Guest Post: Is Europe Next For A Shale Natural Gas Boom?

Tyler Durden's picture

Submitted by Daniel Graeber of OilPrice.com

Is Europe Next For A Shale Natural Gas Boom?

Chevron and Royal Dutch Shell are getting an early start on shale exploration campaigns in eastern European countries. With the United States fast emerging as a shale natural gas leader, European economies eager to bolster their own energy independence are working to follow suit. Shell plans to spend more than $400 million to tap into Ukrainian shale, while Chevron has similar ambitions in eastern Romania. While regional shale gas production isn't going to match that seen in the United States, it's expected to eventually weaken the Russian grip on the region's energy sector.

The U.S. Energy Department's Energy Information Administration estimates that, together, Bulgaria, Hungary and Romania may hold many trillion cubic feet of shale natural gas. That was enough to give U.S. supermajor Chevron the confidence to move ahead with an exploration campaign there. The company began taking on shale concessions in 2010 and has since announced plans to start exploration. If EIA estimates are close to accurate, there may be enough shale gas in Romania to cover its energy needs for the next 40 years. The company, however, still needs environmental permits to move forward with its campaign.

Royal Dutch Shell, meanwhile, announced in January it was spending $10 billion to develop the shale potential in neighboring Ukraine. Chief Executive Officer Peter Voser said on the sidelines of last month's economic summit in Davos, Switzerland, that his company sees "a lot of potential" in Ukraine, where the EIA puts the reserve estimate for shale natural gas at 42 trillion cubic feet. That's the third largest for shale of any of the Eastern European countries. Kiev says domestic natural gas productions should eventually eliminate the need for imports altogether.

Russian energy company Gazprom said Friday there was no way Ukraine could avoid paying the $7 billion it owes for unused natural gas last year covered under a "take-or-pay" scheme. Both sides have been at odds over gas contracts since at least 2006 and last year, the European Commission launched an anti-trust probe into the natural gas giant's business practices in the region.

For shale oil, PricewaterhouseCoopers reported that production could add another $2.7 trillion to the global economy per year by 2035. For shale, the picture could be just as bright. In the United States, shale natural gas could add another $118 billion to the country's gross domestic product by 2015 and triple to $231 billion by 2035. In parts of Europe, however, nearly 70 percent of the gas consumption is covered by imports and as much as 90 percent of that is from Russia. In terms of conventional reserves, however, few in Eastern Europe have enough conventional reserves to make a difference. Dutch company KPMG says that Romania and Ukraine are among the leading shale gas markets in the region, however. While the reserve potential is significant, it's no match for the United States. Nevertheless, KPMG, in a 2012 audit, found that shale gas production in Eastern Europe may eventually contain Russia.

"Shale gas production will not reach the same volumes as those of North America, it is expected to be a competitively-priced source of energy, as compared to that of imported Russian conventional gas," the audit states.

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Stackers's picture

Not if the Russians can do anything about it

Kitler's picture

Perrier avec methane?

I wonder if the naturally methanated version is going to be giving the naturally carbonated version a run for the money. Something about flaming mineral water seems to me to be a natural for marketing as The European Economy burns to the ground.

http://www.youtube.com/watch?v=4LBjSXWQRV8

Babushka's picture

The most scary documentary about fracking - Gasland.

http://www.imdb.com/title/tt1558250/

 

DoChenRollingBearing's picture

POLAND I have read (elsewhere) may have huge deposits, as hinted at on the map above.  And it would be good for Europe;s own energy security to have options other than Russia...

I have also read that flame came out of faucets in PA before fracking ever started, just sayin'.  And if Europe does not WANT to frack, they do not have to!  It's their decision.

Vashta Nerada's picture

Any company wanting to fracture in Poland had better be willing to tear up any contracts with Russia first.

hedgeless_horseman's picture

 

 

Look at that map...Iceland wins again! 

Agstacker's picture

I've read that gas lines were hooked up to the faucet prior to filming.  Also, ever been to Yellowstone Nat'l. Park?  Man the smell of sulphur is so strong in places I'd be scared to light a match!

401-Kulak's picture

The scariest part of that documentary is that people believe it despite there not being evidence of a single well contaminated by fracking.

http://www.ibtimes.com/epa-says-no-evidence-fracking-polluted-water-rural-pa-426212

The next scariest thing is that fracking will remove Terror and the Middle East from being the center of conversation as it has for the last 40 years. 

dark pools of soros's picture

go drink and bathe in that water for a few days

nflux's picture

I just got back from rural eastern ohio where they are fracking, bathed and drank the water and didn't even give a thought about it. talked to many people from the area and never once heard anybody say athing about the water being bad or tasting funny. They didn't say anything about fracking at all.

jerry_theking_lawler's picture

as with anything, there can be failures of the 'well'....you can rupture the casing (pipe), you could blow out a casing shoe (concrete bottom or concrete seals in varying parts of the casing), or you could have a BOP blowout......but there are indications that the well has blown out.....then you could determine where it is blown and have an idea if there is even remotely any groundwater contamination potential.....

 

most oil/gas wells are deep >6000 feet. most water wells are no more than 200 feet. you do the math on the amount of 'earth' that is between the two.....

hardcleareye's picture

ROTFLMAO....  The above post wins the award for Profound Stupidity....... I don't know were to start...  with no evidence of a single well contaminated by fracking or the implied belief that fracking will solve our middle east energy dependency.....

I would suggest you take the time to read about this little "super fund" site,  in Pavillion Wyoming, the attach link is to the EPA Report.

http://www.epa.gov/region8/superfund/wy/pavillion/

epwpixieq-1's picture

"The next scariest thing is that fracking will remove Terror and the Middle East from being the center of conversation as it has for the last 40 years."

Putting aside the marketing slogan about lets drill at home because it will remove these problems we have with the Middle East, it is just wrong. But, nice, very nice, even Stalin would have been proud of you as such propaganda slogans touch everone and at the same time has nothing to do with the technicality, EIOER or safety of the process.

But hay since we are on the wave of sloganism, I would put it in this way:

The next scariest thing is that fracking will NOT remove Terror and the Middle East from being the center of conversation because it does not address  the CORE of the pblem with OVERCONSUMPTION of Natural resources the US has. Only when US start to leave with its means, then we shell have Peace.

Sorry to sound as the Sith Lord in "The Revenge of the Sith".

AnAnonymous's picture

If 'americans' do not manage to consume both the remaining resources in conventional oil/nat gas and stuff like shale nat gas, they will shame all their ancestors.

The very idea of the world 's resources to be enough to cover 'americans''consumption does not belong to 'americanism'

'Americans' consume as much resources as there are available.

Adding more inputs simply means 'americans' will consume more.

In time, 'americans' will achieve independence. When a site is depleted of its resources, one no longer depends on the site for the resources it no longer holds. One is independent.

This is the only independence 'americans' are able of. They wont know other independence than depletion of resources.

'Americans' growing independent of a resource when it is still available? Nah.

Forbes's picture

Scary, because Gasland is mostly fiction and fraud. Fracking has nothing to do with elements in the water long before fracking started. Anecdote is not data. Folks with their hand outstretched looking for a payday from deep pockets, is all. Do some simple research before spouting celebrity-promoted propaganda, sheeple.

dark pools of soros's picture

wow what a fucktard...  simple research >> go drink a gallon of that poison or stop typing about it

 

simple enough?

hardcleareye's picture

I haven't seen Gasland and I don't care to.

For fracking to "work" successfully you need two key components.....  the rock you what to fracked is "softer than the surrounding rock" and a full understanding and mapping of the fault lines...  something the Oil and Gas patch boys in Texas have a real grasp for (they are the ones who have been using this tech for many years, google George Mitchell),,  you have neither of those conditions in the Marcellus Shale found in NYS and Penn.

 

 

 

 

tip e. canoe's picture

you have neither of those conditions in the Marcellus Shale found in NYS and Penn.

correct, that's why they're trying to rig the rules to commandeer as much land area as possible.  and yes, i watched Gasland but turned it off, b/c there was too much cheap propaganda for my tastes.

epwpixieq-1's picture

First it is not fracing it is REFRACKING, just this tells you something form an engineering point of view ( if you have some IQ to realize it of course ).

Second, you actually need 4 things ( not 2 per your post ), if you ever wonder what these are just look here: http://www.resilience.org/stories/2013-01-04/shale-gas-and-fracking-jan-4

I am sure Dr. Ingraffea, will be very happy that his talks help people to be educated in the BASICS of the process.

And finally the third, "they are the ones who have been using this tech for many years" - I guess that under many years you have in mind something like 5-7, because if you listen carefully the above lecture, you will realize that all the needed technologies ( the 4 things needed, mentioned in "second" ), have become viable technologies ALL TOGETHER only in the quite recent years.

So, if you post something, please do not insult the analytical skills of the readers here, post intelligently misleading information ( at least ), otherwise do not bother to post at all.

Sabastian's picture

Gasland is pure propaganda and dribble.  Take misrepresentations and the movie is as scary as Dr Who.

SRSrocco's picture

THE SHALE ENERGY DELUSION

Here we can see the folks at the EIA and IEA are still putting out HYPE & GARBAGE.. nothing has changed.

Not only are the depletion rates for Shale Gas & Oil somethng like 40-50% first year and neary 80-90% by year 5, the EROI - Energy Returned on Invested is much lower than conventional oil and gas.

EROI for Shale Oil is about 4-5/1 and is probably lower due to the huge amount of drilling in the past few years.  Shale Gas is much higher... something like 50-70/1.  However, a great deal of that EROI ratio falls when you have to pay for pipeline and transmission costs.

Let's not forget a modern society as ours, needs at least a 10/1 EROI or higher to sustain itself.  Who cares if we have lots of shale oil... if the net energy is not enough to keep our way of living??  Does anyone in the ENERGY INDUSTRY ever think of that?  Or course not.

Anyhow, we get to watch again as the ENERGY INDUSTRY spews more HOPIUM, just like it did in 1999, when it said $10 a barrel oil would be here for a decade....LOL

 

greyghost's picture

oh holy shit, simple math says that they wouldn't drill if there wasn't money to be made. eroi is just another worthless equation thunk up by some ass professor who never worked a real job.....ever

epwpixieq-1's picture

Your simple math is wrong due to a fundamentally inaccurate assumption that they are using their own money to drill. Guess what, they are doing it on CREDIT, and they DO NOT CARE but to get the money and show some extremely optimistic numbers, and who do you think will finally pay for all these inflated forecasts that will get down to Earth and crumble in the next 3-4 years. Sure enough, you, me and everyone else with their TAX ( and inflated ) $$$.

Brace for the impact, for it will not be pretty, and it will be COLD.

Unless of course you build your own Rocket Mass Burner, could not resist the joke ...

alex_g's picture

yet another idiot who doesn't know the difference between the words "depletion" and "decline".

SRSrocco's picture

alex_g... actually you are correct.  That should read decline rate.  I often type faster than I think.

However, typing the wrong word, doesn't change the fact the EROI is everything.  Here we can see that those who have the MENTALITY OF A GNAT still have a say.

GOD HATH A SENSE OF HUMOR...

Karl von Bahnhof's picture

Fugged about it. We dont want this shit here. Underground water reservoirs are much more precious than this.

cynicalskeptic's picture

The question is how much water is still LEFT in the Olgalalla aquifer.... water levels are dropping fast    so at least the 'good' news is that we'll be contaminating LESS water with fracking fluid....

Truth is that the West is screwed when it comes to water with or without fracking - Read 'Cadillac Desert' - written in the 80's.   The real sin is tht we're destroying the water supplies in the Northeast (incuding NYC's reservoirs) in pursuit of a short term limited supply of gas.  Think of what the US did with the North Slope oil - no preparation or switch to renewable energy.  Instead we built big ass pickup trucks and SUV's.

NotApplicable's picture

Contaminating water? Excuse me, but I believe the phrase you're looking for is "aquifer replenishment & rehabilitation."

Please correct yourself in the future.

Shell Game's picture

Flaming faucets, what's not to love?   ;)

NotApplicable's picture

Endless supply of hot water on tap!

neidermeyer's picture

Flaming faucets, what's not to love?   ;)

**********************************

The Gasland MOCKUMENTARY is a fraud ,, these areas have had gas bubbling into the shallow well water for thousands if not millions of years ... the shale deposits being fracked are seperated from the aquifer level by A BUNCH ..

dark pools of soros's picture

ya, animals been dying around there for millions of years.. funny how they stayed there for so long through that eh?

 

or..  the place is turning into a toxic town..   energy companies never destroy environments right?  no history there right?

Kitler's picture

But we will never truly know how much more precious unless we can put both resources on the market at once!

Come on now... aren't you just a little curious to see your morning coffee water boil itself?

McMolotov's picture

"Shell plans to spend more than $400 million to tap into Ukrainian shale."

More bang for their buck if they spent $400 million to tap into Ukrainian females.

Yen Cross's picture

   I'm all in...   Those beautiful Ukranian women!

.

walküre's picture

The late Colonel Muamar Gaddafi clearly had good taste.

pingpongthesecond's picture

Never knew KPMG employed geologists, or did their calculators do all the ground research for them...

W74's picture

Poland has a lot of Coal in the Sileasian portion of the Carpathians and a lot of Amber in alluvial deposits, but other than that it's just farmland, and a few forests.  Nat gas might (might) be under the few remaining swamps, but perhaps it wasn't enough for Exxon.

Rubicon's picture

And what about their silver...?

W74's picture

http://1.bp.blogspot.com/_vrThsGmakQU/TLbfZ4BFvdI/AAAAAAAAAFA/XLv8g0rnZB...

 

Where's the Coal/Nat gas deposits and why?  I wish I had a better map of this.

Whatta's picture

EU can frack themselves.

Diogenes's picture

How about Scotland? Scientists were extracting "rock oil" from Scotch shale deposits before the first oil well was drilled.

hardcleareye's picture

The difference between Shale Oil (which is REALLY CALLED Tight Oil that requires fracking and other "advances") and Oil Bearing Shale...  "sedimentary rock that contains solid hydrocarbons called kerogen (e.g., Green River Formation)," looks more like coal than oil, to get "Shale Oil" NOT TIGHT OIL..... you have to finish "cooking" the rock...... lots of energy and water, not feasible with today's technology, many times more intensive than tar sands.

The MSM has screwed up the usage of the terms.... not your fault.... and there is a world of difference, like calling coal, oil and thinking the two are interchangeable and "one and the same".

See Rapier's explanation on TOD

http://www.theoildrum.com/node/9085

sitenine's picture

Must. Suck. Out. Every. Last. Ounce.

Mr Lennon Hendrix's picture

....Before.  Ponzi.  Collapses.

ReeferMac's picture

I don't see Eurpoeans allowing it w/ all the environmental concerns. Won't happen over there like here. Their politicians can't be bribed the same way their US counterpa... 

HAHAHAHHAA, Almost got it out w/o laughing that time, LOL!