Ukraine crisis: US, EU push for fracking boom to reduce dependence on Russian gas


The face-off between the West and Russia over its annexation of Crimea and threat to invade eastern Ukraine has raised calls for the expansion of shale gas production and hydraulic fracturing, or fracking, to reduce Europe’s reliance on Russian gas.

While the Obama administration is pushing to begin exporting natural gas to Europe, the call for Europe to start fracking operations of its own is being spearheaded in Europe by Britain’s Prime Minister David Cameron, conservative MPs, energy executives and other European leaders, including German Chancellor Angela Merkel.
According to UK’s Independent, speaking after a recent Nuclear Security Summit in The Hague, Cameron provoked uproar among environmental groups when he said he expects that shale gas wells will be “up and running” soon and that the opposition to fracking will decrease once people get used to it.

Cameron argued that Europe has a “duty” to become energy independent through the development of fracking activity and expressed frustration that it had not learned from the experience of the US.
He insisted that achieving energy independence should be a political priority for Europe.
However, any move by the authorities to expand gas production through fracking would pit them against environmental groups and European voters who are generally hostile to fracking.

European governments will need to convince Europeans that the environmental risks are worth the potential benefits. But convincing Europeans won’t be easy given the widespread public opposition.
Environmentalists have accused Cameron and conservative MPs of exploiting the Ukrainian crisis and fears of a new Cold War to promote fracking in Europe, instead of considering environmentally sustainable alternatives such as solar, wind and biomass energy.

The hope among supporters of fracking that Europe could be weaned of its reliance on Russian gas and thus strengthen its position in a future geo-political confrontation is heightened by optimistic estimates of European shale gas and oil reserves.
The Independent reports, for instance, that the British Geological Survey estimates there could be trillions of cubic feet of shale gas in the UK alone. According to the Washington Post, the US Energy Information Administration estimates that Europe could have nearly 470 trillion cubic feet of shale gas, a quantity only slightly less than US reserves estimated at about 567 trillion cubic feet.
Supporters argue that given the fact that Europe has vast gas reserves it makes no economic sense not to exploit them.
Britain’s Energy Minister Michael Fallon actually argued that it would be “irresponsible” not to frack given the vast resources and political benefits that Europe can reap from being self-sufficient in energy.

Supporters point to the US experience, arguing that in addition to the political gains of energy independence, fracking could help to push down energy prices and boost the European economy.
Environmentalists counter, saying that supporters are ignoring the environmental costs and other harmful effects of fracking, such as contamination of water supply, risk to human health and seismic activity.
While opponents of fracking are telling horror stories about the US experience, supporters have been trying to portray the US as a fracking paradise enjoying the economic benefits of the “fracking boom,” including energy security, lower energy bills and job creation.
Another argument that opponents have presented is that Europe’s geology is not the same as North America’s. They argue that Europe’s geology cannot support fracking on the same scale as in the US.

Some analysts say it would take several years to bring shale gas production to a significant level in Europe. They point to the US that began reaping benefits from its investments in shale production after 25 years of investing.
Such pessimistic assessments don’t seem to have dampened the enthusiasm of politicians whose attention is fixated on the Russian threat.
In Germany, where, according to the Washington Post, there is a moratorium on commercial-scale shale gas exploration, Merkel recently indicated an interest in shale gas production when she called for a “new look at energy policy as a whole.”

Germany relies on Russian gas for about a third of its energy needs. The prospects for Germany achieving independence of Russian gas in the foreseeable future, even with investment in fracking, are not bright.
That explains why Germany has been prominent among European countries pushing against US-sponsored moves to impose wider economic sanctions against Russia. Germany’s efforts to resist the push by the US for wider economic sanctions against Russia probably led to President Barack Obama’s recent criticism of Europe’s energy policy.
With expectations that selling the fracking proposal to the European public could take time, European governments are considering the short-term measure of importing shale gas from the US, according to The New York Times.
Forbes argues that the US is a potential competitor with Russia in the international market and could supply 10 to 20 percent of Europe’s natural gas needs by 2015, while other major liquefied natural gas (LNG) exporting countries, such as Nigeria and Middle East sources, including Qatar, could put in more to end Europe’s dependence on Russian gas.

According to The New York Times, Congress is pushing the Obama administration to begin gas exports to Europe to reduce dependence on Russian gas.
Houston-based Cheniere Energy has commenced work to build a plant in the Louisiana inlet of the Gulf of Mexico to begin exporting LNG to Europe by 2017.
The problem, however, is that US shale gas would cost much more – up to three times – to bring to the European market than Russian gas due to extra costs of liquefaction and shipping.
This is one key point that supporters of fracking have seized on to promote fracking as Europe’s only economically viable alternative in the long run.
However, it is being proposed that governments could find solutions to the cost problem through tax breaks and direct subsidies.

Forbes’ suggestion would horrify environmental groups: European countries could move their heavy subsidies on wind and solar and other renewable energy programs to fracking and importation of LNG.
However, the economic practicality of subsidizing gas supply at three times the cost of Russian gas is questionable.

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