Caspian Report - Issue: 07 - Spring 2014

Minister stated that the moratorium
on hydraulic fracturing is rather a
temporary measure until a review of
potential environmental and health
risks have been conducted and prove
that those environmental risks can
be controlled and managed.
Romania’s issuance of exploration licenses
for its shale gas reserves and
early successful lighthouse projects
will shape the future trajectory of
Bulgarian discussions and decisions
in regard to the current moratorium
on hydrofracking. However, many
energy experts believe that this decision
is likely to be reversed once environmental
studies are completed.
Estimated European shale
gas reserves:
• UK: Up to 1,700 trillion cubic metres.
Original estimates were as high
as 5.3 tcm.
• Germany: 6.8-22.6 tcm, with technically
recoverable reserves of 0.7-2.3
tcm (10% of total shale gas reserves).
• ExxonMobil estimate of Germany’s
exploitable reserves: 827 bcm.
• German conventional gas reserves
in comparison: 150 bcm.
• Bulgaria, Romania and Hungary:
538 bcm of technically recoverable
shale gas reserves.
Conclusions and
Perspectives
Notwithstanding its own unconventional
gas prospects, the EU-28
stands to benefit from the expanding
worldwide unconventional gas
production in various ways. This
emerging global trend will open up
new sources of LNG imports, including
from the U.S. and countries for
which exporting gas is an entirely
new industry.
The U.S. shale gas revolution cannot
be replicated in Europe with the
same low costs of shale gas production;
nor will it reach the same volumes.
It will take place in an evolutionary
(rather than ‘revolutionary’)
way. Nonetheless, it is expected to
become an economically competitive
source of energy, in particular
compared to imported Russian conventional
gas from its new and very
expensive gas fields in the remote
regions of Yamal and Siberia, transported
via long distance pipelines.
With the growing use of LNG on the
global gas market, traditional oilindexed
gas contracts will gradually
decrease as the global gas market
becomes increasingly integrated,
whereas spot markets for gas will
expand both in number and importance.
Embracing unconventional
gas will keep costs lower than any
future conventional production
from new gas fields in remote regions,
including the Arctic in Russia,
as well as the hugely expensive new
(underwater) gas pipelines. Cheaper
European shale gas will help break
Europe’s overdependence on very
costly future Russian gas supplies.
The short and mid-term consequences
of ignoring or denying the
positive strategic dimensions of Europe’s
domestic unconventional gas
reserves are increased gas imports
from Russia, plus higher volumes
of LNG from often politically unstable
producer countries outside
of Europe. In 2012, the EU-27 spent
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CASPIAN REPORT, SPRING 2014