Shale Gas: A Game Changer

By Paula Iwaniuk
posted on June 30, 2013 in Diplomacy, Economics and Finance, Global Development

Shale gas has the potential to be a game-changer. As we enter the ‘Golden Era of Gas’, could it address the EU’s energy and climate goals by providing solutions for security of supply, economic competitiveness and climate goals? Or do supposed vast reserves in Poland pose more questions than answers?

A Trilemma for the EU

Shale gas creates a trilemma of sorts for the EU. The US has begun to encroach on what seems to be the golden path of gas, decreasing its greenhouse gas emissions, securing its energy supply and providing customers with lower energy prices.

Within the European Union, there was also particular excitement regarding the release of a study in 2011 by the US Energy Information Administration that forecast an estimated 5.3 trillion cubic metres of shale gas reserves in Poland; enough to cover predicted demand for an estimated 300 years.

Today, as those figures have decreased and exploration has come up short with commercially viable wells, the debate over shale gas continues with less enthusiasm and optimism.

Polish Potential

Robin Miègem, Director at DG Environment recently stated during Green Week 2013 that the Commission’s ultimate goal is to ensure the proper framework for shale gas exploration, reassuring citizens of its safety and maintaining the EU commitment to de-carbonization and resource efficiency.

Poland has the second largest potential of shale gas reserves in Europe, but in the past year energy companies such as ExxonMobil, Talisman Energy and Marathon have sold their Polish exploration permits citing difficult and overlapping regulations, alongside disappointing exploration results.

Nevertheless, shale gas reserves create an opportunity for the EU to become less dependent on third country suppliers such as Russia, whilst diversifying the energy mix within member states. If the stumbling blocks can be overcome. this could provide a solution to the security of supply dilemma that has plagued Europe for decades.

Following a recent stakeholder consultation on the extraction of shale gas, the European Commission is currently debating the next steps to take regarding potential legislation. However, the debate is not only external; it is an internal one within the executive. Whilst DG Energy wants more shale, DG Climate wants more renewables and renewable technology to be available rather than investing in a cleaner fossil fuel.

Opposition from a number of organisations, and member states such as France and Bulgaria have also held up the issue. This polarising issue is clearly exposing the need to reconcile the environmental and population impacts of fracking. It could be argued that if these aren’t resolved, energy companies will bypass Europe altogether, leaving us worse off.

Whilst the EU is a bit far from being able to rely on shale gas in the same way the US has been able to, slowly but surely steps are being taken to ensure that a framework is put in place for secure and safe extraction. Perhaps the golden arches of the golden era of gas are not so far from our reach?