BLACK SEA BLOG: Shale'acked in Bulgaria

By bne IntelliNews January 27, 2012

Sandy Gill in Sofia -

With shale gas a controversial topic in and beyond Europe, Bulgaria has made up its mind rather abruptly which side of the argument it's on – at least for now.

Events in January saw, in quick succession, reversal of a cabinet decision to award the US giant Chevron the right to explore in a shale-rich area of northeast Bulgaria and a parliamentary vote to ban the use of the controversial hydraulic fracturing (or "fracking") method in shale exploration and extraction.

The stakes could be high. In the lead-up to the tender that Chevron won last June for the 4,400 square kilometre Novi Pazar field, contenders mentioned potential reserves of between 300bn cubic metres (cm) and 1 trillion cm of shale gas in the area. The amount won't be known till exploration has taken place, while commercially viable reserves are normally only a fraction of potential – the rule of thumb is 10% – but these are heady figures for a country that, at present, consumes between 3bn and 3.5bn cm of natural gas per year. And a tempting prospect, given that said country is trying to move away from a worrying dependence (currently around 90%) on Russian gas.

But feelings have run high too, with environmentalists, concerned residents, leftist and nationalist politicians, and – supporters of shale gas would accuse – well-financed friends of Russia's Gazprom combining in an increasingly vocal alliance.

Shale gas development is risky, these critics say, and especially risky in northeastern Bulgaria. It's an area which is heavily reliant on underground water, opponents point out, and woe betide Bulgaria if the nasty chemicals used in fracking get into that. It's also Bulgaria's best farmland, so polluting it – also a risk, they say – would be criminal. Fracking uses a lot of water, and the forecast is that Bulgarian will have less and less of that in the coming decades. Moreover, the northeast is an earthquake-prone region, so it's not wise to play around with the seismically dubious high pressures used in shale gas fracking.

A fracking mess

The centre-right government of Prime Minister Boiko Borisov has been on the back foot since its decision in favour of Chevron. A contract was to have been signed within a month, but was repeatedly delayed. Borisov and his ministers gave reassurances that the government would allow nothing risky to happen, that this was only exploration, and that an environmental impact assessment (EIA) would be carried out before anything as radical as extraction took place. But opponents weren't reassured, especially when Chevron indicated – apparently to the government's surprise – that it proposed to use fracking in two wells it planned to drill at a late stage of exploration.

Things came to a head in January. Thousands took part in anti-shale demonstrations in Sofia and 11 other Bulgarian towns from January 14. Non-governmental parties competed in drafting laws and resolutions: the extreme nationalist Ataka has called for a 20-year moratorium on shale exploration and production, the former communist Bulgarian Socialist Party is for a permanent ban in the form of a law. The governing party GERB – that's the Bulgarian acronym for "Citizens for the European Development of Bulgaria" – opted for something a lot less radical: on January 16, its MPs voted in a moratorium until such time as appropriate legal amendments could be brought in, specifically requiring EIAs for exploratory drillings for shale, not just production as at present. Not much of a moratorium, said protestors: those amendments had passed first reading in December!

Then, a turnabout. Always rather sensitive to public opinion, Borisov excelled himself at a cabinet meeting on January 17, where he insisted on radical modification of the cabinet's June decision in favour of Chevron. Briefly summarised from the transcript posted on the cabinet's website, his reasoning was: people are afraid and don't want this, so let's not do it; when they are convinced, we can reverse our decision. Meanwhile, the cabinet decreed, Chevron can explore – but only for conventional oil and gas. And Borisov's hapless energy minister, Traicho Traikov, was instructed to lead the public debate on the subject that, the premier admitted, had been missing so far.

And, the same day, instructions went out to GERB's parliamentary group to throw their weight behind an outright ban, which was voted through parliament on January 18, complete with €50m penalties for companies infringing it by using fracking methods. Only a few MPs from the right-wing Blue Coalition opposed the motion: obedient as ever to their strongman leader, all GERB MPs present voted for it, barring one abstention.

Ill-advised? Certainly, a rather categorical decision was taken hastily, without formally consulting such expert organisations as the Bulgarian Academy of Sciences or the Geological and Mining Institute. Certainly, too, there's a lot of expert opinion that would contest the anti-shale arguments.


Bulgaria, experts point out, has used fracking in conventional oil and gas extraction since the 1960s (though admittedly not at such high pressure as would be used on shale). Shale is found at much greater depths than the water table (3,000-3,500 metres as against 1,000 metres), with solid rock in between, so there's little danger of pollution. Drilling through the water table is in itself no problem: that's already been done with 200 wells in the northeast, for conventional oil and gas. The chemicals used in fracking are, for the most part, so harmless that they are also used in household detergents. Since Bulgaria shares its underground water with Romania, a Bulgarian ban would make sense only if Romania follows suit – of which there's no sign. And, say the friends of shale, fracking horror stories from the US are mostly explicable by poor drilling discipline and under-regulation.

Well, perhaps. At a minimum, there's a lot of persuasion still to be done. But, if the jury's still out, it's fair to say that Borisov and his loyalists have rather rushed to judgement. Chevron wasn't proposing to drill its two wells (or do any fracking) until 2015 – its work till then would just have involved seismic tests.

By then, a good deal more will be known. There'll be experience from Poland, which is pushing ahead boldly with shale gas exploration. There'll be a decision on shale from the European Commission, due by end-2012. Further down the line there will be a definitive report from the US Environmental Protection Agency.

So why an outright ban now? Politics rather than statesmanship is probably the answer. Such decisions are not as easily reversible as Borisov imagines. Nor, perhaps, will be the effect on Chevron. The US giant hasn't yet said much publicly except that it hopes to persuade Bulgarians of the virtues of shale. That's intelligible diplomacy short term. How patient it will be in the medium term remains to be seen.

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