basgas Energia Czech, a subsidiary of the Australian exploration company Basgas; and Britain’s Cuadrilla Resources, the online financial journal CzechPosition.com reported.

Also considering a shale exploration application through existing permits is the domestic Czech company Moravske Naftove doly, the Prague daily Economic News said.

While no systematic accounting of shale gas reserves has been done in the Czech Republic, the companies are eager to find out if it shares characteristics with Poland, which is believed to hold Europe’s largest shale gas reserves (up to 175 trillion cubic feet) has become the scene of a energy company feeding frenzy.

While it’s not likely the Czech Republic will be found to hold as much shale gas as Poland, investors are nevertheless checking out the lay of the land.

Cuadrilla Resources has filed to explore in a 365-sqaure-mile area of Moravia and company officials told CzechPosition.com they expect to receive a verdict on their application by fall.

Basgas is looking to explore a 37-square-mile area around Beroun in the central Czech Republic and a 300-square-mile region in the northeastern part of the country near Trutnov.

Environmental controversies have been generated in the United States, Britain and elsewhere over hydraulic fracturing methods use to extract shale gas — something Prague hasn’t had to deal with. Opponents say the process, sometimes called fracking, endangers groundwater.

The Czech government has said addressing such environmental concerns will come in time. The research to be carried out under the permits is likely to take at least five years, it said.

In the Czech Republic until now there has been no consideration of extracting natural gas from shale stone and reserves of this type haven’t been found (or systematically searched for) or technically and economically evaluated,” the Environment Ministry told CzechPosition.com.

If shale gas deposits are found in the Czech Republic, it’s unlikely the country will do what France did this year and ban fracking. Czech Prime Minister Petr Necas recently aligned his country’s energy policies with those of Poland, calling for more energy security for Europe.

Necas and Polish Prime Minister Donald Tusk last month in Prague said they want their countries to provide a “counterbalance” to other nations, such as Germany, which has moved to phase out nuclear energy, and France, with its shale gas exploration ban.

Tusk, whose country holds the rotating EU presidency, said Poland and Czech Republic should form a “common sense front” on energy — one that contends it’s unrealistic for Europe to rely solely on renewables as it struggles to reduce energy dependence on Russia.

“We fully support the Polish EU presidency and its priorities,” Necas said. “These are priorities the Czech Republic also shares.”

Source: United Press International

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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

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Jun 10

 

Prague – Peter Clutterbuck, Chief Executive of 3Legs Resources Plc, says that the shale-gas explorer will be able to show that its wells in Poland are commercially viable in 1.5 to 2 years.

3Legs’s six shale-gas exploration licenses in the Baltic basin in northern Poland cover as much as 4.8 trillion cubic meters of gas, Clutterbuck told  Bloomberg. The company has three more licenses for smaller reserves in the south of Poland near the city of Krakow, he said.

3Legs is in the midst of an initial public offering on London’s AIM market.

“What we’re doing now is using the funds raised from the IPO to further explore this region,” Clutterbuck said. “ So far nobody has proved a commercial discovery, but there is an expectation in the industry that this is likely to happen.”

Source: Bloomberg

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May 31

White Rock, Canada, May 31, 2011 – In an effort to accelerate shale gas development, Realm Energy International Corporation (“Realm Energy” or the “Company”) (TSX-V:RLM) (www.realmenergy.ca) has contracted Halliburton’s Consulting and Project Management team (“Halliburton”) (NYSE: HAL) to work with Realm Energy to significantly expand the technical evaluation and ranking of the highest-potential shale deposits found in emerging prospective basins globally.

Realm Energy and Halliburton Consulting began their collaboration in 2009 with an emphasis on European basins. During this initial effort, Realm Energy, supported by Halliburton, targeted ten discrete sedimentary basins in four European countries for evaluation.  The collaboration identified key prospect trends and Realm successfully acquired 650,000 gross acres and has 4.4 million acres under government application of contiguous tracts of land over significant shale resources.

“Realm Energy is now moving into an operational phase with our European leasehold and will contract with Halliburton to leverage their extensive shale-development knowledge, gained from their significant presence in the North American market,” said Realm Energy Chairman, Craig Steinke. “We could not have achieved the quality of our European portfolio without the help of Halliburton’s consulting organization; this is why we have expanded our collaboration to assess and rank shale resources globally.”

Source:  Realm Energy

 

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May 19

US President Barack Obama will focus on energy cooperation, including shale gas development, when he visits NATO partner Poland for the first time next week, a US diplomat said Wednesday in Warsaw.

“Energy is a pillar of Polish-American relations and it is sure to be the subject of discussions when President Obama visits Warsaw next week,” US ambassador Lee Feinstein told delegates to a shale gas conference here.

Global fuel giants are exploring Poland’s shale gas deposits, which a recent US study pegged as having a potential 5.3 trillion cubic metres of natural gas which could last Poland some 300 years.

The US has become a global leader in the production of natural gas extracted from shale, boosting its energy security, driving down prices and making it an exporter.

Poland hopes it could reap similar benefits. However, experts insist that with exploration in the very early stages, it is too soon to gauge commercial viability.

Ex-communist Poland covers 30 percent of its gas needs from domestic resources.

“The issue of shale gas has become an important element of Polish-American relations, strengthening the extra-military importance of the United States for Poland’s security,” Foreign Minister Radoslaw Sikorski told the conference.

He said Obama’s visit was “an excellent occasion to deepen Polish-American energy relations and to identify further joint action on shale gas.”

France recently banned shale gas exploration amid environmental concerns over hydraulic fracturing used in gas extraction.

“We know that in some countries there are initiatives to ban shale gas exploration, but those who are planning this we say ‘be not afraid’, new technologies always bring some new challenges,” Sikorski added.

“If we would let fear guide us, we could not invest in nuclear energy and a medium-sized country such as France or Poland needs both,” he added, referring to plans by Warsaw to build Poland’s first nuclear plant by 2020.

Source: Yahoo! News

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