Facing up to the Challenges: Unconventional Gas Industry in Europe
Where’s the gas? asked Gyorgy Szabo, Member of the Board, CEO, Falcon Oil & Gas.
In his opening address to delegates atthe CEE Unconventional & Shale Gas Development Forum, conference chair Szabo depicted the challenges faced by the unconventional gas industry in Europe.
In Poland, he said, the gas had disappeared – figuratively speaking.
“Three-four years ago, we had these brilliant slides which highlighted the locations of gas prospects in Poland, while in the US in the past 3-4 years they have completed more than 100,000 shale wells. What about Europe? I don’t know the exact number. Maybe 10, or maybe less. So how can we estimate the resource on the basis of that 10 wells?”
Showing various estimates, Mr. Szabo noted that Brussels had indicated that the resources in the EU were much less than what had been expected and showed that less than half of the energy mix in the EU by 2050 was expected to be based on fossil fuels.
“If we look at the media, everywhere it’s negative,” he explained regarding shale gas in Europe. “Bulgaria has a ban, Spain has a ban except for the Basque region; Austria is interesting: OMV does not want to deal with shale in its home country, but there are problems in Romania.”
Successful shale production in the UK required special preparation, according to him.
He said, “Poland is absolutely different. Two years ago we heard only positive things, but today the picture has become confused.”
Mr. Szabo presented a quote which he said showed how things had changed there: “Environmental issues are no longer the domain of polarizing radicals.”
The first official speaker in Budapest was Frank Umbach, Associate Director, European Centre for Energy Resources and Security, Resident Senior Fellow, Atlantic Council, who offered his evaluation of how Brussels was handling the unconventional gas issue in Europe.
He opined: “There is a kind of division of opinion in Brussels. There is an Environmental Committee of the European Parliament, which is indeed still critical, but the very influential Committee on the industry and energy policy is very much in favor of pushing the unconventional gas developments in Europe, and is very much also working with the Commission.”
Considering that the increase of energy demand in Europe was uncertain and that natural gas imports to the continent were much more diverse than five years ago, it wouldn’t be easy for unconventional gas, he said. But resources in Europe could fulfill 60 years of demand at pre crisis levels.
“We need certainly to drill many more wells, before any more concrete and detailed assessment can be made for future European potential. In general, the situation is looking more positive than it’s often seen,” he commented.
According to Umbach, public acceptance issues would be the main challenge going forward. He said: “In my estimation it is still underestimated by the industry, which very often has become very reactive to the debate, letting it be taken over by environmental lobbies. Now it’s becoming increasing difficult to bring some balance to those public discussions on the agenda later.
“That’s an issue where we need more thinking on the industry side, to achieve a better position in the public debate,” he added.
Note from Editor - in clarification of Mr. Szabo's comments, approximately 30 exploratory drillings have taken place in Europe, more than two thirds of them in Poland.