Europe's prospects for shale gas fizzle


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Not so long ago it appeared that the shale gas boom that was taking place in the U.S. would spread to the rest of the world, but some recent revelations have shown that America must have been playing its lucky numbers in regards to the unconventional hydrocarbon resource.

It was only last April when the U.S. Energy Information Administration estimated that Poland contained 5.8 trillion cubic feet of natural gas reserves and 187 trillion cubic of technically recoverable shale gas resources. While this is a far cry from the 272.5 trillion cubic feet of reserves and the 862 trillion cubic feet of resources in the U.S., it was still a significant figure that had many people excited about the prospect of fracking - the technique commonly used to extract shale gas - in the country.

However, all those hopes may have been for naught as Poland's first official report into its shale gas reserves revealed that it may only contain about one-tenth of the levels estimated by the EIA, according to Reuters .

In addition to the drastic lowering of estimated reserves, exploration companies in Poland have encountered a number of additional problems, reports Bloomberg .

Rising taxes and a lack of proper equipment in the country have stymied explorers, as well as the fact that it costs three times as much to drill a well in Poland than it does in the U.S.

"The growth of shale in Poland will be slower than in the U.S. because it would need to build the infrastructure the U.S. already had available," said Laura Loppacher, a London-based oil and gas analyst with Jefferies International Ltd. "We know the gas in place is there, but it's unclear if it can be extracted at a rate that's commercial."

Reuters reports that the discouraging shale gas news has pushed Poland to further pursue nuclear energy, as many countries around the world move away from the power due to the Fukushima Daiichi disaster last year in Japan.

Elsewhere in Europe, the problems encountered by oil and gas companies aren't necessarily the same as they are in Poland but revolve more around public opinion. France and Bulgaria have both banned fracking.

While fracking may not be going away in the U.S. it appears that Europe may not be the hotbed of unconventional gas it was once thought to be.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: News Headlines , Economy
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