by Elpida Theodoridou. Originally published on 2013/11/18

The boom of shale gas in the United States has created a great discussion over the past few years. The drop in gas prices combined with the increased domestic gas production, brought the US a step closer to its energy independence. Thus, one can only hope that a pattern like this will be replicated in Europe. But is it really possible to embrace this energy revolution in Europe when not even the basic foundations have been set for facilitating this energy transition? If Europe wants to attempt any profitable exploitation of shale gas, numerous obstacles have to be overcome. However, it is not anticipated that the situation will change significantly in the following years.

What is shale gas?

Shale gas is considered to be an unconventional type of natural gas that can be found in the shale rock formations of the subsoil. However, unlike conventional gas, shale gas requires unusual methods of extraction, mainly due to the low permeability of the shale rock. As a result, the use of the controversial hydraulic fracturing (fracking) technique combined with horizontal drilling have proven to be the main adequate methods for extracting the gas, so far. However, the introduction of fracking has caused much controversy. The risk of water and air contamination, along with the possibility of earth tremors, are bringing scepticism in the discussion of exploiting shale reserves.

Shale gas in the United States

The shale gas bonanza began around the mid 2000’s, with domestic production starting at 1,293 Bcf (Billion per Cubic Feet) in 2007 and reaching 7,994 Bcf in 2011[1]. Within a few years, consumption of natural gas accounted for 95% of the domestic production, with shale gas expected to be “the greatest contributor to natural gas production growth”[2]. The current energy revolution of the United States, reinforced its energy security. Increased domestic production of natural gas and reduced imports are bringing the US closer to energy independence. Additionally, with the shale gas industry blooming, thoughts of exporting energy are rapidly increasing. Reaching the point where the US starts exporting natural gas, would  definitely make shale gas a game-changer of the energy sector. With Cheniere Energy Partners having agreed upon providing shale gas to the British electricity company Centrica, it is a matter of time before the export rate begins to rise, leading possibly to even greater benefits for the US.

Shale gas in Europe

This unexpected boom of energy in the US, brings to the surface the wishes and desires of its European counterparts. Yet, the situation in the European continent is completely different. The various obstacles that emerge make it difficult to proceed not only with the viable exploitation of the shale gas reserves but even with their exploration. First of all, the ground characteristics in Europe are different from the US. The Americans have already established and progressing with the necessary technical knowledge for drilling while in Europe, apart from the difficulties of the ground, not even the basic knowledge is there. Furthermore, despite any attempts for further European integration, the issue of energy remains the responsibility of the member-states. Consequently, without a common European energy policy, each country is responsible for setting its own regulatory framework on energy issues. As the debate on whether shale gas should be extracted or remain in the ground has spread all over Europe, crucial differences among the states are starting to show. Countries like the United Kingdom and Poland appear enthusiastic to embrace fracking and shale gas, while France and Bulgaria have imposed a moratorium, banning any exploratory operations.

Hence, the important question comes to the following: is the extraction of shale gas actually possible in Europe? It is a fact that the ground conditions of the European subsoil do not favour the extraction. Furthermore, Europe is much more densely populated than the US, making it difficult to set the drilling operation sites close to populated areas. Moreover, the lack of experience and technical expertise constitutes a major setback. Nonetheless, none of these obstacles are as crucial as the continuously rising public opposition. With protests and demonstrations taking place all across Europe, based on the environmental and health concerns related to fracking, it seems rather unlikely that the opinion of the population will change. And in order to make shale gas a successful story in Europe, it is crucial that these problems are addressed and resolved.

But is it only these idiomatic characteristics of the European shale reserves that hold back the exploitation process? The European energy agenda is undoubtedly linked to other policy areas. Geopolitical and economic agreements between Europe and its energy partners (especially Russia) can potentially hinder the profitable utilisation of this type of natural gas. Moreover, what lies behind France’s reluctance of extracting the gas? Can somebody really talk about environmental concerns when the major source of energy comes from the nuclear industry? Is it a random fact that Bulgaria, a key-country in the European Pipeline Network, decided to ban shale gas from its ground? And on the other side, why is it that Poland (a country heavily dependent on Russian energy) is so determined to exploit shale gas? These disseminated opinions in Europe regarding the direction of shale gas show something more than just different state policies. If somebody wants to understand the current developments, the various games played in the European geopolitical scene should be taken into consideration.

Conclusion

Regarding the shale gas industry, it is doubtful whether Europe will be able to replicate the success of shale gas in the US, even to a lesser extent. With many conditions being significantly different, and despite the zealous promotion of some proponents of shale gas in Europe for the exploitation of the European reserves, it appears quite unclear whether and when any operations will actually take place. Apart from the UK, the majority of the countries are opposed to shale gas or simply have not expressed any major interests yet. Moreover, if shale gas is indeed successfully extracted, it will certainly increase the security of gas supply and the overall energy security of Europe, but it is rather unlikely to bring about a decrease in gas prices. No matter what happens though, none of these assumptions will be fulfilled, unless Europe overcomes these obstacles or sets a common European energy policy. Thus, is it even sane to think about a common European energy policy when  the prevalence of national interests over the supranational ones is strikingly clear? Whether shale gas has the possibility to contribute to the European energy security and to what extent, is a question that definitely cannot be answered at this moment. What is important to remember is that as long as the dependency on imports is continuing, the European energy independency and security remain a distant desire.

[1] http://www.eia.gov/dnav/ng/ng_prod_shalegas_s1_a.htm

[2] http://www.eia.gov/forecasts/aeo/MT_naturalgas.cfm

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