There's no doubt predictions like that from the US Energy Information Agency (EIA) that the development of shale gas could potentially lead the US to become a net exporter of liquefied natural gas (LNG) by 2016, has Emerging European states, cowed by their overwhelming dependency on Russia for gas imports, salivating at the prospects for such production in their backyards. Yet while the consultancy KPMG argues in a June report that shale gas development in the region is "inevitable", it admits the industry won't be able to mirror the success of that in the US for a number of reasons.
First, there simply isn't the same level of reserves of unconventional gas – hard-to-get-at deposits of tight and shale gas, as well as coal-bed methane – as in the US. Preliminary studies suggest that there are more than 650 shale formations worldwide, in 142 basins. This amounts to 456 trillion cubic metres (cm) of shale gas, of which 40% is estimated to be economically recoverable. Geographically, the US and CIS countries are estimated to account for nearly 60% of available shale gas resources worldwide. Europe, however, accounts for a much lower 7% of global shale gas reserves. Poland has the largest reserves in Europe, with technically recoverable shale gas resources put at 5.3 trillion cm of gas.
KPMG also notes that while shale formations in the US are spread over a large basin area, within which mining developments have concentrated on a number of "sweet spots", Europe is more densely populated and a similar style of development to the US would bring drilling rigs closer to inhabited areas. The lack of free land for drilling stations might become yet another issue for European shale gas developments. Furthermore, known reserves of shale gas in Europe are located 1.5 times deeper on average than similar formations in the US, which might raise a problem of increased temperatures. "In some areas of Europe, the geothermal gradient is very high: for every 15-20 metres of drilling depth, the temperature rises by 1 degree Celsius (as compared to the worldwide average of around 33 metres)," KPMG says.
The European regulatory stance towards the development of shale gas resources also varies greatly. Bulgaria and France banned exploration earlier this year, and on May 7 the Czech environment ministry put a two-year moratorium on shale gas exploration licenses until new legislation to oversee the process is put in place. "US legislation regarding land and mineral rights has played a major role in spurring the development of shale gas there... Rights to natural land and their soil minerals are generally granted to the land owner... This is a major difference as compared to the permitting process of EU member states, where land ownership does not grant the automatic ownership of underlying minerals, as every ground resource, unless legally specified, is owned by the state."
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