Shale Gas Production in Poland Faces Failure

Energy | March 27, 2012, Tuesday // 18:58|  views

Photo by Transatlantic Petroleum, a company exploring for shale gas in Bulgaria.

The production of shale gas in Poland, which is at the forefront of the novel technology in Europe, might face significant hurdles and prove economically ineffective.

During last week Polish authorities annouced that shale gas deposits in the country have turned out significantly less than expected and that their extraction will cost 3 times more than in the birthplace of the technology - the US.

A number of unsuccessful drillings and poor infrastructure in the Polish countryside have cooled investors' ambitions, writes Bloomberg, quoted by Bulgarian media.

US companies Chevron, Exxon Mobil and ConocoPhilops have landed permits to explore for shale gas in Poland, turning it in the most promising shale gas country in Europe.

But one exploration started, it turned out that significant parts of the infrastructure had to be built from scratch, and the rock was harder to break than expected.

To boot, the Polish Institute of Geology published data decreasing by 85% an optimistic estimate announced last year by the Energy Information Administration, according to which Poland had some 5.2 T cub.m. gas, or 300 years' worth of consumption.

Similar estimates have been flaunted by Chevron and the US Embassy to Bulgaria to support Chevron's interest in drilling for shale gas in the Bulgarian north-east.

Chevron secured a permit, but its going ahead was frozen by a moratorium on shale gas exploration and extraction in Bulgaria by the Bulgarian Parliament under pressure from environmentalists.

Citizens have warned about the environmental hazards of the technique for producing shale gas called hydraulic fracturing, but senior Bulgarian politicians have already spoken in favor of reversing the moratorium.

In Poland, US companies had to spend on average USD 11 M for drilling do depth 2,000 m (against USD 4 M costs in the US), but frequently had to go as deep as 3,600 m.

Local roads are in a poor condition and are anyway too narow to transport huge drilling platforms, reports Bloomberg.

The agency comments that a different geologic structure and more densely poplulated areas in Europe make it probable that the environmentaly hazardous technology might not have a boom in Europe similar to the one it made in the States.

Bloomberg also recalls that not only Bulgaria, but also France have for the time being banned the technology. It adds that American companies have nevertheless not given up investment plans yet.

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Tags: ConocoPhilips, Exxon Mobil, drilling, shale gas, hydraulic fracturing, fracking, Chevron, Poland, Polish, Bulgaria, France, US, states, America, europe, environmentalists, environmentally hazardous, US Embassy


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