Caspian Report - Issue: 07 - Spring 2014
Radu Dudau 96 This industry, however, faces fierce public opposition fuelled by emotion and fear, largely induced by manipulation and disinformation - and very little by way of scientific reasoning. Indeed, mistrust and even hostility on the part of the public is a serious hurdle for shale gas development in Romania – notwithstanding the uncertain results of the exploration itself. Currently, there is a disproportionate and inflated perception of the environmental and public health risks associated with shale gas development activity. A natural concern over the direct effects of industry’s operations has been exacerbated by a mixed campaign of media manipulation, political populism, narrow-minded economic nationalism and militant wishful thinking. This has given rise to an emotionally charged atmosphere, which prevents the clear presentation of arguments for public interest based on factual, costs-benefit analyses. The backdrop to this situation is a relatively widespread social mistrust in the competence and integrity of state institutions. Indeed, Romania lacks a culture of transparency and public consultation in relation to major extractive industry projects. As such, positions are radicalised and the odds of social consensus are poor. Nonetheless, public debate must be informed by scientific knowledge and the state must regain its credibility as the foremost promoter of public interest. A good starting point would be to turn the regulatory state agencies into truly politi-
cally independent entities, properly equipped with human and financial resources. The European Commission’s (EC) recent Recommendation “on the exploration and production of hydrocarbons (such as shale gas) using high volume hydraulic fracturing in the EU” 4 has put forward a unified framework for shale gas activities EU-wide. Building on the IEA’s (2012) golden rules for natural gas production, the Recommendation offers conceptual clarifications and urges strict operational safeguards to ensure environmental protection and adequate public involvement. In a scenario of increasing social acceptance and confirmed commercially exploitable reserves, Romanian shale gas could enter the market towards 2020. By then, hydraulic fracturing technology will probably be better understood in the public sphere, and hence a less frightening prospect. Transforming trends in the European natural gas markets In each of these domestic directions of new gas sources development, an additional element of unpredictability has to do with potential competition from pipeline imports. Several recent developments in the region are for the first time creating the likelihood of a liquid energy market in Central and Eastern Europe by the end of the current decade: (a) The growing interconnectivity of Eastern Europe’s national natural gas grids, which will allow for new trading relations, are superimposed on the East-West geographical setting of the large Soviet-era pipelines. Romania is already interconnected with Hungary (albeit only west-toeast) while reverse flow interconnections with Bulgaria and Moldova are to be completed in 2014. (b) The EU competition and market liberalisation policies passed at the beginning of the 1990s have become genuinely effective over the last few years, significantly limiting monopolistic practices within the European energy markets. (c) A global trend that has supported and stimulated gas-to-gas trade in Western Europe adds to the dynamic: the North American “shale gas revolution.” This made large quantities of Qatari LNG originally prepared for the American regasification terminals in the Gulf of Mexico available to Europe and Asia. Consequently, natural gas traded on the British, Belgian, Dutch and German hubs has become cheaper than the gas piped from Gazprom, Statoil or Sonatrach, and has led to increased contractual flexibility with these traditional suppliers. The long-term contracts (LTCs) concluded between large utility companies from Germany, Italy and France – Eni, E.On Ruhrgas, RWE, Wintershall, GDF Suez – and Gazprom were for decades solid and lucrative, enabling these companies to operate 97 CASPIAN REPORT, sprıng 2014 4. European Commission (2014), COM(2014) 23 final, January 22.
- Page 48 and 49: Davide Tabarelli 46 Environmental e
- Page 50 and 51: Davide Tabarelli 48 evaluate potent
- Page 52 and 53: View of the old town Ostuni, Puglia
- Page 54 and 55: Davide Tabarelli 52 of some 200 mil
- Page 56 and 57: Iran Nuclear Negotiations and Turke
- Page 58 and 59: Mehmet AkIf Okur 56 posal stated th
- Page 60 and 61: Iranian President Hassan Rouhani an
- Page 62 and 63: Mehmet AkIf Okur 60 The steps that
- Page 64 and 65: Mehmet AkIf Okur 62 It is possible
- Page 66 and 67: Frank Umbach 64 Strategic Perspecti
- Page 68 and 69: Frank Umbach 66 Many of the shale g
- Page 70 and 71: Frank Umbach 68 are considerably hi
- Page 72 and 73: Frank Umbach 70 The UK government i
- Page 74 and 75: With Russia’s President Vladimir
- Page 76 and 77: Frank Umbach 74 During the last thr
- Page 78 and 79: Frank Umbach 76 approved by the gov
- Page 80 and 81: Shale gas drilling rig. Frank Umbac
- Page 82 and 83: THE IMPORTANCE OF TAP FOR ITALY SOM
- Page 84 and 85: AntonIo SIleo 82 the end of 2011, g
- Page 86 and 87: AntonIo SIleo 84 Power generation o
- Page 88 and 89: ily limited because of the emergenc
- Page 90 and 91: AntonIo SIleo 88 ductant chemical r
- Page 92 and 93: AntonIo SIleo 90 emerge as a signif
- Page 94 and 95: Radu Dudau 92 Romania’s Energy St
- Page 96 and 97: Radu Dudau 94 countries pay for Rus
- Page 100 and 101: Radu Dudau 98 de facto monopolies i
- Page 102 and 103: Radu Dudau 100 In October 2013, the
- Page 104 and 105: Radu Dudau 102 In spite of the ling
- Page 106 and 107: caspian
- Page 108 and 109: Why World Oil Prices Should Be High
- Page 110 and 111: Luay Al-Khatteeb 108 for $1 of reve
- Page 112 and 113: emın akhundzada 110 Turkey as an E
- Page 114 and 115: emın akhundzada 112 markets. Given
- Page 116 and 117: emın akhundzada 114 First, it shou
- Page 118 and 119: FatIh Ozbay 116 Discussions about V
- Page 120 and 121: FatIh Ozbay 118 The Black Sea is a
- Page 122 and 123: FatIh Ozbay 120 these two countries
- Page 124 and 125: FatIh Ozbay 122 Montreux is quite s
- Page 126 and 127: MUbarIz Hasanov 124 Some Remarks on
- Page 128 and 129: Turkey will be USD 37 billion highe
Radu Dudau<br />
96<br />
This industry, however, faces fierce<br />
public opposition fuelled by emotion<br />
and fear, largely induced by manipulation<br />
and disinformation - and<br />
very little by way of scientific reasoning.<br />
Indeed, mistrust and even<br />
hostility on the part of the public is<br />
a serious hurdle for shale gas development<br />
in Romania – notwithstanding<br />
the uncertain results of the exploration<br />
itself.<br />
Currently, there is a disproportionate<br />
and inflated perception of the<br />
environmental and public health<br />
risks associated with shale gas<br />
development activity. A natural<br />
concern over the direct effects of<br />
industry’s operations has been exacerbated<br />
by a mixed campaign of<br />
media manipulation, political populism,<br />
narrow-minded economic<br />
nationalism and militant wishful<br />
thinking. This has given rise to an<br />
emotionally charged atmosphere,<br />
which prevents the clear presentation<br />
of arguments for public interest<br />
based on factual, costs-benefit<br />
analyses.<br />
The backdrop to this situation is a<br />
relatively widespread social mistrust<br />
in the competence and integrity<br />
of state institutions. Indeed,<br />
Romania lacks a culture of transparency<br />
and public consultation in<br />
relation to major extractive industry<br />
projects. As such, positions are<br />
radicalised and the odds of social<br />
consensus are poor.<br />
Nonetheless, public debate must be<br />
informed by scientific knowledge<br />
and the state must regain its credibility<br />
as the foremost promoter<br />
of public interest. A good starting<br />
point would be to turn the regulatory<br />
state agencies into truly politi-