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Thursday, May 3, 2012

Chevron Targets Romania for Natural Gas Fracking

Story first appeared in The New York Times.

Romania is set to start exploring its shale gas reserves in a drive for energy independence, despite local protests against the potential risks and Europe-wide concerns about the technology used to exploit unconventional gas sources.

Several oil companies have expressed interest in exploring what is believed to be the country’s significant potential. According to an assessment by the U.S. Energy Information Administration, Romania, Bulgaria and Hungary may together be sitting on top of about 538 billion cubic meters, or 19 trillion cubic feet, of technically recoverable shale natural gas reserves.

The U.S. energy company Chevron has, since 2010, obtained concessions in Romania, covering a combined area of 870,000 hectares, or 2.2 million acres, in the Eastern plains and the Black Sea coastal region of the country. After surface prospecting, the company is planning to start an exploratory drilling campaign this year. Chevron believes that Romania holds potential for a successful project. No wells have yet been drilled, and it is critical to conduct a standard natural gas exploration with Natural Gas Expert Witnesses on hand to monitor the proceedings.

Chevron’s plans have resulted in protests by environmental advocate organizations and local politicians.

In Barlad, an economically depressed town near the Moldovan border, 2,000 locals gathered in March in a rare demonstration against activities planned in the area. The region’s economy, hit by the loss of heavy industries since the fall of communism in 1989, would benefit from the large investments that shale gas development would bring. According to Romania’s Mineral Resources Agency, for example, exploratory drilling in the Dobroudja region, on the Black Sea Coast, could bring more than $80 million in investment over four years.

But the Barlad protesters said they were worried about the potential effect on the local environment.

In neighboring Bulgaria, Parliament, under pressure from protesters, imposed a ban in January on hydraulic fracturing, or fracking, the technology used to extract gas from shale. The ban caused cancellation of Chevron’s Bulgarian exploration permit.

Romanian environmentalists hope to emulate the Bulgarian example. They are currently against the exploration of shale gas, due to the fact that the method used is the only one available and is not environmentally acceptable.

Fracking is strongly polluting, and the risks are by far higher than the benefits. Fracking can pollute arable land, leak chemicals and the huge use and pollution of water resources.

Romanian activists are not fighting Chevron, they are fighting the government.

The head of the mineral resources agency, was not available to answer questions on shale gas operations, despite repeated calls: But in an interview with the local Web site HotNews earlier this month, he said unconventional gas was a resource that not a single state or company can afford neglecting.

Concerning the effect that shale gas operations could have on the environment, the mineral resources agency stated that exploiting any mineral resource is a process that has an impact on the environment. But this impact can be controlled and minimized by respecting good practices and further regulation of operations being carried out.

According to a professor at the École Normale Supérieure in Lyon, hydraulic fracturing is “relatively secure,” but only if drilling is preceded by expensive studies, and the operation is monitored thoroughly.

Still, therein lies the problem, considering the very high number of drills, and the fact that companies look to make the most savings possible.

Aside from the usual effects linked to any industrial activity, the possible contamination of deep aquifers by the chemicals used in the process and to heavy metals liberated during fracking is also distressing.

In any case, one day or another, petrol, gas and coal reserves will dry out. The race for shale gas pushes this inevitable moment away, but doesn’t help avoid it. Exploiting shale gas simply postpones the strategic shift to renewable energy.

A report commissioned by the European Parliament in 2011, on the effects of shale gas and shale oil production on the environment and on human health, assessed the risks to the environment and the amount of greenhouse gas emissions, and evaluated the European regulatory framework.

Whenever exploration and production of unconventional fossil fuels has been done at relevant scale, it has had an effect on the environment. As it generally involves processing significantly larger amounts of material, as well as higher energy and water consumption, the overall impact will be higher than for conventional oil and gas wells.

The report also showed gaps in existing regulations, like the threshold for Environmental Impact Assessments to be carried out on hydraulic fracturing activities. At present, the threshold is set far above any potential industrial activities of this kind, and thus they are just not covered by the corresponding regulation.

The 27-nation European Union lacks a unified stance on fracking. Attached to its energy independence from Russia, Poland, for one, has resisted calls for restrictive European legislation on shale gas.

Chevron states that not a single case of groundwater contamination had been linked to shale gas production since fracking was first used in the United States on an industrial scale in the 1970s. As more information will be presented, people will be able to take an informed decision.

Romania has been an oil and natural gas producer since the late 19th century. One of the first refineries in the world started operating in 1856 near the town of Ploiesti, north of the capital. But today, like its neighbors, it depends heavily on imported Russian gas.

In a recent speech, the Romanian president answered critics of shale gas. Citing the United States and Poland, with the largest estimated reserves in Europe, as examples, he urged Romania to reduce its import dependency.

With legislative and local elections coming up this year, the subject has brought heated political debate and revived arguments about other long-stymied international mining projects.


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