As shale gas becomes a reality in the U.S., now causing industry players to worry about a long-term glut of cheap natural gas in North America, the industry is promoting Europe’s potential in this regard as well.
While Europe doesn’t have the shale resources of North America, any bit could go a long way given that much of the continent is currently prisoner to the whims of Russia and its massive natural gas production.
Thus James Slutz, the director of International Oil and Gas Ventures for Washington-based CAPPA Fund III, has emphasised the political benefits at a technical forum in Italy:
Slutz highlighted the geopolitical implications of developing a new source of natural gas in Europe. “Recent years have witnessed Russian dominance of natural gas pipelines, and the associated energy security concerns in Europe. What is the European commitment to energy security? How quickly will shale gas resources be developed? Shale gas has dramatically changed North America from an expected large gas importer to potentially a gas exporter – in under a decade. Many Russian experts see shale gas as a threat to their market share and their resulting political influence in Europe.”
Shale gas deposits exist throughout western and central Europe, with large potentially recoverable reserves in Poland, Germany, Hungary, Romania, and neighbouring countries. Initial exploration is already under way in Poland, Sweden and Germany, but additional exploration is needed to determine the extent of the reserves. Conservative estimates place the potential at around 500 Tcf, or roughly 5% of existing global supply.
Poland is the most promising country because of its large reserves, with several oil majors and super-majors already initiating exploratory drilling, but government regulation and licensing is a key factor in any decision to make a direct investment in a foreign country. “The fact is, almost every country in that region has shale gas deposits, and those who develop it will be those that provide a transparent and predictable environment for investors in a long term, high risk, capital-intensive industry,” said Slutz.
He’s obviously pitching his industry to European nations, but the development of shale gas in Europe is probably a win-win. Except for Russia, whose economy is heavily dependent on oil & natural gas exports according to the EIA. You can read more about the situation at Rig Zone.