Europe shale five years from US production levels, says Erste Bank
21 June 2011 12:08 [Source: ICIS news]
LONDON (ICIS)--?xml:namespace>Europe will have to wait at least five years before any significant production rates of unconventional gas are achieved, Erste Group Bank said on Tuesday.
“We believe that unconventional gas [such as shale gas and tight gas] will be tapped in Europe, but cannot currently imagine that it could reach the size of US natural gas production,” Erste Group Bank said in an analysis.
“There is a general lack of EU-wide policy towards unconventional gas and parties remain sceptical about the potential speed of development.
“We are pretty sure that a US technological know-how transfer would make things quite easy (note that unconventional gas drilling is already taking place in Poland by Aurelian Oil & Gas), but the biggest issue Europe faces is environmental protection and population density,” the report said.
Environmental concerns regarding potential water and soil contamination were heightened by Europe’s heavily populated landscape. This is in contrast to the population densities that explorers and producers in the US have had to deal with, Erste said.
“One should not forget that horizontal drilling is typically required and several wells are required to be drilled to tap the reservoir,” it also said.
The US also had the advantage of landowners being entitled to royalties from produced natural gas, which is not the case in Europe, the report said.
The latest estimates showed that the EU and Norway had 4,400bn cubic metres (cbm) of proved unconventional gas reserves and anywhere from 3,600-173,000bn cbm – representing around 72-346 years of European natural gas consumption – of potential unconventional gas resources, Erste said.
The respective figures for the US were 77,000bn cbm and 223,000bn cbm, while Russia has 44,800bn cbm of proven reserves and the Middle East has 75,800bn cbm of proven reserves, Erste also said.By: Will Conroy+44 20 8652 3214
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