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20th Economic Forum Panel Discussion: Will Unconventional Gas Change Traditional Energy Relations In The World

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During the 20th Economic Forum in Krynica the Kosciuszko Institute initiated a long-term expert project which aim is to analyze the determinants of the exploitation of unconventional gas (including shale gas) in Poland.

“Shale gas might serve to diversify the gas sector in Poland and Europe. However, it is necessary for the Polish government to take decisive actions and provide practical support so that the possible discovery and exploitation of domestic resources is feasible and ensures long-term energy security for Poland,” claims Izabela Albrycht, Chairman of the Board of the Kosciuszko Institute.

The U.S. is so rich in unconventional gas resources that as of 2008 the country does not need to import any natural gas. Furthermore, as of 2009 the U.S. occupies first place in the world among gas producers. Now it is interested in participating in the extraction of gas resources outside of the country. The estimated amount of unconventional gas that might be found in Europe is 14 trillion m³. It is very likely that there are unconventional gas resources in Poland, Germany, Hungary, Austria, Sweden, Great Britain, France. They may also be found in China and Russia.

The discussion panel in Krynica was concerned with the geostrategic dimension of energy relations in the world following the increase in significance of unconventional gas production in the U.S. “Unconventional gas has already changed energy relations in the U.S. and Canada,” said Mr. Paweł Poprawa from the Polish Geological Institute. In 2006 the extraction of unconventional gas comprised 42 % of domestic gas extraction in the U.S., and this trend is still growing. The process has influenced the world gas market – LNG gas is less expensive. Moreover, the extraction of unconventional gas has threatened the traditional ways of transmitting gas, making delivery of this energy source much more flexible.

Mr. Guy Lewis, Managing Director of the Gas Technology Institute in the U.S., said in addition that “not just 10 years ago discussions held in the U.S. resembled the current debate in Poland. The resource depletion problem was to be solved by increasing imports and building a significant amount of terminals. The terminals are not in use now because of the fact that unconventional gas has made us self-sufficient.” He also stated that the extraction of shale gas in Poland will depend on the geologic structure of the deposits and the possibility of adjusting the extraction technology. “In the U.S. every deposit differs, but we are able to flexibly adjust the technology to extraction conditions. Thus, there shouldn’t be any problems in Europe either.”

Tomasz Chmal, an expert in the field of energy, has pointed to the possible obstacles that stand in the way of the development of this sector in Poland. He heeded that the Polish government should eliminate procedural barriers regarding the licensing of gas extraction as well as create a programme whose aim is the production of unconventional gas – a programme similar to the one that is currently in use in the field of atomic energy. “Although PGNiG is the main producer of natural gas in Poland, this situation will change as soon as foreign companies producing shale gas enter the market. The government will have to face the challenge of adjusting the Polish gas sector, including its tarification, to the new situation.

“The need for energy is increasing, hence gas from Russia might not be sufficient enough to fulfil our needs. We need to look for alternative sources of gas,” said Roman Rewald, the chairman of the American Chamber of Commerce in Poland, which unites American companies investing in Poland. In addition, he said that “the U.S. Government supports the transfer of technology used in shale gas extraction to Poland. The U.S. is rich with experience while Poland has great potential when it comes to unconventional gas. The political will of the Polish authorities is also essential.” During the discussion both Polish and foreign experts pointed at the infrastructural, economic, geologic, environmental and legal challenges that need to be confronted in order to launch the production of unconventional gas in Poland and in the EU. They also underlined the possible profits of extraction, including an increase in employment in the areas of extraction as well as an increase in state income due to taxes and exploitation charges. As the discussion progressed the experts took up the subject of the potential political gains, helping Poland to become independent from just one gas supplier. 

“Unconventional gas might be considered our ‘saviour,” said Brian Horsfield, Director of the GFZ German Research Centre for Geosciences.

 

SUPPORT OF THE PANEL’S ORGANISATION

 


Polish Oil and Gas Company (Polskie Górnictwo Naftowe i Gazownictwo ) is the largest Polish gas exploration and production company. It is a leader in natural gas segments in Poland that are trade, distribution, oil and gas exploration and production as well as gas storage and processing.

The company is also the largest importer of natural gas to Poland. PGNiG is one of the oldest companies in the country. It’s revenue and profits make the company one of the biggest and the most profitable operators in Poland. PGNiG is also one of the largest employers in the country.

 


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