Business calls on shale gas to end Russian dependence

  

In the wake of the Ukraine crisis, the European Union should put an end to its dependence on Russian gas imports by being “less emotional” about shale gas exploration, says the head of BusinessEurope, the EU employers' association.

Markus Beyrer, the secretary general of BusinessEurope, is calling on EU leaders and stakeholders to be “less emotional” about the exploration and extraction of shale gas in Europe to ensure the continent’s energy independence.

“We think that we have to balance climate policy, but also cost competitiveness and security of supply. And of course, recently, the issue of security of supply has been added an extra element of external dependence,” he told EurActiv in an interview referring to the growing conflict between Moscow and Kyiv.

>> Read the full interview with Markus Beyrer here

“Of course energy efficiency and renewables will play a role in this. But talking about the quantities, this will not be enough, so this means we will have to have a more rational, less emotional debate on other possibilities, starting with indigenous resources, including shale gas.”

Scientific facts

In Beyrer’s view, there are not enough scientific facts to back up the almost “dogmatic” opposition to unconventional fuels, such as shale.

“I would say that 90% of the arguments you normally hear are far away from the reality,” he said, arguing that excluding the option a priori is not a solution. Rather, the chief of the European business organisation proposes to “control the risks”.

“This is the stop of any progress. It’s not about excluding all risks ex-ante, it’s about controlling risks and we think there is a clear possibility to control risks but in order to go forward we at least need to explore.”

“And we think lots of the debates we’re having starting with these things with methane coming from water taps - all this has nothing to do with reality. There are a number of questions you have to settle on water purification, on seals, but we have to go forward, to explore and then find solutions to the problems,” he added.

Beyrer's views about shale gas angered Antoine Simon, a shale gas campaigner at Friends of the Earth, who rebutted those arguments.

“It seems like BusinessEurope is the only one to find this problem minor. Even the European Commission published a report last year on the environmental impact assessing the underground and surface contamination risks at its highest level of dangerousness. There are countless numbers of studies, from Stanford University, Duke University, MIT,” Simon stressed, adding “we are talking about major risks and this can be done only if it develops on huge amounts of land”.

Cost of drilling

Green campaigners assure that the proportion of shale gas in the energy mix would be “marginal” and would “not change our energy security problems”.

Moreover, the cost of drilling wells should be taken into account.

“The shale gas industry is a constant treadmill,” Simon argues. “When you start producing it [...] the production so quickly depletes that it requires drilling more wells just to keep the production flat. In the US in 2012, they had to drill 30,000 new wells for shale oil and gas just to maintain the same level of production; it’s extremely expensive.”

While drilling in the United States costs some €4 million, in Europe the figure would be two to three times more than that due to its different geology, Friends of the Earth argues, citing a study by Deutsche Bank and the auditing and advisory firm KPMG.

No panic

BusinessEurope also warns against what happened in Ukraine, where the government “tried to diversify energy resources” before getting a rebate from Russia.

“Although there is no reason for panic, the situation is much better than it has been in previous years, because it’s warmer outside, the stocks are full and I think there is no big question mark for the time being. But it’s a clear sign in the medium and long run, that there are good reasons for working in the direction of less dependence,” Beyrer hopes.

Other sources

For environmentalists, Europe should focus on other options, such as renewables and energy efficiency improvements.

They cite another study, “saying that an ambitious energy savings policy can lead to net savings of €250 billion per year by 2030, which is the cleanest, cheapest and most geopolitically secure way”. As for renewable energies, Simon put forward Spain, who “announced that in 2013 the biggest source they produced was wind energy”.

Business Europe does not see it the same way. The director general, who welcomed the European Commission’s “less ambitious” 2030 targets in the energy and climate package, supports energy efficiency and renewables, but says they cannot suffice.

>> Read also: EU sets out ‘walk now, sprint later’ 2030 clean energy vision

“Of course we need energy efficiency, of course we need renewables, but we’ve seen that these three targets have been mutually distorting and producing the wrong results,” he assures.

“What we produced in Europe via these broken down targets is a very distortive system, a very costly system, and a system which is producing too little for too much money, and has been the main drive for high energy costs in Europe, which is heavily undermining our global competitiveness and industry,” Beyrer added.

Positions: 

64 CEOs of the European Steel Industry addressed an open letter to the Heads of State and Governments, a week ahead of their spring meeting in Brussels. The heads of state and governments have been called upon to restore balance between industrial, energy and climate policies in order to preserve the competitiveness of the industries which are at the core of the European economy.

The growing uncertainties in Ukraine show once again the strong correlation between security of supply and increasing energy prices in Europe. Russia's Gazprom supplied the European Union and Turkey in 2013 with a record 162 billion cubic metres of gas, of which 86 bcm was supplied through the Ukraine. Gazprom issued a warning that it could stop shipping gas to Ukraine over unpaid bills. Central Europeans fear, they could be under threat again due to an escalation of tensions between Russia and the West over Russia's seizure of Crimea.  And there are media reports of analysts, e.g. in euractiv, that US natural gas would not reach European markets before 2016, and thus could not provide an alternative in the current Ukrainian crisis.

Energy efficiency and renewables are part of the energy mix in Europe and part of the solution, but not enough. Steel Industry calls an open-mindedness with regards to alternative, domestic European resources, such as shale gas.

EUROFER Director General Gordon Moffat said: ”Energy extraction is always environmentally challenging and we don't under-estimate the concerns raised in shale gas development in Europe which has a population density and regulatory infrastructure very different from that of the USA. Nevertheless, given the absolute necessity for Europe to diversify its sources of supply of gas and to find solutions to the huge energy price differential with its main competitors we see no alternative but to proceed as rapidly as possible with shale gas exploitation as part of the energy mix in Europe while retaining all the precautions necessary in pursuing this approach.”

Timeline: 
  • March 2014: EU Energy ministers meeting
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Comments

Hans Nilsson's picture

The dependence is a priori a dependenace on fossil fuel and that will not be cured with Another gas. Only with energy efficiency and renewables!

Mats Jangdal's picture

I disagree with you Hans. We should utilize oil as much as we can wile we explore other sources to tap. The future belongs to those who utilize the possibilities of today to secure tomorrow. Those who refuse to prepare for tomorrow with todays possibilities will be lost and gone for ever.
There is no climate change caused by man and hence no reason to restrict our doings to suit false imaginations.

xam's picture

A good example of how bad times (Russia-Ukraine issue) can be used to promote bad ideas.

It's also very convincing to hear a climate-change denier say that the "future belongs to those who utilize the possibilities of today to secure tomorrow".

Right...

Mats Jangdal's picture

xam, or is that xpam?
The IPCC can not show any change in global climate for 17,5 years now. They still claim there must be one, because their models all say so. But they can not point to it and say look, there it is!
Now who's the denier?

xam's picture

Mats, it's Max :)
Could you link all readers of this to the sources for your statement ? (it's genuine interest, not rhetorical).

Herve's picture

We are in a full Religion War, worse, an ideologic war !!
I was originally very receptive to the very simplistic arguments about CO², global warming, limited resources and so on. But when in 2007 the warmist Pope Jansen of NASA claimed "all is over, there is no more doubt allowed, we must fight CO²" I awoke and listen to opponents - guys speaking at the risk to lose their jobs and positions, which is the total opposite for warmists - and the disdain from IPCC's towards the genuine scientific remarks clearly convinced me that warmists were not scientifically sincere.
Most of their unexplained wrong predictions are still pending: The equatorial stratospheric bubble ? The hyper emphasis of aerosols, just demised now? The neglect of having analysed 20th century climate variations ? The hockey cross forgery ? No explanation about the 17th-year-of-no-warming?
The anti-industry ideology of youth, irrealistic and passionate people lead them to dreams. But a dream with no economic or human feasbility is doomed to remain a dream, then a regret, then suicide. Future belongs to those who effectively remain entrpreneur-ships, realisms and risk taking, not to lazy dreamers...

xam's picture

Speaking for myself, and suppose many others (and possibly for yourself as well - I'm not sure about your 'hard' scientific background), it's true that I personally will not able to recognize the impact and relevance of certain observations. For instance the open questions you mention: what is their impact? are they profound enough to invalidate the overall picture generally supported by an overwhelming majority of scientists?

If the reason for according (excessive?) importance to opinions of opponents, which are by the way sometimes openly fraudulent, is the cultural preference for entrepreneurship (which I somehow read through your lines) I think you shouldn't be concerned. At present it appears to me it's the fossil fuel-based establishment that is most subsidized and in many ways mercantilist - so basically anti-entrepreneurial.

There is far more entrepreneurship in the youth you call lazy dreamers. If innovation is a measure of the entrepreneurial spirit, then certainly the unending stream of new business models, ways of using resources, organizing work - entered into with risk and often against all odds - is a sign that the energy is there and will flourish once dignified and liberated.

Herve's picture

Xam: Nice to chat with you.
Don't worry I have a nice scientific background!
I agree with you that even specialists cannot (yet) agree upon GW and Man's responsability. So, neither us could conclude.
My approach was judging IPCC attitudes towards scientists of opposite opinion, notably disdain towards suggested additionnal natural interferences.
Now, let me remind you that 97% of scientists told to support IPCC reports is not of any significance: By 1601, 100% of existing scientific establishment were fully convinced that Earth was the center of Universe and that other planets, the Sun and stars were all orbiting around Earth. They even publicly burn Giordano Bruno for this.
Fossil energy have certainly been subsidized but they have supported the world for a couple of centuries. So far, renewables have also been subsidized and it would be highly useful to compare Subsidy/Result ratio for both.
You address also Innovation: A recent report issued in Germany available on Der Spiegel, warns Government and rings the alarm bell because present high erratic renewable subsidies results into a severe drop of R&D expenditure in Germany in comparison with 1980 situation.
My deep opinion is that renewables shall be investigated because some long term sustainability prospects. Once this is said, so far emphasis has been set (now exclusively in Germany) upon very variable renewables and this is a major error: The worshipped High capacity electric storage to needed level is physically impossible (your scientific background shall tell you that); the amount of materials to buy, handle, install per produced KWh is about 5-10 times greater than some fossil solutions. There is no hope for balanced competitiveness and the by error selected renewables are either doomed to disappear or be infinitively subsidized: Would population accept this? Onece informed, they will say no.
This is why governmental positions in Spain, Germany, UK and some others are close to a 180° U-turn because of ballooning deficits when reality hits.
This is why I said "dreams" without economic and physical basis remains futile.

Herve's picture

Xam: Nice to chat with you.
Don't worry I have a nice scientific background!
I agree with you that even specialists cannot (yet) agree upon GW and Man's responsability. So, neither us could conclude.
My approach was judging IPCC attitudes towards scientists of opposite opinion, notably disdain towards suggested additionnal natural interferences.
Now, let me remind you that 97% of scientists told to support IPCC reports is not of any significance: By 1601, 100% of existing scientific establishment were fully convinced that Earth was the center of Universe and that other planets, the Sun and stars were all orbiting around Earth. They even publicly burn Giordano Bruno for this.
Fossil energy have certainly been subsidized but they have supported the world for a couple of centuries. So far, renewables have also been subsidized and it would be highly useful to compare Subsidy/Result ratio for both.
You address also Innovation: A recent report issued in Germany available on Der Spiegel, warns Government and rings the alarm bell because present high erratic renewable subsidies results into a severe drop of R&D expenditure in Germany in comparison with 1980 situation.
My deep opinion is that renewables shall be investigated because some long term sustainability prospects. Once this is said, so far emphasis has been set (now exclusively in Germany) upon very variable renewables and this is a major error: The worshipped High capacity electric storage to needed level is physically impossible (your scientific background shall tell you that); the amount of materials to buy, handle, install per produced KWh is about 5-10 times greater than some fossil solutions. There is no hope for balanced competitiveness and the by error selected renewables are either doomed to disappear or be infinitively subsidized: Would population accept this? Onece informed, they will say no.
This is why governmental positions in Spain, Germany, UK and some others are close to a 180° U-turn because of ballooning deficits when reality hits.
This is why I said "dreams" without economic and physical basis remains futile.

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