Its the Rocks That Matter

This summer, UK-based energy technical consultant Novas Consulting released a multi-client report entitled Shale Gas In Europe – A Technical Review detailing comprehensive screenings of European shale gas plays and their potential – and for some regions that potential is huge.

One of the most lucrative regions in Europe is Poland says Phil Clarke, Managing Director and Geologist for Novas.

“There is no doubt that Poland stands out as the most prospective country in Europe for shale gas potential,” he says.

Clarke’s company found what others have been finding in Poland: thick-organic rich shale plays at shallow depths beneath the surface.  But Clarke says while early movers have been targeting Poland in a flurry of initial activity and licensing, other “hot spots” in Europe may also contain the same potential – countries such as Sweden, Germany, France and Ukraine for example.

Many of these countries contain “highly-organic rich source rocks that could be ideally suited to shale gas production,” he says.

The rocks are actually the key difference between the Novas Consulting report and many other reports on European shale gas that have been surfacing since the recent shale boom in the United States.  As opposed to looking at opportunities through a lens of geography – country by country – Shale Gas In Europe – A Technical Review was conducted as a rigorous geology review.

“For each potential play that we identified, we used our regional geological knowledge to identify the area of the play and the likely thickness and richness of the source rock,” says Clarke.  “Using this information we were able to make estimates of the likely volumes of shale gas associated with each play and we allocated these volumes as ‘economically viable’, ‘economically stranded’ or ‘uneconomic’ depending on their depth of burial.  Only at this point did we slice the cake by country and break out the volume estimates on a geographic basis.”

To date, Clarke says this is the first published attempt to assess shale from a “bottom up” approach, providing a degree of insight and consistency that has not been seen before.

Conducting the report from a geology standpoint also allowed Clarke’s company to identify countries that have been overlooked in the frenzy of recent licensing activity, but could very well contain the same potential as some of the more popular shale plays.

On such country is Ireland.  Though previously undervalued, Clarke says Ireland contains large areas of gas mature carboniferous shales making the country “technically attractive” for shale seekers.

But what exactly makes a region technically attractive?

“A successful shale gas play depends on some basic geological criteria,” says Clarke.  “A thick and extensive organic-rich shale must be present and this must have been buried to sufficient depth so that the organic matter has matured and gas has been generated.  Typically, this requires the shale to be buried to depths of 4,000m or more, although the precise depth of burial can vary considerably and depends on the local geothermal gradient.”

What makes shale economically viable, however, is its ability to be uplifted at a later stage to shallow depths.  Shale plays must also be conducive to fractures – i.e. you must be able to drill into the shale in order to extract it. Both of these traits, according to Clarke, are common feature in US shale plays, and are a few of the reasons they have become so successful.

This success has directly correlated in the European search for shale gas for many reasons, says Clarke.

“There was a general consensus that shale gas in the US was not a unique geological concept and therefore that comparable plays should exist in Europe,” he says.  “The desire for greater European security of supply [also] led to shale gas being seen as a potential short term solution [against] a backdrop of high gas prices.”

While Europe unmistakably has vast shale gas potential, however, one of the crucial elements to making shale gas a viable alternative energy source is the infrastructure necessary not only to extract the gas, but also to produce it, ship it and sell it.   This crucial element is currently lacking in Europe, according to Clarke.

“The US market grew rapidly from small beginnings thanks to an abundance of cheap onshore rigs and labour and the widespread availability of specialist operational support (for fracking, completions, etc),” he says.  “The onshore Europe operational capability is currently much smaller and generally operates at a higher cost base.  This creates an immediate problem for shale gas, since it requires intense low cost operational activity to build sustainable and economic developments.  If we add in the more fragmentary nature of European geography (country boundaries, smaller landholdings, more intensive land use, etc) then the development of the scale of activity required for shale gas exploitation presents a significant challenge.”

These challenges could also be met around the world.  Though the Novas report only focused on Europe, Clarke maintains that the geological potential for shale also exists in many other places around the globe.

“From a purely technical perspective, we have seen prospective shale gas plays in South Africa, Australia and the Far East,” he says.  “With time and the right market conditions, any of these areas could develop a viable shale gas market.”

Visit Novas to learn more about their consulting services and their report Shale Gas For Europe – A Technical Perspective