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Pressure on Europe over shale gas

Wednesday, Mar 13, 2013 - 02:56

March 13 - Shell has a deal with Ukraine but the shale gas revolution hasn't really taken off in Europe. As the economic benefits of cheap energy help the States Joel Flynn looks at whether the continent may soon be forced to give in to the pressure.

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The U.S. can't get enough of it, China's scrambling to get its hands on it. But Europe's stuck at first base. Shale gas maybe the new energy revolution but Europe still hasn't made up its mind. Poyry Senior Director, Matt Brown, says it's time they did. SOUNDBITE: Poyry Senior Director, Matt Brown, saying (English): "I think it's very important that Europe keeps up in the shale gas boom. It's something that's a policy objective; energy, security of supply for Europe as a whole and for each of the countries in Europe. So it's vital. It protects us against the possibility of future volatile gas prices, high gas prices." Extracting shale gas involves fracking: Vast quantities of water and chemicals are pumped at high pressure deep into the ground to open shale rocks. Opponents say it can trigger tremors and pollute groundwater. Demonstrations like this one in Ukraine where Shell recently signed a $10 billion deal are typical. (SOUNDBITE)(Ukrainian) OPPOSITION NATIONALIST PARTY DEPUTY IRYNA SEKH, SAYING: "They're trying to con us. Ukraine is treated like a third world country - no one pays any attention to the rules or the environment." So what does the shale landscape look like in Europe? Well according to a U.S. study, its got a decent amount of the stuff underground -- the problem's getting it out in a crowded continent. France has a huge amount of of shale gas -- five trillion cubic metres. But they banned the practice in 2011 over pollution concerns, that's despite importing 98% of their gas. The UK has a tenth of that, and says exploration will take years. So could Poland become the shale gas powerhouse of Europe? It has more than France. Well it did until most of it was found to be unrecoverable. Shell's deal with Ukraine is the biggest investment so far in "unconventional" gas. Graham Tiley is helping lead its operations there. SOUNDBITE: Shell Ukraine exploration and production vice president, Graham Tiley, saying: "Shell believes that Ukraine has the potential to increase its domestic production. It's absolutely clear. We believe, this project can be very attractive for us and for Ukraine." ExxonMobil, Chevron and TransAtlantic Petroleum are all working on European deals. Simple economics says that the continent may make the opportunities irresistible. SOUNDBITE: Poyry Senior Director, Matt Brown, saying (English): "What we've seen in the U.S. is low prices for gas, for natural gas, as a result of the shale gas boom. The analysis that we've done at Poyry suggests that there won't be a significant price drop but it could protect us against future high prices." Gas prices in Germany are now three times higher than the U.S. and the advantages aren't just economic. U.S. officials say the they've had the lowest carbon dioxide emissions for 20 years. And Shell says by 2030 gas, not oil, will be the world's main source of energy, and much of it will be shale.

Pressure on Europe over shale gas

Wednesday, Mar 13, 2013 - 02:56

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