September 3, 2008. Copyright 2008, Graphic News. All rights reserved 

Europe’s best-kept energy secrets

LONDON, September 3, Graphic News: A new source of energy supplies would be welcome news to Europe’s anxious leaders following Moscow’s military action in the Caucasus. Russia dominates European energy flows, supplying 25 percent of the EU’s natural gas. 

Now energy companies are planning to coax natural gas from huge reservoirs locked in shale deposits, deep beneath the fields of Europe. Shale gas is believed to have formed from the remains of ancient algae, plankton and fish buried in sediment during the Devonian Period, over 400 million years ago.

From January 2009, the Gas Shale Research Programme, led by Brian Horsfield and Hans-Martin Schulz of the GFZ Research Centre for Geosciences in Potsdam, Germany, will begin a six-year industry-financed study to map possible shale gas or “gash” sites in Europe.

“There’s a possibility that under our feet are the same kind of shale gas deposits that you have in the United States,” Horsfield told the International Herald Tribune. “There are many of the same types of shale formations in Europe.”

Several European projects are already underway. In April U.S. energy giant Exxon Mobil Corp. joined a venture to tap the riches hidden in Hungary’s Mako Trough, while OMV, an Austrian energy company, has begun tests of gas shale in the Vienna Basin, and Royal Dutch Shell has obtained contracts to explore in two sites in southern Sweden. In Poland, Lane Energy Poland is exploring the massive Baltic Basin.

Today’s gas rush to ring out “tight” gas from black shales has became possible with the development in the United States of advanced drilling techniques: horizontal drilling and so-called “fracing” or hydraulic fracturing.

Shale exploration poses huge challenges. The gas in the Mako Trough -- which could be as large as the massive Groningen field in the Netherlands -- is buried at depths of more than 6,000 metres (20,000 feet); six times deeper than an average gas well.

While the cost of drilling a conventional vertical well bore is about $900,000, Denver-based Falcon Oil & Gas Ltd., which has a production licence in Mako, says its wells cost up to $50 million to drill. But the rewards are equally great. Falcon estimates its licence area alone contains some 1.25 trillion cubic metres (44 trillion cubic feet) of gas worth over $350 billion -- almost as large as Britain’s total North Sea gas reserves.

To reach the gas, crews drill vertically, and then curve to a horizontal bore when they are about 200m (600ft) above the shale. To fracture the shale, millions of gallons of water mixed with sand are pumped down the drill pipe and out through jet nozzles, fracturing the shale with massive hydraulic pressure. The water and drilling mud return to the surface through the space between the pipe and the borehole, while the sand remains, holding the fractures open and releasing the gas.

Shale gas production in Europe is expected to take a decade or more before it can replace Russian supplies, but in the meantime EU leaders can ponder that Moscow needs Europe’s markets as much as Europe needs Gazprom -- European gas sales currently account for some 60 percent of Gazprom’s total revenues.
/ENDS