Friday, March 23, 2012

Romania sees shale gas as boon despite controversy

By Mihaela Rodina (AFP)

BUCHAREST — Romania is looking to exploit shale gas reserves in a drive for energy self-sufficiency, but critics organising demonstrations on Thursday warn of big risks for the environment.

The US oil group Chevron is one of the firms interested in the opportunity but targeted by protesters who point to controversy in other countries where the so-called "fracking" process of cracking rock at the risk of polluting water has been held up.

"Shale gas definitely represents the future and Romania must determine if such deposits do exist on its territory," Alexandru Patruti, the head of the national agency for mineral resources (NAMR), told AFP.

NAMR is in the early stages of a survey to assess reserves but a study in the United States has estimated joint reserves in Romania, Bulgaria and Hungary at about 538 billion cubic metres.

This puts the reserves among the biggest in eastern Europe and big enough to give Romanian officials ambitions of freeing the country from costly imports from Russian giant Gazprom.

Canadian group Sterling Resources and Hungary's MOL are also interested in exploiting shale gas.

Chevron which has a concession covering 600,000 hectares in the eastern Barlad region plans to drill the first exploration well in the second half of 2012, depending on licensing.

The company also has three concessions in the Dobroudja region, near the Bulgarian border.

"We believe that natural gas from shale rock represents a significant opportunity for Romania", Chevron country manager Thomas Holst told AFP, citing energy security, investment and job creation among the benefits.

"Do we believe there is a high probability that resources exist in that (Barlad) area? Yes," he stressed.

Chevron has yet to choose between three locations before it starts drilling in Barlad, but Holst said it was unwise to name them in order to avoid "undue pressure" on the local community.

The exploration technique, known as hydraulic fracturing or 'fracking', is condemned as dangerous by environmentalists and has been blocked by countries such as France and Bulgaria.

The states of New York and New Jersey have also imposed a drilling moratorium.

'Fracking' uses high pressure injections of water, sand and chemicals to crack open rock and release oil and gas trapped inside.

"There are major risks associated with it, such as ground water contamination, not to mention the high density of wells to be drilled, up to six per square kilometre," Miruna Ralea of environmental group Alma-Ro said.

Other environmental watchdogs such as Greenpeace and WWF have also voiced concerns.

Geology professor Mihai Saramet of Iasi University said that one risk was that the technique could trigger earthquakes. But "risks will gradually be eliminated as technology progresses," he added.

Patruti from NAMR said: "Tapping resources is never an environment-friendly activity but ... we will make sure that all drilling strictly observes environmental laws and EU rules."

Holst said that Chevron was committed to respecting all European Union and Romanian regulations.

"Chevron will use standard techniques to determine if there are resources," he said. If it discovered commercially viable reserves it expected to invest tens of millions of dollars.

But the mayor of Barlad, Constantin Constantinescu, does not want Chevron to drill in fields around the town, putting its 69,000 inhabitants at risk. "As far as I can tell, the negative impact this activity can trigger is far bigger than the pseudo-prosperity the company promises," he said.

Chevron should have started "by telling us 'we want to extract shale gas, this can have a negative impact on the environment, pollution can occur, but we are ready to deal with it'," he said.

Instead, in the absence of public debate, "local people now think Chevron will devastate the region," he added.

About 2,000 of them are expected to turn out at a rally organised in Barlad on Thursday by Constantinescu and his Social-Democrat Party (PSD, opposition).

Similar protests are to be staged simultaneously in several cities, including Bucharest, by environmental groups.

Holst said: "When the facts are known, the citizens will agree that, if there are commercial resources, the benefits will far outweigh the risks."

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