The European Union, which no longer includes the UK, plans to replace two-thirds of Russian gas imports by the end of the year, although analysts warn that the bloc’s best chance to replace Russian gas imports will be well below the target.
In 2021, the EU imported around 155 billion cubic meters (bcm) of natural gas from Russia. Unfortunately, the gas replacements proposed by the blockade by the end of 2022, which include LNG (liquefied natural gas) diversification, renewable energy, heating efficiency, pipeline diversification, biomethane, solar roofs and heat pumps, amount to only about 102 billion cubic meters per year, according to data from the REPowerEU of the European Commission.
Proponents of fracking argue that the potential of shale gas in Europe is now more needed than ever, although Germany, France, the Netherlands, Scotland and Bulgaria have all previously banned fracking. Now, the debate is being revived by recent moves in the UK.
New UK Prime Minister Liz Truss has announced that the UK is lifting a 2019 moratorium on shale gas fracking as the country seeks to increase domestic energy resources and help families 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 oil and gas industry regulator ruled that “It is not possible with current technology to accurately predict the likelihood of tremors associated with fracking. ”
Britain has only two shale gas wells in Lancashire operated by Cuadrilla resources. Cuadrilla CEO Francis Egan welcomed the lifting of the ban, saying: “This is a completely sensible decision and recognizes that maximizing the UK’s domestic energy supply is key if we are to overcome the ongoing energy crisis and reduce the risk of it happening again in the future. Without the strong measures set out today, the UK would have had to import over two-thirds of its gas by the end of the decade, exposing the public and UK businesses to an additional risk of supply shortages and price increases across the board.. ”
Despite its desperation, the rest of Europe is unlikely to follow, even as the revival of the debate has reignited the talk about how much shale potential Europe has and why it is not being exploited.
Shale gas in Europe
Europe has more recoverable shale gas than the United States, according to estimates. However, the only major fracking activity is in Ukraine, which managed to break away from Russian gas years ago.
Fracking in Europe has long been a controversial issue due to population density, largely. This is not North America.
In 2016, Cuadrilla Resources obtained permission to break up to four wells in the UK, ending long battles with local authorities. Five years earlier, the company had been forced to stop drilling after the government imposed a one-year moratorium on fracking due to the aftershocks caused by a Cuadrilla exploration platform in northwestern England. In 2013, the company’s drilling activity was again halted after hundreds of protesters encamped in a tiny village south of London and forced it to abandon its wells.
Meanwhile, in 2012, protesters in Zurawlow, a city in eastern Poland, successfully blocked a fracking site as Greenpeace activists occupied a shale gas platform in Denmark.
Strong public opposition, coupled with fiscal concerns, regulatory delays, and poor performance from a handful of test pits, has turned investors away. Exxon Mobile (NYSE: XOM), Chevron (NYSE: CVX) e Total Energies (NYSE: TTE) were forced to abandon projects in Poland after exploration proved disappointing. Scarce gas flows also halted progress in Denmark, where Total ditching shale gas drilled.
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, not private landowners, owns the mineral rights to underground oil and gas. Compare that to the United States, where the landowner cut can be as high as one-eighth of manufacturing income. This in effect means that fracking does not produce 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 people affected by fracking. However, environmental groups have strongly opposed the move, calling such payments as bribes. The situation is not helped by the fact that the population density in Europe is more than 3 times that of the United States, fueling the “not in my backyard” protests. For example, many rural projects in the past have been turned down because they would have brought trucks and equipment used for fracking on picturesque roads dating back to Roman times. Indeed, Gazprom previously said that the difficulty in 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.
Even after decades of fracking in the United States, many Europeans still consider the technique untested.
It will be interesting to see if record energy prices finally persuade Europeans to change their minds about shale gas fracking. Several European nations have already backtracked and returned to burning coal at record levels to keep their electricity grids alive, thus reneging on their climate goals.
But here’s why conservationists might still be up to it: Studies have shown that although natural gas burns cleaner than coal and has reduced greenhouse gas emissions, the fracking process can nullify these benefits. Fracking is dirtier than burning coal mainly due to the direct emission of harmful carbon dioxide and methane, both of which are powerful greenhouse gases.
By Alex Kimani for Oilparmi
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