Shale gas will not cut EU import dependence: study

BRUSSELS Fri Sep 7, 2012 4:17pm BST

Related Topics

BRUSSELS (Reuters) - European development of shale gas could offset the decline in its conventional gas output but will do nothing to reduce the continent's dependence on imports, a European Commission study has found.

In the United States, a boom in production of cheap shale gas in recent years has pushed down energy prices and cut greenhouse gas emissions, prompting calls from industry for Europe and others to follow suit.

But investors say the U.S. shale gas revolution is unlikely to be repeated in Europe, due largely to environmental concerns and different rules on land and resource ownership. Some EU countries have even banned shale gas exploitation.

"Shale gas production will not make Europe self-sufficient in natural gas," the report by the EU executive's Joint Research Centre said.

"The best-case scenario for shale gas development in Europe is one in which declining conventional production can be replaced, and import dependence maintained at a level around 60 percent."

The authors said the best current estimate of technically recoverable volumes of shale gas are 16 trillion cubic meters (Tcm) in Europe, 20 Tcm in the United States and 21 Tcm in China, compared with about 200 Tcm globally.

"The USA and China are well placed to become the top producers of shale gas," the authors said, adding that significant production is likely in most other regions.

If conditions favor shale gas production, natural gas could account for 35 percent of global primary energy supply by 2040, surpassing oil as the world's number one source of energy.

ENVIRONMENTAL RISKS

A separate report for the Commission warned of the potential environmental risks posed by fracking, the process used to extract gas from shale formations thousands of meters below the earth's surface by injecting chemicals and water at high pressure.

"Risks of surface and ground water contamination, water resource depletion, air and noise emissions, land take, disturbance to biodiversity and impacts related to traffic are deemed to be high in the case of cumulative projects," said a Commission statement based on the study's findings.

The authors urged the Commission to consider the "gaps, possible inadequacies and uncertainties identified in the current EU legislative framework".

Earlier this year, EU energy chief Guenther Oettinger said current European legislation was adequate to regulate shale gas exploration, but changes may be needed to protect the environment once Europe enters the production phase.

Britain and Poland are currently the only EU countries to have used fracking for shale gas extraction, but close to half of the bloc's 27 member states have expressed an interest in developing shale gas resources, the study found.

Bulgaria and France have banned shale gas activity due to environmental concerns.

(Reporting by Charlie Dunmore)

FILED UNDER: