Fracking is going global.
The U.S. energy industry clearly still leads the way on the revolutionary
drilling method that has upended global energy markets, but the rest of the
world is beginning to catch up as nations seek to replicate American success
in oil and natural gas development.
Taking the lead in Europe, Poland plans to begin producing shale gas
using hydraulic fracturing, commonly known as fracking, as soon as next year,
the country's treasury minister said recently. More than 100 exploration
concessions to more than two dozen companies have been awarded, and the Polish
State Geological Institute estimates that the country's shale gas deposits may
secure domestic production for at least 25 years. Britain has lifted a
moratorium on fracking that was imposed after a previous operation was blamed
for sparking an earth tremor.
Argentina, the largest producer of natural gas in South America, is
eyeing the practice on a significant scale to better exploit its supply.
Fracking uses water, sand and chemicals to break underground shale
formations and release fuel. The technique has been key to economic revivals
in localities across the U.S. and has helped domestic oil and gas production
skyrocket. International competitors now want in on the action.
"Everybody around the world has taken notice the past few years. They're
taking notice and starting to wonder if they can get a part of the same energy
revolution that we have here," said Daniel Simmons, an energy scholar at the
Institute for Energy Research, a Washington-based think tank and research
organization.
In November, the independent Beijing-based publication Caixin reported on
a secret Chinese white paper saying the Asian superpower is planning a "huge
fracking industry" and that "the model for China's anticipated success is the
U.S. shale gas sector."
The same month, Fort Worth, Texas-based FTS International Inc., a leading
fracking equipment company, announced the signing of joint venture deals with
partners in Saudi Arabia and Brazil.
Saudi Arabia, in particular, has reason to examine U.S. drilling success.
The International Energy Agency recently reported that American oil production
will surpass Saudi Arabia's to become the globe's single biggest producer of
oil and natural gas as soon as 2020, putting North America on track to
becoming energy-independent.
European Pacesetter
Fracking offers a similar path for nations such as Poland, which are
dependent on foreign suppliers they do not fully trust.
"That's what is driving them to look for shale gas in that part of the
world, so they get out from under the Russians' thumb when it comes to
energy," Mr. Simmons said. "Some of those countries that are really dependent
on Russian natural gas are much pro-hydraulic fracturing."
But much like the policy and regulatory fights in the U.S., resistance to
fracking has sprung up in other parts of the world. France and Bulgaria have
banned the practice. The European Union is in the midst of a broad study on
the safety of fracking, with results expected sometime next year.
Following in the footsteps of similar American groups, Irish
environmentalist opponents of fracking have started "Fracking Free Ireland."
The group's motto: "Keep the frogs in and the frackers out."
Global organizations no longer are targeting only the U.S. in the effort
to slow down fossil-fuel development. They are expanding their efforts, keenly
aware that fracking soon will be more than an American phenomenon.
"Instead of exposing their citizens to the damages of modern drilling and
fracking, countries around the world should enact national bans on the
practice and invest aggressively in the development of energy efficiency and
renewable-energy technologies," said last year's report on fracking by the
international group Food and Water Watch.
"The oil and gas industry is now poised to take this nightmare global,"
the study said.
Green Pushback
In the U.S., those environmental forces have had limited success. They
have staged countless protests and put a great deal of political pressure on
officials such as New York Gov. Andrew Cuomo, a Democrat, who is weighing
whether to allow fracking in his state.
Those forces also created pressure that led to fracking bans in Vermont
and cities including Buffalo, N.Y., and Pittsburgh. Beyond that, though, their
success mostly has been limited to holding raucous demonstrations and mounting
public relations campaigns.
Not so in Europe, analysts say, where the "green" movement is an
effective political apparatus that spearheaded the French and Bulgarian
fracking moratoriums.
"It's more organized, more focused. They've been able to gain more
political traction that has not been seen here," said Kenneth B. Medlock III,
an energy and resource economics fellow at Rice University's Baker Institute.
"Environmental motives have been very strong, and they've been very
successful in trying to steer not just European Union energy policy, but
individual countries' energy policies," Mr. Medlock said.
Some already are warning that Europe may miss out on a global energy
revolution if the green forces on the Continent prevail.
"Some European countries already made the decision not to go into shale
gas, so naturally when they do that there will not be development," Mohamed
al-Mady, chief executive of Saudi petrochemical giant Sabic, told the
Financial Times newspaper. "I think the trend you will see [is] more investors
going to North America, China and the Middle East."
As in the U.S., Mr. Medlock said, it comes down to "political geography"
more than anything else. A ban on fracking in Vermont was relatively easy to
achieve because the state is thought to have little in the way of recoverable
natural gas.
The same holds true in a country such as France, Mr. Medlock said. For
Poland and others, where fracking likely will lead to tangible energy
benefits, critics will continue to have a tougher time mounting serious
opposition.
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Distributed by MCT Information Services
