Poland Calls on Europe to Place More Focus on Shale Gas

Poland called on the European Union to give more weight to the role of shale gas in its energy policy in order to cut the region’s dependence on imports.

The EU relies on Moscow-based OAO Gazprom for about a quarter of its gas, about 80 percent of which is shipped via Ukraine. The bloc is seeking additional sources after price disputes between Russia and its neighbor disrupted fuel supplies to the 27-nation EU twice since 2006.

“Additional gas deposits could cut make the Union independent from external suppliers, so non-conventional gas should be in the center of the EU debate about energy security,” Poland’s Foreign Minister Radoslaw Sikorski told a seminar in Warsaw today.

Shale development, where rock formations are horizontally drilled and fractured using water and other liquids under high pressure, is driving a surge in U.S. natural-gas output. It last year made the U.S. the world’s largest gas producer, overtaking Russia, and drove prices lower.

In Poland, shale deposits are already drawing interest from companies including Exxon Mobil Corp., ConocoPhillips and Chevron Corp., according to the Polish Geological Institute.

“We have so far issued 56 licenses to drill and we’re still receiving new applications,” Henryk Jezierski, Poland’s chief geologist, said at the seminar. “Drilling will take some time and in four to five years we will know if the gas is accessible.”

Gornictwo Starts Drilling

Polskie Gornictwo Naftowe i Gazownictwo SA, Poland’s dominant gas company, will start drilling for shale gas as early as next month, Deputy Chief Executive Officer Waldemar Wojcik said at the seminar today.

Europe’s unconventional gas reserves may total 1,200 trillion cubic feet, according to Royal Dutch Shell Plc, about five times the continent’s proven gas reserves. Still, drilling shale gas fields in Europe profitably may prove harder than in the U.S., according to geologists.

The International Energy Agency said in November it doesn’t see unconventional gas production in Europe as “changing substantially” the overall supply picture until about 2020.

“It’s too early to tell whether the shale gas revolution comes to Poland, but there are reasons for optimism,” Richard Morningstar, the U.S. special envoy for Eurasian energy issues, said at the seminar.

Ensuring the EU’s gas and oil supply security is a priority for Energy Commissioner Guenther Oettinger, who took his post in February. To diversify its supply sources the bloc agreed last year to help fund the 7.9 billion-euro ($10.5 billion) Nabucco pipeline, which is due to send Caspian-region gas via Turkey to Austria starting in 2014.

The EU has also set a target to get 20 percent of its energy from renewable sources by 2020 in order to cut the bloc’s dependence on imports and help attain its goal of reducing greenhouse-gas emissions.

Maciej Martewicz and  Ewa Krukowska for Bloomberg

Source:  Businessweek