Poland Begins Shale Gas Extraction

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - Poland's bid for a shale gas revolution is underway as the first extraction has started at a test well in the northern part of the country.

Deputy environment minister, Piotr Wozniak, confirmed that the first shale gas to be extracted using the controversial technique known as hydraulic fracturing, or 'fracking' is well underway. Lane Energy Poland, which is owned by U.S. energy major ConocoPhilips (NYSE:COP) (Houston, Texas), has been extracting up to 8,000 cubic metres of gas per day from a test well near the town of Lebork since late July -- making it the largest shale gas operation in Europe.

"It's good news for Poland, and also for Europe," Wozniak told the media.

Fracking remains a hugely divisive practice in Europe with many nations refusing to allow it. While the U.K. is ready to experiment with fracking in order to exploit shale gas resources, neighbouring France is adamant that there will be no fracking. For additional information, see July 22, 2013, article - France To Keep Ban on Shale Gas.

Although Poland has estimated high shale gas reserves, its hopes for a major dash-for-gas have been hit recently with a number of companies pulling out of the country due to 'too much red tape'. Companies like Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas), Marathon Oil Company (NYSE:MRO) (Houston, Texas) and Talisman Energy USA Inc. (NYSE:TLM) have all backed out of shale gas exploration. Today, Chevron Chevron Corporation (NYSE:CVX) (San Ramon, California) remains one of the largest oil and gas companies still trying to find shale gas in Poland. Poland had originally hoped that commercial shale gas would be flowing by the start of next year but this will not happen.

Shale gas exploration in Poland has also been hit by a series of scandals recently when, last month, State prosecutors charged four government employees and three businessmen for colluding in a bribery scheme to help companies win shale gas exploration licences.

Wozniak, who is also Poland's Chief Geologist, said that gas at the Lebork well is being extracted at a depth of 3,000 metres "without threat to the environment". Piolish refiner PKN Orlen (Plock, Poland) is expected to release results from a test well in Syczyn in eastern Poland. Estimates by the United States Energy Information Administration (EIA) for Poland's shale gas resources were revised downwards this summer from 187 trillion to 148 trillion cubic metres.

Poland is determined to reduce its reliance on Russian gas imports, which account for almost 70% of its needs. In addition to that, the Ministry for the Economy recently warned that Poland is facing an looming energy crisis, warning that growing demand for electricity is not being met by an increase in power generation. It expects the situation to worsen when 4,400-megawatts (MW) of existing capacity will be decommissioned by the end of 2017. For additional information, see August 21, 2013, article - Poland Faces Energy Crisis.

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