Two countries have significant reserves: Poland, at an EIA-estimated 187 trillion cubic feet; and France, at 180 trillion cubic feet; both have enough to make them gas independent for decades, if not longer. But as environmental concerns have halted development of French fields, the fear is Poland could go the same way. That would be a shame from an environmental as much as an economic point of view.
Much of Poland’s power is generated from home-mined coal; a switch to gas, even shale gas with its associated methane leakage, would be a cleaner option. In addition, Poland is reliant on Russia for two-thirds of its natural gas, a relationship Poland is desperate to reduce. Major Western oil companies have bid for and secured some 90 leases this year, so the true extent (and commitment of the authorities) will become clear within the next year or two.
All Shale China
Lastly, China. The EIU tells us China may eventually produce more shale gas than any other country. By some estimates it has the world’s biggest reserves: EIA reckons there are 1,275 trillion cubic feet of shale gas in China, nearly 50 percent more than the second-ranked US. If this is correct, China’s shale gas reserves are a dozen times greater than its conventional gas resources and a potentially huge boon to a country heavily reliant on GHG-polluting coal for power generation.
Bringing in foreign technology and know-how will be critical. The new Five-Year Plan gives high priority to developing shale gas, and the major state energy companies Sinopec, PetroChina and China National Offshore Oil Corporation will be tasked with meeting those targets. In 2009, China and the US signed an agreement designed to help China measure its shale gas reserves, encourage “technical co-operation,” and promote Sino-US investment in shale gas in China. State-of-the-art drilling technology allows US companies to complete shale gas wells in a matter of weeks, whereas CNPC took 11 months to complete China’s first well.
The fear, rightly, among Western firms is the lack of intellectual property rights. Whatever assurances are given, it’s almost guaranteed that Western firms’ techniques will be rapidly copied elsewhere and the West’s involvement in domestic Chinese shale gas development will be relatively short-lived. Even though the EIA’s estimates have not been backed up with extensive surveys on the ground, the probability is China’s shale gas will be vigorously developed in the first half of this decade as the country seeks to reduce its dependency on imported energy sources. The extent of reserves and impact on the Chinese energy scene are, however, as yet uncertain.
When you look at the extensive potential for shale gas — and the above examples are by no means the only ones — the casual observer cannot but be impressed by the speed, ingenuity and entrepreneurial spirit shown by small US firms that, in the space of a few years, transformed the US energy scene. It seems unlikely that even with the technology now established, any of these other sources will be developed with equal dynamism.
By Stuart Burns
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