Sunday, 11 September 2011

Russian energy giant Gazprom scared by the shale gas revolution

The US-led shale gas revolution seems to have scared the pants off  Russian energy giant Gazprom´s top leaders. The Telegraph´s Rowina Mason went to a press conference in London:

So how does Gazprom react? Under threat, it’s gone into battle against shale on all fronts – cooking up as many reasons as it can why the technology is an ugly prospect. At a press conference in London this week, a long row of impassive Gazprom executives watched as their head of export, Alexander Medvedev, sharpened his knives against shale.
It’s a danger to drinking water, he tells us. “Every American housewife is aware of shale gas, but not every housewife is aware of the environmental consequences of the use of shale gas. I don’t know who would take the risk of endangering drinking water reservoirs.”
Nice of him to show such altruistic concern for their health, but an Environmental Protection Agency report will soon demonstrate whether there are real risks of contamination.

Then there’s the question of economic viability, of course. A Gazprom official described shale’s margins as a joke, saying there was no way it would be able to match the prices of conventionally-produced gas.
Add to this Gazprom’s warning to the US that it is already beginning to redirect its affections elsewhere. The company recently signed a long-term supply contract with China, and is likely to nurture this relationship if it believes the rapidly industrialising country’s need for gas imports will be steadier in the future.
What about the possibility that Europe could head into the shale revolution? This is “almost unimaginable”, says Mr Medvedev. The cautious Europeans would never be as gung-ho as the Americans without proper evidence of shale’s commerciality.
The effect of this offensive: it doesn’t look good for Gazprom. It may claim to be “unconcerned” about the threat of shale gas, but it has, after all, been forced to delay its Shtokman field for three years, owing to depressed demand. And by complaining so loudly, with such a variety of different objections, it simply suggests that the Russian company considers shale much more real and imminent competition than it would like to admit.

Read the entire article here

The fact that the Gazprom top leaders are engaging in this kind of cheap propaganda against shale gas exploration clearly proves that they - and their masters in the Kremlin - are deeply worried. And they should be, because soon they will not any more be able to dominate the European - and international - gas market. 

Still it is surprising to see how primitively these supposedly top managers are conducting their propaganda campaign. Or maybe it is not so surprising - these are leaders who have been chosen, not by business professionals, but by the likes of  Mr. Putin and his henchmen in the Kremlin.

Now it is up to the Poles (and some other European future shale gas producers) and the Americans to see to it that the Russians do not succeed in their efforts - together with the greenies - to prevent or slow down the shale gas revolution in Europe.


EU energy commissioner, German Günther Oettinger a few days ago told a Polish audience about the plans to regulate shale gas exploration:

"I think we'll get a high level of acceptance when we have the same, European common standards, a high level of safety and security and quality for environmental interests," Oettinger told reporters during a visit to Wroclaw in southwest Poland.
"The best way is to Europeanise standard-efforts. We will bring some proposals to our member states maybe in the spring next year," he added.

The Poles must not let Gazprom and the greenies dictate the rules

1 comment:

Jaylor said...

A really interesting piece. Somehow I always appreciate Russian crudeness, I mean directness, in pursuit of their interests. At least you know where they stand. And no surprise that Poland is pushing in the other direction on shale... having multiple pipelines circling around but not crossing Polish territory must be a spur to some action. The EU doesn't seem like the best forum to get expedient regulatory standards though. Shouldn't they move on their own?