Green Shale Gas - Time for a reality check and decision making
Ecological sustainable energy exploitations come at a certain price. Do we know this price, and is EU willing to pay for it?
The oil and gas industry faces challenges when it comes to environmental concerns with respect to Shale Gas exploitation. This has been seen in the US, as public raise their voices and demand answers from the industry about the environmental impact of their production methodologies demanding millions of litres of water mixed with chemical additives.
Getting the public and legislators buy in will require efforts, not only on the information side, but also on how exploitation is done now and how it can look like in the future.
A GREEN exploitation of Shale Gas has to be addressed, and its cost has to be visualized, not only in money, but also in policies and research efforts.
This article will discuss this issue in more detail and also go in more depth on what could be done.
EU policy makers and their opinion
EU is pulled in all directions in the energy issue, mainly due to s a surging energy demand from its population and industries. The energy need surpasses the EU energy production within EU, also if including its associated economic member state, Norway.
The need for energy import is large, and the main exporter to EU is Russia. Many of the former Soviet states, now implemented into EU have more than 70% of their energy import from Russia, overall EU rely on 40% of its energy import from Russia.
The urban character of Europe creates a challenge for the oil and gas industry, as it creates constraints for its activities.
EU also looks into the renewable energy sector to see if any efforts in this sector could leverage the pressure on the energy balance of Europe.
Neither excludes the other, unconventional oil and gas resources together with the conventional oil and gas resources will have to work in conjunction with renewable resources to fulfil Europe's need for energy.
EU's Second Strategic Energy Review from 2008 stated; quote
"[...] high oil prices and the security premium to be placed on indigenous resources increase the interest of extracting indigenous oil and gas reserves, including unconventional reserves, insofar as this can be achieved in a sustainable manner."
The European Union Council stated in January 2010 that the energy security and energy efficiency package presented by the Commission on November 13 2008, in particular the Communication entitled "An EU Energy Security and Solidarity Action Plan"; they therefore concluded at a extraordinary TTE (Energy) Council on January 2009 and elaborated on the conclusions of the October European Council on energy security.
- There is a commitment to the goals on the reduction of greenhouse gas emissions, on the share of renewable sources of energy and on energy efficiency as agreed by the European Council in March 2007 and the agreement reached in December 2008 on the climate and energy package.
- There is a need for Europe to act together to deliver sustainable, secure and competitive energy.
- The fact that there has to be solidarity between Member States that has to be strengthened and balanced with Member States' responsibility over their energy security, fully respecting Member States' choice of energy mix and sovereignty over energy sources.
- The need for an efficient liberalized and well connected internal energy market together with a stable and transparent legal and regulatory framework as a prerequisite for an effective energy policy at Member States and EU level.
- The need for an early implementation of measures and commitments related to the internal market, energy efficiency and renewable energy that also contribute to energy security.
Despite the Strategic Energy Review and EU council support and elaboration around it, it is the fact that EU struggle to enforce its common Energy policy initiative to its member states.
What these initiatives and comments from EU address, is the need to create energy production in a sustainable manner. Embedded in this statement one can read that the energy production should be provided in an environmental secure manner, although it was not stated directly in the review.
Energy Strategy for Europe 2011-2020
The public consultation performed in 2010 by the EU commission to get input to its strategy document stated " Towards a new Energy Strategy for Europe 2011-2010" has created the process of aligning each member state energy policy with EU energy policy. This process is a long staking process, and it will take time for EU to get there, but it has to.
Priority areas for future strategy
Towards a low-carbon energy system
Modern integrated grids
Bringing the benefits of EU energy markets to businesses and citizens
Strong & coordinated external energy policy
Leadership in technological Innovation
Green exploitation of Shale Gas is it an alternative or just utopia?
Pressure is put on the operators and service industry that operate in Europe to look into the green aspect of their operations and include this into their planning, costs and innovation initiatives. Will the operators do so, and in that case, are they willing to take the cost associated with this?
You can also put it in another way, maybe a "green" Shale Gas exploitation can be more cost efficient than the present form of Shale Gas exploitation?
In another article by the author it was discussed in more detail about the 7 major challenges believed to face EU and need to be addressed in order to make Shale Gas Exploitation a success in Europe.
The 7 challenges European legislators and oil and gas industry is confronted with, the author called the PEG TEES.
In this article the author will address the first E in PEG TEES, which stands for "Environmental Concerns" with Shale Gas exploitation.
You can also see the author's Ukrainian Speaker Tour presentation on the same subject at;
http://bh.linkedin.com/in/stigarne under slide share presentations.
- Can the European oil and gas activities deliver a "green" Shale Gas exploration and production environment in order to win support amongst public and EU legislators, and make Shale Gas industry competitive in the EU zone?
- At the same time, is EU willing to pay the extra cost it will take to achieve this?
EU community as a whole may have to accept that their energy cost is going to be higher than in other trade parties, like China, Latin America and so on, due to its more strict environmental enforcement.
Both these questions above are hanging a bit in the air at the moment, as the Shale Gas exploitation is mostly driven by the industry need to secure acreage at the moment, in order to perform more detailed analysis of its potential.
EU will face competition from other continents when it comes to attract oil and gas industry focus on Shale Gas exploitation, and the industry will focus its effort where there is possible to make profit and provide stability and security for their projects.
The growing energy demand in EU might speed up the efforts to get Shale Gas into energy production within European continent, but this is not something EU alone cope with, China is amongst one of the countries seeking high and low on how to secure their surging energy needs, which today is the highest in the world.
EU needs to take a stand to at what cost it is willing to take to ensure its energy security needs and not be import dependent as it is today. Diversification and innovation within this area is needed, and it comes at a certain price tag.
EU needs to calculate this price tag at several levels, both the direct cost pr energy unit, but also the cost to develop its infrastructure, legislation and to perform energy reforms within the union.
So what is required from the industry side then?
The European based oil and gas industry needs to focus on one of the more hazardous elements for environment of Shale Gas exploration and production, water management.
Every level of the Water Management in the Shale Gas Exploration and Production need to be addressed. This since the Water Management has up till now been seen as the foremost environmental concern seen from a sweet water pollution and availability perspective. Not to say this is the only environmental concern with Shale Gas, but maybe the most important as it can be the most prominent one apart from footprint created and left by exploration and production of Shale Gas. Shale Gas exploration will require substantial infrastructure and make a substantial presence and acreage need in its surroundings during production. At least this has been the case up till now.
The rapid growth of shale gas production in recent years has resulted in the emergence of pressing environmental and water management challenges. Some countries in Europe see shale Gas as one of the key energy source of the future, Poland is one of the front runners in this respect. However, it is still years to come before we know of its potential and eventually will see some commercial production from Shale Gas.
It is imperative for operators to overcome legislative and operational challenges with respect to water sourcing, storage, transport, treatment and disposal that could be major challenges for its progress and commercial entry into the European market.
Sourcing and ecologically disposing of large quantities of water used in the hydraulic fracturing process is at the forefront of these challenges and these issues are raising increasing concern from stakeholders at every level, including operators, regulators and the public.
It is therefore a need for addressing water management issues at every stage in the exploration, production and completions process of Shale Gas activities in order to create acceptance amongst public and authorities together with the operators to progress and increase the market position of shale gas production. Issues to address are therefore;
- water management process to be ecological sustainable at the same time as it can be cost effectively integrated to enable efficient production.
- ensure optimal decision-making process for best practice water usage and treatment in form of accurate chemical composition of water required for hydraulic fracturing and at the same time to become ecologically acceptable.
- use of cutting edge and emerging technologies is critical to determine cost effective solutions for water treatment, re-cycling and disposal.
- regulatory and legislative challenges with respect to disposal, storage and transport of water has to be thoroughly examined on a region basis and environmental sustainable and cost-effective solutions should be provided.
- establish a network to discuss and exchange ideas for the most pressing issues in this part of the European oil and gas industry.
Water sourcing, disposal, treatment and re-cycling has to be targeted from four perspectives to provide maximum industry impact:
Based on these four perspectives key issues in the market will have to be addressed to provide solutions that can be implemented directly to business operations to reach maximum efficiency and at the same time be ecological sustainable.
The industry need to address the key challenges of water management as well as critical spin-off issues such as air emission mitigation and spill avoidance and contingency in order to provide legislators the information needed to create public support and support the Strategic Energy review of EU.
Both parties need to ensure that there is a European association that will have its mission to
"To facilitate the factual and collaborative exchange of unconventional gas knowledge and challenges among government, regulators, industry and public stakeholders for the exploration and production of the resource in an environmentally sensitive and economical manner."
Stig-Arne Kristoffersen, is educated as a Civil Engineer and Geoscientist. He has a long and broad international oil and gas industry background, with more than 25 years of experience within oil and gas exploration and production.