Whilst it is exceedingly difficult to summon up much sympathy for either Russia’s state-owned natural gas monopoly Gazprom or Russian President-elect Vladimir Putin, the dynamic rise of natural gas produced by hydraulic fracturing, or ‘fracking,” has raised alarm bells in the highest reaches of the Kremlin.
Because Gazprom’s European customers, tired of being ripped off by Gazprom, are avidly exploring the possibilities of undertaking fracking to develop their own sources of the “blue gold,” and nowhere is interest higher than in the Russian Federation’s neighbors Ukraine, Poland, Romania, Bulgaria and China.
The Russian leadership is sufficiently unnerved by the prospect that on 11 April Prime Minister Putin told the State Duma in his final address before he takes over as president on 7 May, "We have to be ready for any external shocks. The likelihood of them recurring is, as you know, high. The world has entered an era of turbulence, and there's also a new wave of technological changes. The configuration of the global markets is altering. There have been questions from the various political factions, and I'm just going respond to some of them.
For example, the U.S. in recent years has been actively engaged in the production of shale gas. Colleagues from the Liberal Democratic Party asked about this problem. Do you realize how important this is - after the collapse of the Soviet Union, we inherited a whole series of intermediaries and transit networks. This could of course redefine the hydrocarbons market in a big way. Russian energy companies have to be ready right now to meet this challenge."
Underlining the seriousness of the issue, Putin’s speech was broadcast live by the Russia 24 TV network.
Seeking to put a positive spin on his grim pronouncements, Putin continued, "I fully agree with the proposals of the Duma deputies that we need to establish a system for better long-term forecasting in the macroeconomic, financial, technological and defense sectors. This is especially important because the 21st century promises to be a new era of new major geopolitical centers in the financial, political and cultural and spheres. The last four years have brought into our national treasury of oil and gas riches the Vankor and Talakan developments and new fields in Yamal, Yakutia and Sakhalin. Work has begun in the Caspian and on the Arctic shelf. Construction has begun on the first phase of the ‘Eastern Siberia - Pacific Ocean’ oil pipeline as we come to supply the Asia-Pacific region, a very efficient, fast-growing area of the world. On the world oil market, Russia has even created a new grade of oil. Furthermore, last year, for the first time we went directly to the gas market in Europe with the imminent opening of the ‘Nord Stream’ natural gas pipeline under the Baltic Sea and by the end of the year should begin laying the ‘South Stream’ pipeline.”
What Putin signally failed to tell the Duma delegates was that the rapid growth in U.S. shale gas production has already led Gazprom to postpone the launch of its massive Shtokman gas condensate field development in the Barents Sea, which contains an estimated 3.9 trillion cubic meters (tcm) of natural gas. In 2009 the U.S. overtook Russia as the world’s biggest producer of natural gas as expanded fracking activity to extract fuel trapped in shale rocks. Even worse, by 2016 the U.S. plans to become a net exporter of liquefied natural gas, with initial sales of 31.1 million cubic meters (mcm) a day doubling within three years.
Gazprom’s exports to Europe are already falling because of increased competition....MORE*I re-purpose one of the old Polish political mottoes, "For our freedom and yours".
There's a European Parliament meeting tomorrow on shale gas, New Europe has the story:
NGO accuses MEP of using anti-Russian bias to tout shale gas
In a statement released on Monday, Food & Water Europe blasted the draft report by MEP Bogusław Sonik (European People's Party) on the environmental impacts of shale gas and shale oil extraction activities.The environmental group Food & Water Europe has accused the Polish author of a European Parliament report on shale gas extraction of resorting to "Cold War" rhetoric against Russia to support the industry's development.
The group sees Sonik's report as heavily stilted in favour of shale gas extraction, noting that the author failed to correctly quote the European Commission. The parliamentary report was released on 11 April.
Sonik considers that risks related to shale gas extraction can be contained through preventive measures. He strongly insists that shale gas development in EU countries should depend only on national authorities with the European Commission acting as a monitor.This morning the Sofia Echo reports some Russian skullduggery in the use of NGO's to push Gazprom's interest and how the old Russia Today, now RT, is the megaphone:
"Mr Sonik’s report begins under the assumption that shale gas is a 'very important new source of supply', conveniently dropping the key word 'potential' from this direct quote out of the Commission’s 2050 Energy Roadmap," Wenonah Hauter, executive director of Food & Water Europe, said in a statement.
Hauter also accuses the report's author of anti-Russian bias....MORE
...SHALE GAS BAD — GAZPROM GOOD
Europe is Russia’s number one customer for Russia’s number one export – natural gas.
Taking its market share for granted, Moscow in the recent years has been happy to bully its captive customers, to cut off supplies and to block Central Asian gas from reaching Europe.
Then along came a game changer: hydraulic fracturing, or ‘fracking,’ a technology that releases gas from shale rock.
Thanks to shale gas, North America, in only seven years, has achieved energy independence in natural gas — and has seen gas prices drop by 90 percent: to $2 per million British thermal units today.
By contrast, gas prices in Europe are five times as high — $10 per million BTUs.
Consequently, some of Russia’s biggest customers, notably Poland and Ukraine, are investing heavily in shale exploration.
Not so fast, warns RT.
Take this story aired Tuesday: "Fracking hell: UK government set to green light risky gas drilling."
From a long list of RT stories warning on the dangers of shale gas technology, here are a few:
"Pennsylvania law endangers public health to promote fracking"
"Americans protest fracking as Obama cheers for it"
"France may ban fracking, cites US disasters"
The last story came true.
France and Bulgaria banned fracking technology out of fear that it could poison drinking water or cause earthquakes. Defenders of shale gas extraction allege that Gazprom has secretly funded anti-fracking films, reports and movements. Gazprom denies these charges.
But, last week, in a speech to Russia’s Duma, Prime Minister Vladimir Putin warned about shale gas, saying: "Our country’s energy companies absolutely have to be ready right now to meet this challenge."...