European Shale Gas: Not a Revolution, but a Slow Sustainable Growth
The precautionary approach of Europe toward shale gas will slow down but will not stop the industry. That was the general message of the conference that took place the 29th April at the Energy Institute, City University, London. All the panelists agreed that the future of shale gas in Europe is strictly connected to local population accepting it.
“If you see all the directives and the best available techniques and technologies, you should normally feel that the environment will be fully protected”, said George Kremlis, Head of the Cohesion Policy and Environmental Impact Assessments Unit in the Directorate-General for the Environment of the European Commission.
During the conference, Kremlis underlined the importance of the precautionary principle, as only scientific-based decisions will allow shale gas activities to gain public acceptance. Minimizing the environmental backlashes of shale gas, developments will then be sustainable.
“We have the US experience and we learnt from them. The European policy framework is more stringent. If we will have an ad hoc EU framework, it will be even more sophisticated. We are talking about mapping and distances from groundwater sources. Our regime will be an integrated holistic one, addressing also climate”, added Kremlis.
This cautious approach already calmed down the enthusiasm of investors, according to Bob Buhr, Director of the Credit Research Department at Société Générale. He thinks that a European shale revolution is not realistic.
“Things are moving slow as they tend to be in general in Europe”, said Buhr, sceptical about the long-term prospects of shale gas, both in Europe and United States.
“Whatever will happen with shale gas internationally, it is not going to follow the US model… Europe does seem to be intent on capturing the externalities of this process”, added Buhr, reminding a recent report by KPMG. According to the study by the professional service company, European fracking activities can cost up to 40% more than in US.
Graham Dean, Director at Reach Coal Seam Gas Limited, agreed with Buhr on the fact that US and Europe are structurally different. He claimed that Europe has to implement different mechanisms to make shale gas acceptable for the population.
“The opposition we got here is essentially cut and pasted from the opposition in the States. The opposition in the States is that the people who got hydrocarbon rights get a lot of money and people who didn’t get hydrocarbon rights don’t get any money. The rich people are becoming richer”, said Dean referring to the United States.
Dean argued that this opposition is not grounded in the UK, as the system is completely different and the hydrocarbon rights belong to the Crown. Coherently, he claimed that a participation of local communities to the dividends is essential. Advantages for the population can increase the acceptance of shale development in Europe.
“Shale gas could create up to 50,000 jobs in ten years time”, concluded Dean.
By Sergio Matalucci