EUCERS together with the Foreign and Commonwealth Office hosted a round table in mid March asking whether shale gas, a type of fuel which exists in less porous rocks than conventional gas, could be a game changer in Europe.
The United States of America is already spearheading a “gas revolution” following a large-scale development of shale gas explorations in recent years.
As a result, the natural gas share is tipped to double to 40% of the country’s overall energy needs by 2040, according to a study released by the Massachusetts Institute of Technology last May.
The question which business leaders, politicians and academics are now keen to answer is whether the US shale gas success could be replicated in Europe where countries such as Poland, Germany, Sweden, Hungary and Romania are thought to sit on important resources.
The large event turnout and the number of speakers whose background ranged from scientists to representatives of high-profile energy companies, solicitors, consultants and scholars showed the level of interest in the subject.
Participants and members of the audience agreed that the potential exploitation of shale gas resources in Europe would help the continent to reduce its dependence on suppliers such Russia, Norway or Algeria and therefore become less susceptible to politically motivated energy crises.
But shale gas could not only help Europe to wean itself off traditional suppliers, but also turn countries which have so far have been net importers of natural gas into exporters
The total recoverable reserves in Europe fall between 33 and 38 trillion cubic metres (tcm) according to details quoted in a strategy paper by EUCERS.
Speakers pointed out that although it was premature to quote figures related to costs and potential margins as the European exploration process is yet to take off, the US example shows that it is profitable to explore shale gas.
The break-even point to exploit the resources in the US ranges between $3.50/million cubic feet – $7/million cubic feet, according to the same EUCERS strategy paper.
But there are also drawbacks.
The environmental risks linked to drilling which involves the use of water and chemical substances to fracture gas-rich rocks could lead not only to the contamination of the environment and the release of methane into the atmosphere, but also put pressure on scarcely available water resources.
ExxonMobil which are involved in shale gas explorations in Poland told the audience they were keen to ensure a high-level of transparency to update the public on the actions taken at every stage of exploration.
On the other hand, a member of the academia pointed out that Europe was unlikely to become competitive in terms of commercialising shale gas resources as the existing EU legal framework would prevent the free and easy flow of volumes between different points across the continent.
He said the current lack of harmonisation between the national transmission system operators (TSOs) effectively blocks traders from buying natural gas at certain hubs and shipping it across to other points to cover demand hotspots.
Other speakers briefly hinted at the geopolitical implications of shale gas. If the resource were to become commercially viable in Europe, Central Asian volumes currently seen as a viable alternative to Russian gas could be snapped up by China.
The EUCERS strategy paper prepared for the event was circulated to all attendees who were kindly required to add their comments, thoughts or details and resubmit it to the centre for publication.