Cefic in ‘patient but urgent’ battle for indigenous Europe shale gas

15 October 2013 16:49  [Source: ICIS news]

By Will Conroy

WARSAW (ICIS)--The US is increasingly benefiting from a quarter-century head-start over Europe in exploiting shale gas reserves, the industrial policy director of the European Chemical Industry Council (Cefic) told chemical industry conference delegates on Tuesday.

Speaking at the 16th Central and Eastern European Refining and Petrochemicals gathering, organised by the World Refining Association, Jose Mosquera said Cefic must be prepared for a patient battle in its “active advocacy” for Europe to back the exploitation of much of its own estimated 16trn cubic metres (cbm) of shale gas reserves.

“The US has seen a shale gas revolution based on an evolution that took place over around 20 years, and it has resulted in what is a sustainable advantage,” he said, focusing on the cheap feedstock and power derived from shale gas that American petrochemical producers are now enjoying compared to European peers.

In its drive for indigenous shale gas in Europe, Cefic is now focused on making its case to EU officials drawing up a policy framework for unconventional gas extraction with a specific shale gas directive, Mosquera said.

“It is hard to know what will go into that framework but it will be about calming the [environmental] people who are against shale gas extraction and slowing down those for it, a compromise solution,” he added.

“But the EU should accelerate the responsible exploration and production of indigenous shale gas... the European chemical industry is facing a competitiveness challenge,” Mosquera said, highlighting how in France several shale gas exploration licences have been revoked while the president has backed a moratorium on shale gas drilling.

Poland, noted Mosquera, is the “only country in Europe that is making it happen” when it comes to moving towards commercial shale gas extraction, but even its efforts paled in comparison to what has happened in the US.

The rather small figure of just 30 test wells had been drilled in Poland, he said.

It was clear that in the US cheap shale-gas sourced feedstock was driving investment in the chemical industry, with the tally of newly announced projects standing at 126, worth a combined $84bn (€62bn), Mosquera said.

The coming three to five years would likely see a 38% increase of the US’s existing ethylene capacity of 30m tonnes/year, while flows of ethylene derivatives from the US to Asia, Latin America and Europe would certainly stay on an upward trend, he added.

The wider US manufacturing renaissance sparked by the shale gas revolution may also create a pull for specialty chemical investments, Mosquera noted.

While working towards its own shale gas production, Europe should meanwhile push for the free trade pact being negotiated with Washigton to include provisions ensuring access to American liquified natural gas (LNG) and natural gas liquids, he said.

By: Will Conroy
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