Exxon Mobil's chief executive called for disclosure of so-called fracking fluid during the IHS CERA energy conference last week in Houston. Fracking has become a hot-button issue in the United States as natural gas development kicks into high gear. In Europe, the French government said the risks outweighed the gains and decided last year to ban fracking outright. Exxon, however, posits that transparency may ease the minds of policymakers in a European economy on the cusp of its own shale gas boom.
Environmental advocacy groups in the United States have expressed concern about fracking fluid, noting some of the chemicals used in the controversial practice could find their way into drinking water supplies. According to FracFocus, a voluntary disclosure database, fracking fluid can contain anything from hydrochloric acid to ethylene glycol, or antifreeze. Energy companies and some U.S. states rich in shale, however, note that fracking has been carried out with few reported problems for several decades.
In Europe, however, the debate seems to be getting just under way as the shale market gains momentum. One year after the French government gave its blessing, lawmakers bowed to protester demands and passed legislation banning fracking, a practice not widely tested in Europe.
Now Rex Tillerson, chief executive officer at Exxon, says that, with an emerging shale market in Europe, it's time to give policymakers some piece of mind in terms of fracking. Tillerson said there's an enormous potential for shale natural gas in a European community eager to embrace a low-carbon economy. And with concerns about nuclear power growing following last year's disaster in Japan, shale could make sense for Europe.
Exxon signed a deal last year to explore shale deposits in Ukraine and Kiev has scheduled an international tender for next month. Ukraine, according to the U.S. Energy Department's Energy Information Administration, has around 42 trillion cubic feet of shale natural gas reserves. Though Exxon came up empty handed so far in its endeavors in Poland, the EIA ranks its shale reserves in the top five for Europe as well.
With all this positive news about Exxon and shale comes the criticism that Tillerson is making his case in order to get an early lead on the European shale boom. After Tillerson made his calls for transparency, Exxon officials apparently met with Turkey's energy company TPAO to discuss exploiting the 15 trillion cubic feet of shale gas reserves in the country.
Exxon is quick to note that it helped create the FracFocus web site, however. A side benefit to what economist Milton Friedman dubbed "the cloak of social responsibility" is that some good comes from corporate greed. Of course Tillerson wants to cash on in European shale, but maybe he's right – Europe does need its own FracFocus.
"We believe that will lead to open discussion about environmental protection and risk management, and the potential benefits of shale development in Europe," Tillerson said.
By. Daniel J. Graeber of OilPrice.com