As America continues to surprise the energy world with the astounding boom in oil and gas production it wrought from shale, the rest of the world is lagging far behind. Europe has sizable reserves of its own, but is struggling mightily to approach any sort of commercial production. The FT reports on Poland’s problems:
[E]xploratory wells have failed to meet expectations and many drillers have grown impatient with regulatory delays that executives say have smothered their ambition.Of the 11 foreign companies that invested in the country’s shale gas market over the past four years, seven have abandoned the market, after spending a cumulative £500m. […]The steady withdrawal of investors and explorers and rising disillusion with Poland’s shale gas prospects is not likely to be helped by the recent sharp fall in global oil prices, which have cast doubt on the financial credibility of the fuel even in well-established drilling markets such as the US.
Warsaw is finding it difficult to replicate any of the many factors that have proved essential to the American shale experience. Complex geology is confounding initial enthusiasm for what looked to be very promising reserves, and as major after major quits the country’s shale formations, Poland’s expectations for commercial production have been pushed further and further back. Add to that a confusing regulatory environment and byzantine bureaucracy, and it’s not hard to understand the absence of shale success.Of course, Poland isn’t the only country in Europe with enticing hydrocarbon shale reserves. Germany has plenty of reason to frack itself, but environmental concerns have spurred Berlin to enact a ban on shallow fracking and an effective moratorium on the practice more generally. On Monday, an Environment Ministry spokesperson refuted a Der Spiegel report that the German government was considering getting rid of that depth ban, reaffirming Berlin’s reluctance to tap those domestic energy sources.Energy security concerns have bloomed in Europe this year, after Russian aggression in Ukraine has many of the continent’s leaders concerned over the volatility and strategic implications of such a heavy reliance on Moscow’s gas. Shale could play an important part in any move to diversify away from Russian supplies, but a number of hurdles stand between Europe and a shale renaissance.