Fracking Still Controversial in Europe

From The New York Times

By Stanley Reed

ST. ANNES, ENGLAND — Just outside Blackpool, a town of faded cabarets and amusement rides on the Irish Sea, a drilling rig sits in a muddy farm field. The big white and yellow machine represents the latest attempt by Cuadrilla Resources to see if it can bring Northwest England the sort of shale gas revolution that has transformed the U.S. energy picture.

Cuadrilla’s chief executive, Francis Egan, who joined the company four months ago after a career spent in the international oil industry at giants like Marathon and BHP Billiton, says that Cuadrilla believes there is 200 trillion cubic feet of gas beneath the company’s 900-square-kilometer, or 348-square-mile, concession in the area.

“That is a huge amount of gas,” he says. Even if only 10 percent were extractable, it would be enough to fuel Britain’s current consumption for about seven years.

Britain is one of several European countries where experts think there could be commercially exploitable shale gas. The U.S. Energy Information Administration estimates that there may be as much as 600 trillion cubic feet of recoverable shale gas in Europe, or about 40 years’ consumption.

But there is still uncertainty about whether significant volumes of gas can be produced in Europe through drilling and hydraulic fracturing, or fracking, as has been done in the United States. The industry is barely getting started in Europe, but opposition is already strong.

Countries including France have banned fracking, the process of breaking up dense shale to free the natural gas.

Environmentalists, as well as many people living near possible shale gas sites, worry about the huge quantities of water that fracking uses. They also fear that shale gas will prolong the fossil fuel era by reducing the incentive to switch to cleaner but more expensive energy sources like solar and wind.

Cuadrilla’s efforts in Britain are being closely watched as a test case. The company is backed by a leading U.S. energy private equity firm, Riverstone Holdings, which owns a 41 percent stake. John Browne, a former chief executive of BP and now Riverstone’s chief in Europe as well as Cuadrilla’s chairman, still enjoys great prestige in Britain.

“If companies like Cuadrilla can make one example work, we believe that bans in other countries may be lifted” said Menno Koch, an analyst at Lambert Energy Advisory in London.

The results of the limited shale gas explorations in Europe so far have been mixed. Earlier this year, for example, Exxon Mobil pulled out of Poland, once considered among the most promising shale spots, after drilling just two wells. The company said the data it collected suggested that the deposits were not commercially viable.

Nearly all the companies involved in shale gas exploration across Europe say there is not yet enough information to draw firm conclusions about how much gas is there and, more important, whether it can be made to flow.

Derek Magness, Warsaw-based director of European onshore operations for Chevron, said that he and colleagues had made it a practice to hunt around in old government repositories in Eastern Europe for dusty boxes of paper drilling logs and rock core samples.

“The data we are getting gives us additional curiosity,” he said. “We want to be very thorough.”

Chevron has drilled two wells in Poland and is preparing to start a third. Mr. Magness said the company had identified potentially rich shale areas in a broad region extending from the Baltic to the Mediterranean. It has locked up millions of acres along this band in Poland and Romania and won a tender for more in Ukraine. Mr. Magness filled in another piece of the puzzle recently by acquiring a 50 percent stake in a privately held Lithuanian oil and gas exploration company, LL Investicijos.

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