Poland Stumbles as Shale Gas Industry Fails to Take Off
From Herald Standard
A map of Poland, unevenly colored in shades of yellow, brown, green and purple, like a half-finished jigsaw puzzle, hangs prominently on the walls of the country’s ministries, state agencies and corporations. Official visitors are cordially invited to take a closer look.
The label in the upper right-hand corner of this new map reads, “Map of Concessions for Hydrocarbon Exploration and Production.”
Poland, which last century was the target of foreign armies shaping the region’s political history, today is being divided up by a hydrocarbon fever that the Polish government has energetically encouraged. Hoping to reproduce the recent “energy revolution” brought about in the United States by the advent of fracking and other drilling technologies, the Polish government has spearheaded shale gas exploration in Europe in the hopes that one day it will have its own dynamic natural gas industry.
“Shale gas exploration and extraction is a priority for our government, and that’s the reason we’ve decided to focus the investment energy of many companies,” says Mikolaj Budzanowski, Poland’s treasury minister, supervising the country’s state-owned oil and gas enterprises.
So far, 111 exploration concessions have been awarded to about 30 companies, both state-owned and international, on a territory of more than 35,000 square miles — nearly a third of the country.
Despite the enormous infusion of capital and promises that production could start as early as 2015, however, Poland’s gas industry has yet to take off. Hampered by difficult geology, a paltry service sector, a lack of adequate infrastructure, as well as an uncertain regulatory and tax environment, there have been few exploratory wells drilled.
That, in turn, has delayed assessment of the actual size of reserves and left in doubt whether the industry could ever be commercially viable.
In 2011, the U.S. Energy Information Administration published an enormous figure — 5.3 trillion cubic meters of gas — in estimating the natural gas reserves in Poland, which generated the initial burst of political and investment enthusiasm. Then in 2012, the Polish Geological Institute together with the U.S. Geological Survey, using stricter methodology, decreased those figures by a factor of 10.
