Friday, November 30, 2012

Romanian election heralds hard choices on shale gas

By Ioana Patran
BUCHAREST, Nov 29 (Reuters) - Romania is among the best placed of Europe's ex-communist countries dreaming of escape from reliance on Russian gas, as its newly accessible shale deposits place self-sufficiency within its grasp.
The obstacle, as elsewhere, stems from fears that extracting gas from shale will pollute water for drinking and farms.
U.S. energy major Chevron wants to start drilling for shale gas exploration near the town of Barlad and campaigners have organised protests ahead of elections on Dec. 9, demanding a nationwide ban.
The current moratorium on shale exploration could be lifted when voter pressure subsides after the vote.
But the Social Liberal Union (USL) of leftist Prime Minister Victor Ponta, which will probably form the next government, has yet to make its shale policy clear and the future is up in the air.
Other political groupings have also refrained from unveiling their plans on the issue for fear of alienating voters.
"A decision would need to be made eventually. We hope this decision will not be one to endorse this activity and technology," said Bogdan Grecescu from Greenpeace Romania.
Activists hope all Chevron's exploration rights will be annulled if they can secure an overwhelming majority against shale gas in a non-binding referendum in the Black Sea town of Mangalia, coinciding with next week's national elections.
Chevron has exploration rights for three blocks of 670,000 acres (270,000 hectares) near the Black Sea, and has also bought a 1.6 million acre concession close to Barlad for an undisclosed amount.
Hydraulic fracturing or fracking to extract shale gas involves injecting water and chemicals at high pressure into underground rock formations.
Experts say that if it is done according to best practice it is environmentally safe, but the technology still evokes much public concern.
The strength of feeling in Barlad is demonstrated by Neculai Rotaru, a retired army general and anti-shale activist, who said he did not care that the company proposing to carry out the exploration was from the United States or anywhere else, nobody should do it.
"It is a criminal method as it leaves the environment deeply affected, infected and contaminated," Rotaru said.
Romania's considerable conventional gas reserves mean it only imports only about a quarter of the gas it uses.
Exxon Mobil and Austrian OMV's Petrom have discovered what could be up to 84 billion cubic metres (bcm) of conventional gas in an offshore Black Sea well, but these big finds stand to be dwarfed by shale gas.
Analysts say that Romania's shale gas deposits, added to its conventional reserves, could make it self-reliant in gas use.
"Adding the shale gas reserves, Romania may actually cover all the internal demand from its own sources," said Otilia Simkova, an analyst at consultancy firm Eurasia Group.
The U.S. Energy Information Administration (EIA) estimates Romania and neighbouring Bulgaria and Hungary could have 538 bcm of shale gas between them, slightly more than Europe's annual consumption and enough to cover Romania's own for almost 40 years.
In the United States, fracking has revolutionised the energy sector, bringing a drop in domestic power and gas prices, but environmental risks and denser population have made Europeans more cautious.
The European Parliament rejected a ban on shale gas on Nov. 21 and asked for a robust regulatory regime to address environmental concerns. The European Commission, the EU executive, is expected to come up with a framework for managing risks next year.
In the meantime, European Union countries are finding their own way.
Poland is Europe's most ambitious advocate of shale and, although it slashed expected reserves this year by 90 percent, it is pushing to start production to limit dependence on Russia's Gazprom, which supplies 75 percent of the gas it consumes.
Among other formerly communist EU countries, Bulgaria has yielded to protests and halted shale exploration.
Exploration is on hold in the Czech Republic due to environmental concerns, while in Slovakia extraction could be limited due to considerations regarding water tables around the Danube, where some shale reserves are thought to exist.
Both countries are completely dependent on gas imports, largely from Russia.

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