NATURAL GAS:

Obama set to hear Polish plea for U.S. help developing shale gas

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With President Obama scheduled to arrive in Poland today, advocates for increasing natural gas drilling in the dense shale formations underlying central Europe's largest country are pressing for more U.S. help in getting the energy boom off the ground.

Besides missile defense, Poland's foreign minister, Radoslaw Sikorski, has been talking about shale gas development in the days leading up to Obama's visit. And in Washington yesterday, a top U.S. Department of Energy official speaking at the Polish Embassy said helping Poland develop its gas resources is a priority for the United States. Obama is expected to talk with top Polish officials about U.S.-Polish partnerships to help develop the resource.

"France uses a lot of nuclear power. Other countries in the European Union don't have that in their energy mix," said Sally Kornfeld, a team leader in DOE's office of oil and gas global security supply.

"Countries to the south and east in the E.U. are strongly dependent on foreign gas for energy security considerations," she said. "Shale gas has great potential for replacing that imported gas."

The U.S. Energy Information Administration, an arm of DOE, issued an initial assessment of world shale gas resources in April. It estimated that Poland had 187 trillion cubic feet of technically recoverable gas in its shale basins, one of the largest deposits in Europe.

U.S. majors exploring Poland

Poland imported about 60 percent of the gas it consumed in 2009, nearly all of that coming from Russia. Domestic gas production has been declining since 2007, which has prompted the Polish government to offer unconventional drillers favorable royalty and fiscal terms to start tapping the shale gas reserves.

Exxon Mobil Corp. and Chevron Corp. have both secured acreage, and ConocoPhillips Co. is exploring gas potential jointly with a subsidiary of Lane Energy Poland. The nation's national gas company, PGNiG, is also sinking significant investments into exploring for shale gas.

Infrastructure and regulatory issues remain an issue, EIA noted in the report, but developing the country's massive shale deposits could "significantly increase" gas production and wean the country off of Russian supplies.

French policymakers have said they won't give the green light to unfettered shale gas development, despite significant potential in that country. Supply diversity is a critical objective of European policymakers, but the environmental impact of a drilling boom has crept into the public discussion about tapping the European shale.

"What's at stake really is the industry's license to operate," said Trevor Smith, business development manager of the Gas Technology Institute, which helped develop the horizontal drilling and hydraulic fracturing technology that has unlocked the shale deposits. "Life cycle analysis is going be much more important in Europe."

U.S. and European officials say that Europe is watching the U.S. debate about shale gas development closely. With concerns about water use and water disposal dominating the discussions, alongside industrial air and water pollution, they said there's a sense that Europe's approach on gas will evolve out of the U.S. experience.