Ukraine crisis sharpens focus on European shale gas

LONDON, March 14 Fri Mar 14, 2014 11:26am EDT

LONDON, March 14 (Reuters) - Ukraine's crisis underscores the importance of Europe's drive for greater energy security and could buoy development of shale gas as the continent looks to cut back on Russian supplies.

As tensions between Moscow and Kiev spark concerns over a possible cut in Russian gas to Europe via Ukraine, European Union officials this week identified shale gas drilling as one of the "indigenous sources of energy" that can help reduce such imports.

Significantly, EU politicians left shale out of tougher rules on exposing the environmental impact of oil and conventional gas.

Poland also introduced an investor-friendly shale gas bill aimed at cutting red tape and regulatory hurdles.

"I expect that as a result of the Ukraine crisis, the EU is going to look much more seriously at ways of diversifying away from Russian energy sources," said John Lough, associate fellow at London think-tank Chatham House.

"Shale gas will be one of the options to be explored."

Britain and Poland have for years pressed for shale gas development to help lessen their dependence on imported fossil fuels.

Development there, and in countries such as France and Bulgaria, has faced opposition, however, from citizens and groups concerned about the potential environmental impact.

Supporters include energy-intensive industries who fear that cheaper energy available to U.S. companies from the shale gas boom there will render Europe's manufacturers uncompetitive.

"Given the absolute necessity for Europe to diversify its sources of supply of gas and to find solutions to the huge energy price differential with its main competitors, we see no alternative but to proceed as rapidly as possible with shale gas exploitation as part of the energy mix in Europe," said Gordon Moffat, director general of steel industry group Eurofer.

Such pleas could gain support as the argument shifts to one over energy security, as Brussels grapples with the fact the EU opposes Russia's seizure of Ukrainian territory yet remains dependent on Russian gas.

Should Russia's seizure of Crimea include a takeover offshore gasfields, Ukraine's best remaining sources of new energy will be its two large, untapped shale finds.

Ukraine has Europe's third-largest shale gas reserves at 42 trillion cubic feet (1.2 trillion cubic metres), according to the U.S. Energy Information Administration.

Kiev has signed a deal with Chevron to develop the Olesska block in western Ukraine and one with Royal Dutch Shell to develop its Yuzivska field in the east.

"Unrest in any part of the world related to oil and gas production and transport argues in favour of long-term diversity of supply," said the International Association of Oil and Gas Producers.

Thus far, Europe's hoped-for shale boom has struggled, with estimates of Poland's reserves slashed, public unease holding up British plans, and outright bans in France and Bulgaria.

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Comments (1)
Igor90000009 wrote:
As the folks at Nike would say, JUST DO IT!

Seriously, this is what Russia doesn’t want. It and OPEC have been advertizing oil shale is bad. It is no more environmentally bad than conventional Oil and Gas Drilling. Plus it creates HUGE numbers of great paying jobs. And what does the world need now? More JOBS!!!!

People wake up! Stop sending money to Russia and OPEC countries and start exploiting this resource and enriching your countries!

Ukraine is the wake up call! Russia does not want Ukraine to frack because as soon as other countries see it, they would have gone to it.

Russia is INVADING to try and squash the idea of Fracking, in order to maintain it’s oil dominance!

Folks I’ve Fracked oil wells. It is safe AND environmentally sound drilling technology! Reason Russia is against it is because it will RUIN THEIR ECONOMY!!!!!!!!!!!!!!!!

But that said, starting a war based on false pretenses is IMMORAL AND ILLEGAL! UN, NATO, USA must NOT allow this to occur and if it means COLD OR HOT WAR, then this is what it is!

Crimea? It was semi-government that IS not legally capable of separating from Ukraine, but is easier for Russia to take.

Eastern Ukraine is the checkmate to HOT WAR. Crimea can be recoiled later after inhabitants realize they made a mistake. Let it go, let them suffer, they will come back after they realize EU is about to chop Russia’s balls off!

But full scale invasion? That is different and it will get bloody. But it may be the medicine Ukraine needs to finally free itself of the evil neighbor.

Mar 14, 2014 12:05pm EDT  --  Report as abuse
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