Fracking Sparks Fresh French Concerns
The French parliament has reopened the explosive issue of shale gas fracking in the face of grassroots opposition and amid signs of cabinet level schizophrenia.
According to La Depeche citing the AFP-Agence France Presse news agency: “The all-party Parliamentary Office for Evaluation of Scientific and Technological Choices (OPECST), comprising members of the National Assembly and the Senate, has unanimously approved a feasibility study prepared by an Christian Bataille, a Socialist MP and Jean-Claude Lenoir, UMP senator for l’Orne, giving the green light for a report, set to be published in the Autumn. The office has been mandated to evaluate alternative extraction techniques to fracking or hydraulic fracturing, banned since 2011 in France.”
The move provoked a predictable outcry from grassroots campaigners — who have set up a countrywide network of groups opposed to fracking, numbering more than 250 at the latest count (August 2012). These opponents warned that global energy companies were lobbying strongly for a roll-back of the French ban on using fracking to extract shale oil from identified reserves in some of the country’s most important wine, agricultural and tourist regions. (See extensive French News Online reporting here, here and here)
The anti-fracking groups received support from cabinet member and Ecology Ministry Delphine Batho who said: “the issue is one of energy transition (…) not one of seeking new hydrocarbon sources, and here I think particularly of shale gas.”
The Non Gaz de Schiste Infos website reported February 1: “According to the latest report from Global Information Inc. France is among the 10 regions in the world offering the most promising reserves of oil because of its eastern shale gas fields.”
The OPECST preliminary study claims that hydraulic fracturing, banned in France since July 2011, is “an old technology that is now evolving rapidly as a result of widely shared environmental concerns.”
Furthermore OPECST noted, an alternative fracturing technique using propane is already in operation and “deserves further consideration,” while “other technologies are being researched and may lead to applications within a decade”.
Senator Jean-Claude Lenoir told AFP: “We want to see if we can use the gas and oil shale resources of France, but this requires that we pursue our search and we have acceptable techniques to allow us to reach the underground resources”.
Shortly after coming to office in May 2012 the Socialist government—which includes hard-line ecologists from the Green Party in its ranks, reaffirmed the fracking ban, but President François Hollande said late in 2012 that he would “take responsibility (for changing this stance) ” if environmentally friendly drilling techniques subsequently emerged.
Writing mid-January in Le Monde Hugues Poissonnier, associate Professor at Grenoble Ecole de Management noted: “The geopolitical revolution of shale gas is being accomplished without Europe. Between Poland, where the consensus is strongly in favour of exploitation of shale gas for better freeing that country of energy dependence on Russia, and France, where mistrust prevails given the environmental issues raised, the views diverge and promise lively debate within the European Union. Economic considerations are also important when we know that gas is 50% to 70% cheaper in the U.S. than in Europe thanks to the exploitation of huge shale deposits in that country…”
However there are increasing signs that shale gas is not all it is puffed up to be. “Do not be seduced by a ‘fracking’ gas bonanza”, wrote economics commentator Liam Halligan in Dec ember 2012 in the London-based Daily Telegraph:
“In recent months, newspapers have been full of reports of ‘game-changing’ developments in America’s oil and gas fields. US crude output is ‘poised to surpass Saudi Arabia’s in the next decade’, we’ve repeatedly been told, making the world’s biggest energy importer by far ‘self-sufficient in fuel by 2020’.
“By extracting oil and natural gas using technology such as the hydraulic fracturing – or ‘fracking’ – of underground shale rock formations, America’s energy industry is apparently able to employ millions of extra workers, while kick-starting a manufacturing recovery through cheap energy.
“It strikes me, though, that a reality check is needed, as America’s shale revolution may not be a ‘game-changer’ after all…
“Keep in mind, also, that two years ago, a US government study said Poland had shale reserves of 5.3 trillion cubic metres – enough to wean Eastern Europe off Russian gas. In 2011, Poland did its own study, which cut shale gas estimates to between 350bn and 750bn cubic meters – a rather different outcome. That’s why, earlier this year, the mighty ExxonMobil pulled out of Polish shale gas development…
“The exploitation of ‘tight’ oil formations at Bakken in North Dakota have helped US shale – plus Canadian tar sands – drive a rise in North American oil production averaging 0.5m barrels per day over the past two years, once falling output at other North American fields is included…
“The trouble is that recent increases in US/Canadian crude output have been entirely wiped out by production falls in other non-Opec countries. And even if North American shale oil/tar sands create an extra 0.75m barrels a day consistently, which they currently aren’t, that is more than offset by the annual rise in oil demand from the rest of the world…
“Once subsidies are removed, shale oil and gas is far from cheap, not least because it requires the continuous drilling of small wells, rather than the long exploitation of big wells. So constant – and costly – drilling is needed just to maintain shale output, let alone increase it. US shale energy looks cheap, because domestic prices are cheap. But that’s down to unsustainable tax breaks and laws that stop American energy exports.”
Others such as US writer James Howard Kunstler call it a Shale Gaz Ponzi Scheme: “In the process of all this a pattern emerged showing that shale gas wells typically went into depletion very quickly after year one. So all of the activity from 2004 to 2011 was a production bubble, aimed at proving what a bonanza shale gas was to stimulate more investment. It required a massive rate of continuous drilling and re-drilling just to keep the production rate level — to maintain the illusion of a 100-year bonanza — and that required enormous quantities of capital. So the shale gas play began to look like a hamster wheel of futility. After 2011 the rig count began to drop and of course production levelled off and the price began to go up again …The trouble is, once the price rises … it becomes too expensive for many of its customers, especially in a contracting economy with a shrinking middle class, falling incomes, and failing businesses. So what makes it economical for the producers (high price) will make it unaffordable for the customers (no money). Because of the complex nature of these operations, with all the infrastructure required, and all the money needed to provide it, the shale gas industry will not be able to go through more than a couple of boom / bust cycles before it begins to look like a fool’s game and the big companies throw in the towel. The catch is: there are no small companies that can carry on operations as complex and expensive as shale requires. Only big companies can make shale gas happen. So a lot of gas will remain trapped in the “tight” rock very far into the future. Obviously I haven’t even mentioned the “fracking” process, which is hugely controversial in regard to groundwater pollution, and a subject which I will not elaborate on here, except to say that there’s a lot to be concerned about. However, I believe that the shale gas campaign will prove to be a big disappointment to its promoters and will founder on its own defective economics rather than on the protests of environmentalists…”
According to Zero Hedge shale gas will be the next bubble to pop: “The ‘shale revolution’ has been grabbing a great deal of headlines for some time now. A favourite topic of investors, sector commentators and analysts – many of whom claim we are about to enter a new energy era with cheap and abundant shale gas leading the charge. But on closer examination the incredible claims and figures behind many of the plays just don’t add up. To help us to look past the hype and take a critical look at whether shale really is the golden goose many believe it to be or just another over-hyped bubble that is about to pop, we were fortunate to speak with energy expert Arthur Berman. Arthur is a geological consultant with thirty-four years of experience in petroleum exploration and production. He is currently consulting for several E&P companies and capital groups in the energy sector. “
Story: Ken Pottinger
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