Europe’s unconventional gas reserves could make a significant contribution to energy supplies over the next 10 to 15 years if challenges to exploration and production are overcome, according to a new report.
Consulting firm IHS CERA estimates that the size of Europe’s unconventional commercial gas reserves rival that of North America, where exploration of so-called shale gas reserves has lead to a boom in production and made the market nearly self-sufficient.
In a new study, IHS CERA says that Europe’s unconventional gas reserves could total 173 trillion cubic metres (tcm). Exploitation of these reserves would help to alleviate fears over security of supply in the region.
“The technological revolution in unconventional gas has been the single most important energy innovation so far this century,” said IHS CERA Chairman and author of the Pulitzer-Prize winning book, The Prize, Daniel Yergin. “Its tremendous potential has already transformed North America’s energy landscape and may now transform the global gas industry.”
Unconventional gas includes reserves locked in shale formations as well as coal bed methane and can be difficult to exploit because the reserves may be dispersed over a wide area. Advanced technologies such as well stimulation or hydraulic fracturing are often required for the gas to be extracted, according to the American Petroleum Institute (API).
According to the IHS CERA report, Breaking with Convention: Prospects for European Unconventional Gas, Europe could see production levels reaching 60-200 billion cubic metres (bcm) by 2025. Unconventional gas production would have “significant” impacts on the dynamics of gas markets in both Europe and Asia.
“Unlike in the United States – where the revolution in unconventional gas production has made the market nearly self-sufficient – unconventional volumes of gas in Europe are likely to keep domestic supplies stable in the face of declining conventional production,” said Jan Roelofsen, IHS Global Senior Product Manager.
However, Europe must overcome a number of challenges before large-scale production can begin. “Regulations designed for traditional exploration and production have not been adapted to reflect the character of unconventional gas,” said Jonathan Parry, IHS CERA global gas director.
“But there are significant challenges ahead, including uncertainties over length of tenure, permitting regimes and norms and water management, among others.”
Current shale gas production in North America stands at over 120 bcm, says IHS CERA. The natural gas boom in that region has caused controversy because of fears that hydraulic fracturing – or “fracking” – extraction techniques have caused environmental damage and contaminated drinking water supplies.