In Poland, Shale Gas Fuels Dreams Of Energy Independence
Polish authorities are giving an enthusiastic thumbs-up to shale gas, a controversial yet potentially lucrative source of fuel that could free the country from relying on historical rival Russia for its gas needs.
WARSAW - Ask any Polish person about what might be hiding below the country's surface and may trigger a euphoric reaction. Some are talking about an El Dorado. Others are dreaming of enough wealth to fund a Norwegian-style development boom.
The frenzy is not about gold, diamonds or oil, but about gas – shale gas to be precise. According to some estimates, Poland may be sitting on one of Europe's largest deposits of the trendy but controversial fuel source.
So far Poland is still in an exploratory phase. But the government, led by Prime Minister Donald Tusk, and the companies involved in gas exploration are already gushing with enthusiasm. For now, the growing environmental questions don't seem to be a concern for Polish leaders. Nor are they particularly fazed by France's current moratorium on shale gas.
Celebrated by some as an exciting new source of relatively clean fuel, shale gas – natural gas produced from shale rock – also has its detractors. Environmental groups warn that shale gas contributes more to global warming than does conventional natural gas. The extraction process can also lead to groundwater contamination, say critics.
The U.S. Energy Information Administration (EIA) estimates Poland's reserves at some 5.3 trillion cubic meters, but this highly optimistic figure appears to be based on a geological simulation. Other estimations put the reserves at just 1 billion cubic meters. A precise figure will likely take a few more years to emerge. This gives companies that have already obtained exploration licences time to decide on the technological means they intend to use during the industrial phase.
The stakes are enormous for Poland. Shale gas could allow the central European country to become a net exporter of energy and break free of its dependence on Russian natural gas (the Russian Gazprom company covers 70% of Poland's needs). The revenue obtained from a shale gas industry could finance new infrastructure projects. Shale gas could also help the country gain more geopolitical weight.
Poland is not the only country in the European Union to be tempted by the promises of shale gas. Lithuania's total dependence on Russia, triggered by the closing of the Ignalina nuclear plant in 2009, is pushing the small Baltic country towards shale gas exploration as well.
"Shale gas has become a hope, a symbol of development, of energy security," explains Iwo Los from Greenpeace in Poland. "Every one of the candidates in last year's presidential election spoke about it. But no one mentions the lack of information about potential dangers, or the fact that the government has been handing out licences to foreign companies."
Most of the companies involved are American: Chevron, ExxonMobil, Lane Energy, and others. Total, a French company, is partnering with ExxonMobil for two concessions in southeast Poland's Lublin Basin. A Polish corporation called PGNiG is also involved in exploration. "We have already drilled in two places, going more than three kilometers underground," says Joanna Zakrzewska, a PGNiG spokesperson. "Drills are very expensive, each costing between 20 and 30 million zlotys (5 to 8 million dollars). But we consider this an enormous opportunity."
The dominant role being played by foreign companies has drawn criticisms from some sectors in Poland. A total of 80 concessions have been awarded, each measuring on average 1,000 square kilometers, with a geological and mining law now being considered by Parliament stipulating that these concessions are permanent. "A quarter of the Polish territory has been given to these companies," says Zbigniew Tynenski, head of the Center for Sustainable Development in Lodz. "Here we have a neo-colonial situation."
Prime Minister Donald Tusk dismisses such criticism as unfounded. He also complains about how France and other European countries "lobby" against shale gas. "The risks for the environment depend on what kind of techniques you are using," says Michal Boni, a member of the council of ministers and one of Mr. Tusk's closest advisers. "There is no point in talking about it at this stage."
How high is the price Poland is willing to pay for its energy independence? "Our country is catching up with the rest of Europe," says Boni. "If we had to choose between building highways and protecting the environment, I would personally chose the highways, and try to minimize any negative impact at the same time. Of course we take the environmental aspect into consideration, but we have to think about what a balanced development would mean to us."
Before moving into the extraction phase, the government must first draft new laws to regulate the industry and determine, among other things, how future revenue will be spent. "If we banned the exploration of new deposits for fear of extracting them it would be like going back to the Middle Ages," says Jerzy Nawrocki, director of the government-linked Polish Geological Institute. "We should not generalize the risks posed to the environment. Geological conditions vary from one country to another."
Unlike in France, Poland's shale gas deposits lie very deep underground, which means the risk of polluting ground water is very low, according to the Institute. But in order to benefit from its shale gas reserves, Poland has to overcome two important hurdles that the United States, a pioneer of the industry, never had to worry about: the density of its population (three times superior to that of the United States) and the enormous quantities of water needed for extraction.
Nawrocki dismisses any concerns about the possible risks. "Poland is right in this matter," he says. "This is not contradictory with looking for an alternative source of energy."
Shale gas is part of a medium-term energy strategy, as it would satisfy interim energy needs while Poland gradually phases out coal plants and builds the infrastructure for a viable nuclear power industry, says Nawrocki. Poland does not have any nuclear plants for the time being, but it is planning to build two – at a cost of 25 billion euros (36 billion dollars), according to Donald Tusk.
The prime minister is not at all swayed by the recent Japanese catastrophe at Fukushima. "We should not succumb to hysteria: the nuclear menace in Japan was not caused by any technical failure in the nuclear plant. It was caused by an earthquake and a tsunami," Mr. Tusk insisted.
The Polish Parliament is expected to adopt a law on the matter by the end of this year. The government plans to announce a site and builder for the project by 2013, and begin producing nuclear-power electricity by 2020.
Photo - Poland MFA