From UK to Turkey all Europe is working on shale gas
In December 2012, UK made the most noticeable step in Europe when ending the moratorium on fracking process after the Blackpool tremors in 2011.
At that time not only UK lifted the fraking ban but also unveiled tax breaks and advertised to become the European leader of the shale gas exploration production.
With this declaration, UK’s expectation is to attract investors in UK and to revive its oil & gas and petrochemical industry on the model of the USA.
Ultimately the goal is to compensate the current import of natural gas by local production not only for power generation but also for downstream transformation into hydrocarbon products for domestic applications and industries.
To reach this point, UK will face a long way to go with many blocks on the road.
According to PriceWaterHouse and Bloomberg specialists studies, to offset natural gas imports, UK should produce 4.5 billion cf/d of gas requiring to drill approximately 10,000 wells.
In respect with the legal environment in the UK far different from USA to develop underground resources, it may take 15 years to achieve such drilling deployment.
In addition because of the higher density of population in UK than in USA and the difficulties to access the resources, the production costs should be about twice higher ranging between $7.10 to $12.20 per million btu instead of $3 to $5 in the USA.
Despite these challenges, the development of the shale gas in the UK remains attractive and shows the way for all the other European countries.
German Bundestag completed text for shale gas bill
In February 2013, the German Government finalized the text to support the law to allow fracking process in allocated areas of the country.
Despite the opposition of the powerful Green Party, the German Government managed to find a balance text preserving the drinking water sources and natural storage.
In considering all the protected zones to be excluded from hydraulic fracking, this law would give access to 80% of the German territory for shale gas development.
The German Institute for Geosciences and Natural Resources estimates the recoverable resources of shale gas somewhere between 700 billion and 2.3 trillion cubic meters.
The large incertitude between these numbers is due to the lack of actual exploration so far preventing to appraise the geophysic analysis and estimations.
In a context where Germany produces only 14% of the gas it consumes and import 40% of its needs from Russia, the development of the shale gas takes momentum.
Poland to adjust tax system on shale gas
In 2011, Poland, as France, was pointed out by the US Energy Information Administration (EIA) as holding the most important unconventional reserves with 5.3 trillion cubic meters of shale gas.
These reserves should cover the domestic needs for the next 300 years.
But there are questions marks about the reality of this figures and Chevron already returned unfruitful licenses to the Government after spending money in dry holes.
Anyway, the shale gas reserves in Poland large enough to reduce and later to eliminate its reliance on the Russian gas import.
So Poland intends to remain in the lead of the shale gas exploration and production in Europe including to challenge the conventional offshore gas production in UK or Norway.
In order to support the national companies PGNIG , PKN Orlen or Lotos and the foreign companies Chevron and Marathon Oil to continue to explore shale gas in Poland, the Government is preparing a new tax system.
In February 2013, the Environment Ministry submitted to the Finance Ministry a project where shale gas should support 1.5% and conventional gas 3% tax.
The final text to regulate the tax system in Poland should be released on the next months.
Romania paves the way to Chevron on shale gas
Based on the only and unproven source of information of the US EIA, Romania together with Bulgaria and Hungaria had estimated the reserves of shale gas to 538 million cubic meters.
Even if Romania is not among the top countries in Europe by the amount of unconventional oil and gas reserves, the potential formations of shale gas are important enough to attract companies with advanced experience in the shale gas such as Chevron.
Chevron obtained permits to start exploration on the second half of 2012, but a moratorium voted in a shift of the Romania Government left all plans on hold in May 2012.
But the pragmatism seems to take it over so that Romania is now lifting the ban and resuming Chevron‘s permits.
The primary intention of the Government is to know if there is shale gas or not in Romania and in which quantity.
Turkey to boost shale gas and conventional resources
As the other European countries, Turkey is importing most of its energy needs, including for natural gas coming from the Caspian Sea region.
Based on the only reference available published by the US EIA in 2011, Turkey shale gas reserves could reach 1.2 trillion cubic meters (tcm).
But other figures published by Turkey officials and experts fluctuates from 6 billion cm to 20 trillion.
In front of these estimations the operating companies such as Shell and TransAtlantic-Petroleum remain cautious to give any number so far.
Both companies are currently exploring potential shale gas formations in the southeastern city of Diyarbakir.
Until first exploration will give results, the actual reserves of shale gas in Turkey will be challenging to quantify.
Anyway, major and junior companies coming from USA, Canada and UK are reported by the Ministry of Energy to apply for exploration permits in the Turkey shale gas basins concentrated in the southeast, east and western Thrace regions.
As part of it Turkey Vision 2023, the Turkish Government is favoring the local and foreign companies to invest in the exploration and production of conventional and unconventional oil and gas, onshore and offshore.
From UK to Turkey in passing by Germany, Poland and Romania, we can notice over the last six months a shift in Europe about the shale gas exploration regardless the uncertainty of the estimated reserves.
The only recognized evidence for all these countries is that shale gas is a unique source of growth with environmental risks which appear more and more manageable.
