Monday, April 23, 2012

NYT: Shale Gas Search Divides Romania


BUCHAREST — Romania is set to start exploring its shale gas reserves in a drive for energy independence, despite local protests against the potential risks and Europe-wide concerns about the technology used to exploit unconventional gas sources.

Several oil companies have expressed interest in exploring what is believed to be the country’s significant potential. According to an assessment by the U.S. Energy Information Administration, Romania, Bulgaria and Hungary may together be sitting on top of about 538 billion cubic meters, or 19 trillion cubic feet, of technically recoverable shale gas reserves.

The U.S. energy company Chevron has, since 2010, obtained concessions in Romania, covering a combined area of 870,000 hectares, or 2.2 million acres, in the Eastern plains and the Black Sea coastal region of the country. After surface prospecting, the company is planning to start an exploratory drilling campaign this year.

“Chevron believes that Romania holds potential for a successful project,” Thomas Holst, country manager for the company, said in an interview.

“We are in the early days of activity. No wells have been drilled,” Mr. Holst said: “That is why it is critical to conduct a standard natural gas exploration.”

Chevron’s plans have resulted in protests by environmental advocate organizations and local politicians.

In Barlad, an economically depressed town near the Moldovan border, 2,000 locals gathered in March in a rare demonstration against activities planned in the area. The region’s economy, hit by the loss of heavy industries since the fall of communism in 1989, would benefit from the large investments that shale gas development would bring. According to Romania’s Mineral Resources Agency, for example, exploratory drilling in the Dobroudja region, on the Black Sea Coast, could bring more than $80 million in investment over four years.

But the Barlad protesters said they were worried about the potential effect on the local environment.

In neighboring Bulgaria, Parliament, under pressure from protesters, imposed a ban in January on hydraulic fracturing, or fracking, the technology used to extract gas from shale. The ban caused cancellation of Chevron’s Bulgarian exploration permit.

Romanian environmentalists hope to emulate the Bulgarian example. “We don’t want exploration for shale gas to go ahead, because of the method used, which is the only one available at the moment,” Miruna Ralea, executive director of the environmental group Alma-Ro in Bucharest, said in an interview.

“Fracking is strongly polluting, and, in our view, the risks are by far higher than the benefits,” Ms. Ralea added, citing the dangers of polluting arable land, chemical leaks and the huge use and pollution of water resources.

Romanian activists are not fighting Chevron, they are fighting the government, Ms. Ralea said, lamenting a “lack of transparency and information” on planned exploration programs. Contracts between Chevron and the authorities have been classified as secret, she said.

Alexandru Patruti, head of the mineral resources agency, was not available to answer questions on shale gas operations, despite repeated calls: But in an interview with the local Web site HotNews earlier this month, he said unconventional gas was “a resource that not a single state or company can afford neglecting.”

“We are at the start of a period in which we will study rocks that contain unconventional reserves,” Mr. Patruti said, adding that a study conducted by Romanian researchers was looking at archival geological information to be able to determine where reserves might lie.

Concerning the effect that shale gas operations could have on the environment, Mr. Patruti said, “Exploiting any mineral resource is a process that has an impact on the environment. But this impact can be controlled and minimized by respecting good practices and further regulation of operations being carried out.”

According to Pierre Thomas, professor at the École Normale Supérieure in Lyon, hydraulic fracturing is “relatively secure,” but only if drilling is preceded by expensive studies, and the operation is monitored thoroughly.

Still, “therein lies the problem, considering the very high number of drills, and the fact that companies look to make the most savings possible,” he added.

Aside from the usual effects linked to any industrial activity, Mr. Thomas pointed to the possible contamination of deep aquifers by the chemicals used in the process and to heavy metals liberated during fracking.

In any case, “one day or another, petrol, gas and coal reserves will dry out,” Mr Thomas added. “The race for shale gas pushes this inevitable moment away, but doesn’t help avoid it.” Exploiting shale gas simply postpones the strategic shift to renewable energy, he said.

A report commissioned by the European Parliament in 2011, on the effects of shale gas and shale oil production on the environment and on human health, assessed the risks to the environment and the amount of greenhouse gas emissions, and evaluated the European regulatory framework.

“Whenever exploration and production of unconventional fossil fuels has been done at relevant scale, it has had an effect on the environment,” said Uwe Albrecht, head of the energy and environmental consulting firm Ludwig-Bölkow-Systemtechnik in Germany, one of the authors of the report. “As it generally involves processing significantly larger amounts of material, as well as higher energy and water consumption, the overall impact will be higher than for conventional oil and gas wells.”

The report also showed gaps in existing regulations, like the threshold for Environmental Impact Assessments to be carried out on hydraulic fracturing activities. “At present, the threshold is set far above any potential industrial activities of this kind, and thus they are just not covered by the corresponding regulation,” Mr. Albrecht said.

The 27-nation European Union lacks a unified stance on fracking. Attached to its energy independence from Russia, Poland, for one, has resisted calls for restrictive European legislation on shale gas.

“We understand the concerns related to gas explorations from shale formations in Romania,” said Mr. Holst, of Chevron. Still, he said, not a single case of groundwater contamination had been linked to shale gas production since fracking was first used in the United States on an industrial scale in the 1970s. “As more information will be presented, people will be able to take an informed decision,” he added.

“I believe that the citizens of Romania would want to know if those resources exist in their country,” Mr. Holst said: “It is of strategic importance for Romania to develop energy security.”

Romania has been an oil and natural gas producer since the late 19th century. One of the first refineries in the world started operating in 1856 near the town of Ploiesti, north of the capital. But today, like its neighbors, it depends heavily on imported Russian gas.

In a recent speech, the Romanian president, Traian Basescu, answered critics of shale gas. Citing the United States and Poland, with the largest estimated reserves in Europe, as examples, he urged Romania to reduce its import dependency.

With legislative and local elections coming up this year, the subject has brought heated political debate and revived arguments about other long-stymied international mining projects.

“Romania is seen from abroad as a country where everything is possible, and not without a reason,” Ms. Rulea said, pointing to what she said were blurry links between business and political leaders.

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