The same technology that brought the lowest natural gas prices to U.S. consumers since 2002 is being unleashed in Eastern Europe, threatening to reduce Russia's grip on the region's energy supplies.
Exxon Mobil Corp. (XOM), Chevron Corp. (CVX) and Talisman Energy Inc. (TLM) are among companies leading the drive to unlock gas trapped in shale rocks from Poland to Bulgaria that may be enough to meet regional demand for almost 80 years, according to the Energy Information Administration. Poland, the hub of the wildcatting, has completed seven wells out of 124 planned, and the results are being assessed now.
A successful drilling campaign would redraw the energy map across Europe, a continent now reliant on Russia for about a quarter of its natural gas. The efforts to find more gas are taking on greater urgency as Germany plans to phase out nuclear energy and limits tighten on emissions of carbon dioxide blamed for global warming.
"The need in central and eastern Europe to at least try and uncover if they have this resource is much, much higher than it's going to be in western Europe," said Oswald Clint, a senior energy analyst at Sanford C. Bernstein & Co. in London.
When U.S. President Barack Obama visited Poland for the first time last month, he offered to share the technology developed from Texas to Pennsylvania that's used to crack open the gas-rich rock formations. Poland wants to start producing gas from shales within a decade, about the same timeframe that Germany has for closing its 17 nuclear reactors that produce 23 percent of the electricity for Europe's biggest economy.
Eastern Europe may hold as much as 7.1 trillion cubic meters of shale gas, the EIA estimates. Poland alone may sit atop about 5.2 trillion cubic meters, equal to more than 300 years of domestic consumption.
"The geological conditions in Poland are phenomenal," said Ingo Kapp, a physicist at the GFZ German Research Centre for Geosciences in Potsdam, Germany, who specializes in exploration techniques. "There is a remarkable amount of gas deposits."
David Fuller's view Over the last year Fullermoney has pointed out that Poland has the largest known shale gas reserves in Europe, followed by the Ukraine. This remains a game changer and may be a contributing factor in the relative outperformance of Poland's stock market. However, the main economic benefits will accrue from the next decade onwards.Back to top