Poland - Energy
Exploration and production of the European shale gas reserves have been shelved since 2015. But with the US now among the world's largest gas exporters thanks to the shale gas revolution, by 2023 European leaders were debating whether their respective countries should change their shale gas policies and plans. About 70% of LNG imported into Poland from the US was from shale.
According to a 2013 study by Germany's Federal Institute for Geosciences and Natural Resources (BGR), there are an estimated 14 trillion cubic meters (tcm) of technically recoverable shale gas reserves in Europe. Poland and France have the largest estimated shale gas resources in the region. The study, based on data from the US Energy Information Administration, said shale gas reserves amount to 4.2 trillion cubic meters in Poland and 3.9 trillion cubic meters in France. Romania had 1.4 trillion cubic meters, Denmark has 900 billion cubic meters and Germany is estimated to have a reserve of 500 billion cubic meters.
The increase in natural gas prices, coupled with the fact that extracting natural gas is more affordable than supplying it from other countries, have once again brought the shale gas option to the fore. An analysis of the potential of shale gas in Poland carried out a few years ago. The technical resources are significant, but the economically recoverable resources were significantly limited, given the gas prices at that time. Gas prices are now significantly higher which could potentially create a sensible business model for shale gas production in Poland.
After initial interest, strong public opposition, as well as tax concerns, regulatory delays and poor output from a handful of test wells, drove away investors. Exxon Mobil, Chevron and TotalEnergies abandoned projects in Poland after exploration proved disappointing. The main reason for this disaffection is not to be found in the geological conditions of the Polish shale deposits, but in the absence of a coherent policy on the part of the Donald Tusk and then Ewa Kopacz PO-PSL coalition governments.
In August 2012, 111 concessions had been issued for exploratory shale gas drilling. The Polish state gas company PGNiG was one of the beneficiaries alongside foreign companies. The first drilling was positive, and in July 2013, a subsidiary of American ConocoPhillips began for the first time to extract shale gas near Lebork. ConocoPhillips said its unit Lane Energy Poland invested around $220 million (€196 million) in Poland, drilling seven wells over its three Western Baltic concessions.
Shale gas is extracted via a combination of hydraulic fracturing and horizontal drilling, which has been criticized for its damage to the environment by contaminating ground and surface water. But technology has improved and drilling costs, one of the key factors behind the pullout of US firms, have come down, plus higher gas prices, all make shale gas worth reevaluating.
But shale gas in Poland and elsewhere in Europe would not be as cheap as it is in the US due to different geology. Public acceptance of the technology remains very low because of its environmental impact. Analysts also say shale gas isn't going to address the current energy crisis given that the development of projects will take years to be realized.
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