Premium article – Energy expert: “Shale gas exploitation is messy, but has nothing to do with water and land poisoning” (Interview)


Over 8,000 people took to the streets in Barlad to protest against Chevron shale gas exploitation, announced by Prime Minister Ponta. Part of the press wrote that Moscow would encourage these protests through lobbying firms, in order to undermine the alternative to Russian gas. Radu Dudau, energy expert, explains in an interview with The Epoch Times what hydraulic fracturing involves, which are the risks and how sustainable shale gas investment is.

[cleeng_content id=”607764200″ description=”Buy this translation today. This article has 4511 characters with spaces. ” price=”6.99″ t=”article”]Which are the risks to the environment and to humans which the hydraulic fracturing procedure entails?

The main risks are related to water management used in hydraulic fracturing. There are large quantities of water, which need to be purified and reintegrated in the natural cycle. The industry has the technological capacities to conduct such operations. The regulator must be very strict in imposing conditions. Currently, the risk of the well’s poor cementing is greatly reduced due to surveillance sensor systems. Thus, the images of gas coming out the water pipe and catching fire are very unlikely at the moment. Similarly, the fear of earthquakes is much exaggerated. Not only does fracking cause at most earthquakes of negligible intensity, but drilling is not conducted in earthquake fault zones.

Is investment in shale gas sustainable? Aren’t the costs too high for the price of gas, which is too cheap (there is strong lobby for higher prices already), isn’t depletion accelerated and the deposit potential overrated? Could there be after the real estate investment bubble a shale gas exploitation bubble?

These elements concern the local and regional gas markets parameters, as well as the overall fiscal gas exploration and production framework. Of course, if gas prices are not stimulating, investment will not be made. Regarding these resources’ potential, we do not know much yet rigorously, as no exploration operations were conducted. In other words, we know what we have in the ground in terms of gas-bearing clays. As for the “bubble” danger, it cannot take place in this sector, due to the high capital investment required, moderate profit margins and the average timeframe in which profits are obtained. In other words, we need to invest tens or hundreds of million EUR and wait for years, in order to recuperate investment and make a profit. It is not the business in which bubbles can take shape; they occur in sectors where with relatively modest investments, short-term profits are obtained. Anyway, the problem is investors are not that many. Few companies have the technology, capital and know-how to exploit shale gas.

Can shale gas exploitation really ensure Romania’s energy independence?

We don’t know yet if there’s something underground. Then, even if important reserves are discovered, their commercial value is set in relation to the market parameters, to tax and environmental regulations and to other types of possible restrictions. Setting certain sanctuary zones, for example near aquifers, as the German government has decided, restrains the area of potential shale gas exploitation operations. Beyond these aspects, which will be clarified only after exploration, the technology can be used in safety conditions. The practice in the U.S. has proven it abundantly.

Is Russia trying, by encouraging protests against shale gas in Romania, through lobby companies, to stop the development of an alternative to Russian gas?

I don’t know, but the fact is that it would lose from the potential success of implementing this technology in Romania and in the neighboring countries. As such, it has no reason to speak very nicely about the plans of companies interested in our shale gas.

How can you explain that protests against shale gas exploitation happen in Poland as well?

There are protests in the U.S. as well, not only in Poland. Shale gas exploitation undoubtedly involves a disturbance, even it’s not by far about water and earth poisoning, as our protesters say. However, it’s about the landscape, noise, heavy traffic of trucks, intense consumption (although lower than in other extractive industries) of water, smell etc. But the costs involved by these effects can be offset by compensation for landowners, by investments in the local infrastructure by the oil companies in question, by creating jobs and – I propose – by allocating part of the taxes charged by the state for the actual exploitation activity to the local community.

How to organize tenders for shale gas exploration without a legislation in the field?

We have legislation in the field, but it is currently makes no difference between conventional and unconventional oil and gas resources. For the exploration phase there’s no legal impediment however.

Radu Dudau is lecturer at the Bucharest University, where he teaches courses of international relations. He is also co-founder of the think-tank Romanian Energy Center (ROEC) and director of the Institute of Diplomatic Studies (Bucharest University). [/cleeng_content]

Original source in Romanian:—185679