As energy prices continue to rise across Europe and gas prices jumped 26% on Monday after Russia stopped pumping via Nord Stream 1, the highly contentious fracking debate is now re-emerging on the continent, spearheaded by a new British Prime Minister with fossil fuels on their mind.
The European Union – which no longer includes Britain – plans to replace two-thirds of Russian gas imports by the end of the year, although analysts warn the bloc’s best chance of replacing Russian gas imports will fall far short of target.
In 2021, the EU imported around 155 billion cubic meters (bcm) of natural gas from Russia. Unfortunately, the bloc’s proposed gas replacements by the end of 2022 — including LNG (liquefied natural gas) diversification, renewable energy, heating efficiency, pipeline diversification, biomethane, solar roofs and heat pumps — total only about 102 billion cubic meters per year, according to data from the EU’s REPowerEU -Commission.
Fracking advocates believe that Europe’s shale gas potential is needed now more than ever, even though Germany, France, the Netherlands, Scotland and Bulgaria have already banned fracking. Now the debate is being revived by recent moves in the UK.
New British Prime Minister Liz Truss has announced Britain is lifting a moratorium on shale gas fracking for 2019 as the country seeks to increase domestic energy resources and help households and businesses struggling to pay rising energy bills.
The lifting of the fracking ban comes just three years after the government ended its support for fracking after the agency that oversees the oil and gas industry determined that “with current technology, it is not possible to reduce the likelihood of to accurately predict shocks associated with fracking”.
The UK has only two shale gas wells in Lancashire operated by Cuadrilla Resources. Welcoming the lifting of the ban, Francis Egan, CEO of Cuadrilla said: “This is a perfectly sensible decision and recognizes that maximizing the UK’s domestic energy supply is vital as we emerge from the ongoing energy crisis and the risk of one.” want to reduce recurrence the future. Without the tough measures set out today, the UK would be importing more than two-thirds of its gas by the end of the decade, putting the UK public and businesses at further risk of supply shortages and price increases across the board.”
The story goes on
Despite its desperation, the rest of Europe is unlikely to follow — even if the revival of the debate has reignited discussion about how much shale potential Europe has and why it’s not being developed.
shale gas in Europe
It is estimated that Europe has more recoverable shale gas than the US. The only major fracking activity, however, is in Ukraine, which managed to wean itself off Russian gas years ago.
Fracking has long been a controversial issue in Europe, mainly because of the population density. This is not North America.
In 2016, Cuadrilla Resources received approval to frack up to four wells in the UK, ending years of fighting with local authorities. Five years earlier, the company had been forced to halt drilling after the government imposed a year-long moratorium on fracking due to earthquakes caused by a Cuadrilla exploration rig in north-west England. In 2013, the company’s drilling activities were halted again after hundreds of protesters camped out in a tiny south London village, forcing it to abandon its wells.
Meanwhile, in Zurawlow, a town in eastern Poland, protesters successfully blocked a fracking facility in 2012, while Greenpeace activists seized a shale gas drilling rig in Denmark.
Strong public opposition — combined with tax concerns, regulatory delays and weak results from a handful of test wells — drove investors away. Exxon Mobile (NYSE:XOM), rafters (NYSE: CVX) and Total Energies (NYSE:TTE) were forced to abandon projects in Poland after exploration proved disappointing. Poor gas flows also halted progress in Denmark, where Total abandoned shale gas drilling there.
The big problem with fracking in Europe is that some of the conditions that fueled the US shale boom don’t exist in Europe. In most countries, the state, rather than private landowners, owns the mineral rights to oil and gas in the ground. Compare this to the US, where landowner cuts can amount to as much as an eighth of manufacturing revenues. Indeed, this means that fracking does not bring large financial rewards for European landowners.
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To get more public support for the technology, the UK government and some companies have previously proposed direct payments to those affected by fracking. However, environmental groups have strongly opposed this, calling such payments bribes. The situation isn’t helped by the fact that the population density in Europe is more than three times that of the United States, leading to protests that aren’t taking place in my backyard. For example, many rural projects have been rejected in the past because they would move trucks and fracking equipment down scenic Roman-era roads. In fact, Gazprom has previously said that the difficulty of finding uninhabited land in Europe and enough water to exploit shale wells will help Russian gas remain competitive. Even better for Russia: It can produce gas for about one-sixth the break-even cost of British shale oil.
Even after decades of fracking in the US, many Europeans still see the technique as untried.
It will be interesting to see if record high energy prices will finally convince Europeans to change their minds about shale gas fracking. Several European nations have already backed out and returned to burning coal at record levels to keep their power grids alive, breaching their climate targets.
But here’s why environmentalists might still have the upper hand: Studies have shown that while natural gas burns cleaner than coal and has fewer greenhouse gas emissions, the fracking process can negate those benefits. Fracking is dirtier than burning coal, largely due to the direct emission of harmful carbon dioxide and methane, both potent greenhouse gases.
By Alex Kimani for Oilprice.com
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