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| As Drilling Practice Takes Off in U.S., Europe Proves Hesitant | As Drilling Practice Takes Off in U.S., Europe Proves Hesitant |
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| LONDON — France and Bulgaria have already banned it, and in Britain the government’s attempts to promote it have led to heated demonstrations in the countryside. It is complicating Germany’s attempts to wean itself from fossil fuels and forcing Russia to recalibrate the energy-export strategy that sustains its economy. | LONDON — France and Bulgaria have already banned it, and in Britain the government’s attempts to promote it have led to heated demonstrations in the countryside. It is complicating Germany’s attempts to wean itself from fossil fuels and forcing Russia to recalibrate the energy-export strategy that sustains its economy. |
| Hydraulic fracturing, or fracking, has already revolutionized the energy business in the United States, which is now 87 percent self-sufficient for gas, and it is transforming environmental policy, too. | Hydraulic fracturing, or fracking, has already revolutionized the energy business in the United States, which is now 87 percent self-sufficient for gas, and it is transforming environmental policy, too. |
| Now the temptation to follow the United States in extracting shale gas from rock on a large scale is presenting Europe with contentious trade-offs that could affect the Continent’s economic competitiveness, test its commitment to curbing climate change and determine its place in a 21st-century version of the Great Game. | Now the temptation to follow the United States in extracting shale gas from rock on a large scale is presenting Europe with contentious trade-offs that could affect the Continent’s economic competitiveness, test its commitment to curbing climate change and determine its place in a 21st-century version of the Great Game. |
| The early signs are that densely populated Europe, with citizens generally more sensitive to environmental concerns and more willing to tolerate high energy costs, is unlikely to embrace the technique as the Americans have. As an indication of the skepticism, European Union lawmakers gave initial approval on Wednesday to a measure requiring companies to conduct extensive environmental audits before fracking for shale gas. | |
| In Britain, near Balcombe in West Sussex, up to 1,000 demonstrators set up a tent camp this summer to protest test drilling by the energy company Cuadrilla in what became a symbol of opposition to fracking. More than 100 people were arrested, including a member of Parliament from the Green Party, Caroline Lucas. The company removed its test rig and left the site in late September, but protesters like Ewa Jasiewicz from the group No Dash for Gas promised further protests if Cuadrilla returned. | |
| Europe uses natural gas for about 24 percent of its energy — similar to the 28 percent in the United States. But gas from fracking represents only 0.1 percent of the total energy supply, compared with 15 percent in America. | Europe uses natural gas for about 24 percent of its energy — similar to the 28 percent in the United States. But gas from fracking represents only 0.1 percent of the total energy supply, compared with 15 percent in America. |
| In France as well as Britain, public debates over fracking have been mirrored by disputes in the government over competing concerns about economic growth, energy security and environmental protection. Poland is pressing ahead with fracking, eager to lessen its dependence on Russia as a supplier. France’s two-year-old ban on fracking is facing a constitutional court challenge and growing pressure from energy companies. But in some ways the debate is just getting going — and Europe is already confronting the implications of the choices it has made so far. | In France as well as Britain, public debates over fracking have been mirrored by disputes in the government over competing concerns about economic growth, energy security and environmental protection. Poland is pressing ahead with fracking, eager to lessen its dependence on Russia as a supplier. France’s two-year-old ban on fracking is facing a constitutional court challenge and growing pressure from energy companies. But in some ways the debate is just getting going — and Europe is already confronting the implications of the choices it has made so far. |
| With shale gas altering the global energy equation, how to balance the triangle of energy security, climate change and economic efficiency is a kind of “energy trilemma,” said Heather Haydock of Ricardo-AEA, an energy and environmental consulting company. | With shale gas altering the global energy equation, how to balance the triangle of energy security, climate change and economic efficiency is a kind of “energy trilemma,” said Heather Haydock of Ricardo-AEA, an energy and environmental consulting company. |
| The issue is another focal point in the more general debate in Europe over how far to go in reducing reliance on carbon fuels, a movement that is much further along than in the United States. | The issue is another focal point in the more general debate in Europe over how far to go in reducing reliance on carbon fuels, a movement that is much further along than in the United States. |
| “There is a lot of oil and gas all over the world, so having access to shale gas is better for your trade balance but doesn’t change the energy equilibrium in Europe,” said Christophe de Margerie, the chief executive of Total, the global energy company based in France. “People think that access to shale will produce the same effect as in the United States, and it’s not true.” | “There is a lot of oil and gas all over the world, so having access to shale gas is better for your trade balance but doesn’t change the energy equilibrium in Europe,” said Christophe de Margerie, the chief executive of Total, the global energy company based in France. “People think that access to shale will produce the same effect as in the United States, and it’s not true.” |
| Given political constraints, population density and the difference in land ownership — individual landowners in Europe generally do not own mineral rights under their land — the model in Europe will be different, he said. | Given political constraints, population density and the difference in land ownership — individual landowners in Europe generally do not own mineral rights under their land — the model in Europe will be different, he said. |
| “But the issue is not shale gas,” about which there is a great deal of fear and ignorance, Mr. de Margerie said. “People are against carbon, against fossil fuels, and we are missing important opportunities.” | “But the issue is not shale gas,” about which there is a great deal of fear and ignorance, Mr. de Margerie said. “People are against carbon, against fossil fuels, and we are missing important opportunities.” |
| The increase in American natural gas supplies has already meant that American coal, displaced by cheap gas in American power plants, is being exported cheaply to Europe in large amounts, despite its deleterious impact on air quality and carbon dioxide emissions. With the European economy largely still in the doldrums, energy demands are lower, carbon credits are plentiful and cheap, and coal ends up being one-seventh or one-eighth as expensive to use as natural gas. | The increase in American natural gas supplies has already meant that American coal, displaced by cheap gas in American power plants, is being exported cheaply to Europe in large amounts, despite its deleterious impact on air quality and carbon dioxide emissions. With the European economy largely still in the doldrums, energy demands are lower, carbon credits are plentiful and cheap, and coal ends up being one-seventh or one-eighth as expensive to use as natural gas. |
| In Germany, the success of fracking in the United States has actually led to a greater reliance on coal. Germany is undergoing a great “energiewende,” an energy transition, from nuclear and fossil fuels to subsidized, renewable energy from wind and the sun. | In Germany, the success of fracking in the United States has actually led to a greater reliance on coal. Germany is undergoing a great “energiewende,” an energy transition, from nuclear and fossil fuels to subsidized, renewable energy from wind and the sun. |
| But these sources are intermittent and insufficient, and Germany’s decision to eliminate its nuclear plants led it to bring coal-fired power plants out of mothballs to make up the difference. Doing so was a viable option because coal demand in the United States has dropped sharply as American power plants have turned to less expensive gas, driving down the cost of American coal for export to global markets. | But these sources are intermittent and insufficient, and Germany’s decision to eliminate its nuclear plants led it to bring coal-fired power plants out of mothballs to make up the difference. Doing so was a viable option because coal demand in the United States has dropped sharply as American power plants have turned to less expensive gas, driving down the cost of American coal for export to global markets. |
| As a result, carbon dioxide emissions in Germany went up last year, not down. | As a result, carbon dioxide emissions in Germany went up last year, not down. |
| “The tragedy of gas is that it’s the perfect fuel for the energiewende, but it’s too expensive,” said Kirsten Westphal, an energy expert with SWP, the German Institute for International and Security Affairs, in Berlin. Future demand for gas in Europe is uncertain, Ms. Westphal said, because of improvements in insulating homes, many of which are heated by gas, and the concentration on renewables, which are becoming the priority. | “The tragedy of gas is that it’s the perfect fuel for the energiewende, but it’s too expensive,” said Kirsten Westphal, an energy expert with SWP, the German Institute for International and Security Affairs, in Berlin. Future demand for gas in Europe is uncertain, Ms. Westphal said, because of improvements in insulating homes, many of which are heated by gas, and the concentration on renewables, which are becoming the priority. |
| Without an accelerating demand for gas, there is less incentive for companies to invest in fracking technology, given its cost. And given the increasing use of so-called intermittent energy sources like the wind and sun, and no expectation of a sudden spurt in economic growth, the European demand for gas is hard to predict — another negative for companies thinking of investment in fracking. | Without an accelerating demand for gas, there is less incentive for companies to invest in fracking technology, given its cost. And given the increasing use of so-called intermittent energy sources like the wind and sun, and no expectation of a sudden spurt in economic growth, the European demand for gas is hard to predict — another negative for companies thinking of investment in fracking. |
| The European Union is working to “decarbonize” its energy supplies, a long-term goal, but there are continuing battles between ministries that emphasize economic growth and competitiveness and those that emphasize reducing carbon emissions. | The European Union is working to “decarbonize” its energy supplies, a long-term goal, but there are continuing battles between ministries that emphasize economic growth and competitiveness and those that emphasize reducing carbon emissions. |
| In Britain, for example, the Treasury is in favor of shale exploration to bring down domestic prices and increase energy security, while the Department of Energy and Climate Change “is very dubious, and it’s a major battle,” said Paul Stevens, an energy expert at Chatham House, a research institute based in London. | In Britain, for example, the Treasury is in favor of shale exploration to bring down domestic prices and increase energy security, while the Department of Energy and Climate Change “is very dubious, and it’s a major battle,” said Paul Stevens, an energy expert at Chatham House, a research institute based in London. |
| The impact on Russia and its economic relationships across Europe is also substantial. | The impact on Russia and its economic relationships across Europe is also substantial. |
| “Without shale gas, this would be a world where Russia would have very, very strong market power and there would be very strong dependency on gas supply from geopolitically risky regions in the Middle East, Iran and North Africa,” said Laszlo Varro, the director of the Gas, Coal and Power Markets Division of the International Energy Agency. | “Without shale gas, this would be a world where Russia would have very, very strong market power and there would be very strong dependency on gas supply from geopolitically risky regions in the Middle East, Iran and North Africa,” said Laszlo Varro, the director of the Gas, Coal and Power Markets Division of the International Energy Agency. |
| Gazprom, the huge Russian gas company, finds its traditional business model in trouble. Under the pressure of a market in which gas is being supplied from more places, Gazprom has had to renegotiate gas contracts with European countries, costing it $6 billion, Mr. Varro said. | Gazprom, the huge Russian gas company, finds its traditional business model in trouble. Under the pressure of a market in which gas is being supplied from more places, Gazprom has had to renegotiate gas contracts with European countries, costing it $6 billion, Mr. Varro said. |
| Shale gas, especially from Poland, will only make the situation for the Russian company more difficult, and Gazprom has been outspoken in opposing its development in Europe. | Shale gas, especially from Poland, will only make the situation for the Russian company more difficult, and Gazprom has been outspoken in opposing its development in Europe. |
| “Gazprom is not against shale gas,” Mr. Stevens said, “it’s just against everyone else having it.” | “Gazprom is not against shale gas,” Mr. Stevens said, “it’s just against everyone else having it.” |
| Russian gas will continue to have a large role in Europe’s future, especially in Germany and Eastern Europe. But the relative Gazprom-Russian stranglehold is broken, meaning that its ability to pressure these countries politically has been diminished. | Russian gas will continue to have a large role in Europe’s future, especially in Germany and Eastern Europe. But the relative Gazprom-Russian stranglehold is broken, meaning that its ability to pressure these countries politically has been diminished. |
| Fyodor Lukyanov, a Russian analyst and editor of the quarterly journal Russia in Global Affairs, said, “Gazprom is in trouble, and new developments in the European gas market will lead to a reorientation toward Asia.” | Fyodor Lukyanov, a Russian analyst and editor of the quarterly journal Russia in Global Affairs, said, “Gazprom is in trouble, and new developments in the European gas market will lead to a reorientation toward Asia.” |
| Will Pearson, director of global energy and natural resources at the Eurasia Group, a political risk consultancy, said he believed that Russia was already pressuring Bulgaria to forgo fracking and Lithuania to stop trying to diversify its energy sources. | Will Pearson, director of global energy and natural resources at the Eurasia Group, a political risk consultancy, said he believed that Russia was already pressuring Bulgaria to forgo fracking and Lithuania to stop trying to diversify its energy sources. |
| As Europe becomes a more “contestable market” with more integrated pipelines, more liquefied natural gas and more shale gas, behavior will change. “If people can come in easily, the threat of coming in will make the monopolist behave differently,” Mr. Stevens said. | As Europe becomes a more “contestable market” with more integrated pipelines, more liquefied natural gas and more shale gas, behavior will change. “If people can come in easily, the threat of coming in will make the monopolist behave differently,” Mr. Stevens said. |
| Still, Mr. Varro said, Gazprom has been flexible, renegotiating contracts. “The Russians are not really afraid of shale gas in Europe, and they’re probably right,” he said, given all the obstacles. “There’s lots of excitement in Poland and the U.K., but even in Poland, two years’ production is one week of Eagle Ford in Texas,” a shale formation. “And in the U.K., the gas industry produces more Financial Times editorials than gas.” | Still, Mr. Varro said, Gazprom has been flexible, renegotiating contracts. “The Russians are not really afraid of shale gas in Europe, and they’re probably right,” he said, given all the obstacles. “There’s lots of excitement in Poland and the U.K., but even in Poland, two years’ production is one week of Eagle Ford in Texas,” a shale formation. “And in the U.K., the gas industry produces more Financial Times editorials than gas.” |
| Europe is moving toward a future where the main role of gas and coal will be to support renewables, Mr. Varro said. And there is no reason to expect coal to disappear, given the changing market, coal exports from the United States and new carbon-capture technologies. New emission standards will essentially prohibit new coal-fired power stations in the United States, Mr. Varro said. | Europe is moving toward a future where the main role of gas and coal will be to support renewables, Mr. Varro said. And there is no reason to expect coal to disappear, given the changing market, coal exports from the United States and new carbon-capture technologies. New emission standards will essentially prohibit new coal-fired power stations in the United States, Mr. Varro said. |
| “In a world without shale gas,” he said, “that would be politically impossible.” | “In a world without shale gas,” he said, “that would be politically impossible.” |
Kimiko de Freytas-Tamura contributed reporting. | Kimiko de Freytas-Tamura contributed reporting. |