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The Ukraine Has 25% of the World’s Proven Natural Gas Reserves

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COMMENT: A factor that is central to the Ukrainian situation is that country’s natural gas reserves. The Ukraine has a quarter of the world’s proven natural gas reserves. Those reserves may well be seen as the answer to the EU’s energy situation.

We wonder if the Fischer-Tropsch process might be used to derive motor fuel from that natural gas, as is being done in the Muslim Brotherhood-affiliated nation of Qatar.

“This Oil Giant Could Get Crushed by Ukraine” by Lawrence Lewitinn; Yahoo News; 3/06/2014.

 EXCERPT: Once known as the “Breadbasket of Russia“, Ukraine is now also Russia’s fuel tank. And, one American company has 10 billion reasons to hope nothing goes wrong.

Ukraine sits on 39 trillion cubic feet of natural gas reserves. That’s about one-quarter the world’s entire proven reserves. . . .

Discussion

9 comments for “The Ukraine Has 25% of the World’s Proven Natural Gas Reserves”

  1. When the Germans were doing Fischer-Tropsch the Allies already had the Kerrich process(very clean) which is superior, several newer and better coal to oil conversion technologies have been created since. Coal, of course, possesses 13 times more extractable energy from it’s Thorium content than burning it.

    Posted by Chris | March 11, 2014, 8:17 am
  2. @Chris–

    There is no such thing as the “Kerrich” process for fuel production, as far as can be determined.

    There IS the KARRICK process, which the Allies possessed.

    With a catalyst, Fischer-Tropsch becomes more viable.

    Note that Qatar has invested billions in just such technology.

    Note also that ThyssenKrupp bought the Leuna plant in the late 1990’s.

    WHY do you think Qatar and ThyssenKrupp behaved as they have?

    Cheers,

    Dave

    Posted by Dave Emory | March 11, 2014, 6:44 pm
  3. SPIEGEL ONLINE
    03/11/2014 11:34 AM
    Help from Germany
    Firms Could Soon Provide Gas to Ukraine

    By Frank Dohmen

    Ukraine’s dependence on gas from Russia has often been used as a political weapon by Moscow in conflicts with its neighbor. German companies are now considering how Western European gas could be rerouted to Kiev if the Kremlin decides to cut supplies.

    In geopolitical disputes between Moscow and Kiev, natural gas is a frequent tool used by the Russians to bring Ukraine back into political line. With frigid winter temperatures, Ukraine is heavily reliant on Russian gas to provide heating, and in recent years, the Russians have twice cut off gas supplies to the country.

    That eventuality could play a role in the current crisis. Now Germany’s major energy utility companies are developing strategies to help Ukraine fill the shortfall if Moscow decides to cut gas supplies. Companies including RWE and E.on are working on plans to supply Ukraine with weeks’ worth of gas.

    Currently, Ukraine taps around half of it gas needs from Russia. But last Friday, Russian Gas monopolist Gazprom threatened to suspend deliveries to Ukraine if the country doesn’t pay its outstanding February bill of €1.7 billion ($2.35 billion).

    In an emergency, the flow through Europe’s pipelines could simply be reversed, with gas getting pumped from German reservoirs through the Czech Republic and Slovakia directly to Ukraine. Following this year’s especially mild winter, Germany’s reservoirs are much fuller than usual. Even long-term deliveries would be conceivable at the moment.

    Ukraine already signed a framework agreement in 2012 with RWE to make the gas deliveries possible. Under the contract, the company has committed itself to delivering up to 10 billion cubic meters of gas per year to Ukraine, which the country was going to use this summer to fill its reservoirs for the coming winter. But RWE executives say they could provide deliveries much sooner.

    RWE currently draws its gas from Norway or the Netherlands, both major suppliers in Western Europe. It would also be possible to redirect Russian gas from the Nord Stream Baltic Sea pipeline — which connects Russia and Germany — through pipelines in the Czech Republic and Slovakia to Ukraine. The Russians have included provisions in their supply contracts with Germany prohibiting such redirection, but a high-ranking energy utility executive told SPIEGEL these clauses are easily circumvented. “Once gas has been delivered to a storage facility, it is impossible to determine where it came from,” the source said.

    Around 35 percent of natural gas supplies in Germany originate from Russia, but that energy dependence could soon wane as a result of controversial fracking technologies in the United States. The country is currently extracting so much natural gas that it may soon begin exporting it in large volumes.
    URL:

    http://www.spiegel.de/international/germany/german-companies-prepare-plans-to-supply-ukraine-with-gas-a-957988.html

    Posted by Vanfield | March 12, 2014, 1:32 pm
  4. http://www.naturalgaseurope.com/ukraine-russia-natural-gas-andrs-jenei

    Excerpt:

    Russian control over the Crimean Peninsula – beside the fact that it would solve the ethnic problem and the question of the fleet – would create a brand new situation regarding the oil and gas market, because the stakes are high: if Crimea falls under Russian authority, Russia will be able to greatly expand its borders in the Black Sea, among others, to the three enormous oil and gas field that can be found next to Crimea.

    Furthermore, there is a tremendous amount of gas under the shallow waters of the Sea of Azov, as there are fields with great potential to the southeast and to the west of Crimea as well. Each one of the hydrocarbon locations can be found on the shallow continental shelf, which has the advantage of the significantly cheaper extraction of the oil and gas there, compared to the deeper parts of the Black Sea.

    American and Italian companies have concessions in these territories, but their terms were made with the Ukrainian state, and the creation of a Russian enclave similar to Kaliningrad would create a rather sensitive legal situation. Additionally, the Ukrainian leadership knows well the importance of these territories, as beside the unconventional terrestrial utilization of natural gas, the Black Sea locations form one of the keystones of their energy strategy. So Kiev will fight for the Crimean Peninsula tooth and nail, not only because of its sovereignty, but because of its hydrocarbon treasures as well.

    Posted by Vanfield | March 12, 2014, 3:04 pm
  5. Even a stopped clock is right twice a day. Unless the clock was a gift from the energy lobby. Those are wrong all the time:

    The Nation
    How the Gas Lobby Is Using the Crimea Crisis to Push Bad Policy and Make More Money
    Lee Fang on March 20, 2014 – 11:14 AM ET

    A small group of pundits and politicians with close ties to the fossil fuel industry are using the crisis in Crimea to demand that the United States promote natural gas exports as a quick fix for the volatile situation. But such a solution, experts say, would cost billions of dollars, require years of development, and would not significantly impact the international price of gas or Russia’s role as a major supplier for the region. Rather, the move would simply increase gas prices for American consumers while enriching companies involved in the liquified natural gas (LNG) trade.

    Paul Bledsoe, in an opinion column for Reuters, wrote that the US should expedite natural gas exports to “bolster transatlantic solidarity and help to form a united US-EU response to Russian intervention in Crimea.” He was identified in the piece as a member of the “White House Climate Change Task Force under President Clinton.” What wasn’t disclosed, however, is that Bledsoe is an official with a pro-fossil fuels think tank called the Bipartisan Policy Center, which is funded by the American Gas Association and energy companies with a financial stake in promoting the natural gas industry. (Although he’s not listed on the website, a representative with BPC told Republic Report that Bledsoe continues to work there.)

    Groups created and funded by Charles Koch, chief executive of Koch Industries, have also demanded that America should respond to the crisis in Crimea with LNG exports. “A serious President would also fast-forward permits on new liquefied natural gas terminals that could ship to Europe,” claims a column posted by Americans for Prosperity, a Koch-run advocacy group. A similar argument is advanced by the Koch-founded Cato Institute.

    What’s left undisclosed, however, is the huge financial stake in the debate for Koch Industries. A brochure for the company shows that Koch has deeply expanded its footprint into the natural gas market, and is now actively engaged in shipping, sourcing and marketing LNG, in addition to becoming a leader in developing financial instruments related to natural gas. “To complement existing North American activities from Houston and to optimize their global portfolio, KS&T companies are expanding a Europe-wide natural gas business from Geneva and an LNG trading business from offices in Houston and London,” reads the document. Further, Koch federal lobbying disclosures show that the firm has pushed a bill to expedite LNG exports from America to NATO countries.

    In perhaps the most ironic twist of this public debate around how to respond to Russia’s incursion into Crimea, American lobbyists with ties to Russia are calling for a solution that would not only shield Russian gas oligarchs, but enrich them. The National Association of Manufacturers has opposed tough sanctions on Russia. Instead, NAM has used the crisis in Ukraine to “urge speedier approval of liquified natural gas exports, arguing that the move would weaken Vladimir Putin’s control over Europe’s energy supply.” NAM’s chief lobbyist Jay Timmons told Politico that an LNG-export response would “send a strong signal to the Russian Federation, our NATO allies, our trading partners and the rest of the world that energy exports matter and are a critical tool of American foreign policy.”

    What Timmons did not mention is that ExxonMobil is a leading member of his trade association, and that ExxonMobil has extensive ties to Russian gas giants, including partnerships to develop natural gas in the United States and around the world. (For more on the business ties, see Kert Davies and Steve Horn’s recent reporting on the Putin-sanctioned alliance between ExxonMobil and Russian state-owned oil and gas giant Rosneft.) In short, Timmons’ strong signal to Russia would help Russian gas businesses.

    One of the contemporary global tragedies is the way in which the powerful always seem poised to become even more powerful no matter what happens. More austerity for the rabble, more billions for the billionaires. Always.

    Although, to be fair, the elites experience tragedies too

    Posted by Pterrafractyl | March 20, 2014, 12:05 pm
  6. You’d think someone with Condi’s talent at beating the war drums would have a better sense of timing:

    Washington Post
    Condoleezza Rice: U.S. can’t afford to be war-weary

    By Aaron Blake
    March 27 at 11:09 pm

    Former secretary of state Condoleezza Rice says that American leaders need to resist the temptation to become weary of war, according to a report of her remarks at a fundraiser.

    “I fully understand the sense of weariness,” she told a GOP fundraiser Wednesday, according to reports. “I fully understand that we must think: ‘Us, again?’ I know that we’ve been through two wars. I know that we’ve been vigilant against terrorism. I know that it’s hard. But leaders can’t afford to get tired. Leaders can’t afford to be weary.

    President Obama has made clear in recent weeks that the Russian incursion into Ukraine’s Crimean peninsula doesn’t yet call for military intervention, and unlike the conflict in Syria, Obama hasn’t broached the concept of using force in Ukraine.

    As with the conflict in Syria, polls show the American people are highly resistant to military action in Ukraine — especially after lengthy wars in Iraq and Afghanistan.

    Rice said the United States has taken a step back in conflicts including Syria, Ukraine and others.

    “When America steps back and there is a vacuum, trouble will fill that vacuum,” Rice said.

    Yes, “‘Us, again?’…leaders can’t afford to get tired. Leaders can’t afford to be weary”. That’s sure some inspiring leadership.

    Posted by Pterrafractyl | March 28, 2014, 9:48 am
  7. Look what idea just got floated by Poland’s Prime Minister and positively received by Angela Merkel and Jean-Claude Juncker: an EU Energy Union:

    UPDATE 1-Merkel tells Putin Russia has not done enough to ease Ukraine crisis

    Fri Apr 25, 2014 11:05am EDT

    * Merkel says EU, G7 to consider more ‘second stage’ sanctions

    * Criticises lack of Russian implementation of peace deal (Adds quotes from Polish PM Donald Tusk)

    By Alexandra Hudson and Erik Kirschbaum

    BERLIN, April 25 (Reuters) – Germany’s Angela Merkel said on Friday that she had told Russian President Vladimir Putin by telephone that Moscow had not done enough to urge separatists in Ukraine to disarm, and that further sanctions against Russia must be contemplated.

    The European Union and Group of Seven (G7) nations would consider sanctions “within the framework of the second stage of sanctions” she said at a news conference in Berlin with Poland’s Prime Minister Donald Tusk, referring to a three-stage scheme.

    The second stage of sanctions comprises overseas asset freezes and visa bans on those Russians and Ukrainians considered responsible for the escalation. Dozens of individuals are already on the list. Stage three, under preparation, would involve trade and economic sanctions against Moscow.

    Under the terms of the deal Russia, the United States, Ukraine and the EU agreed to work to disarm illegal groups.

    “Russia has the power, or could have the power, to bring the separatists on to a peaceful path of discussions about the constitution and preparations for elections, but such signals are unfortunately lacking,” Merkel said.

    Poland’s Tusk warned: “The crisis in Ukraine may become permanent, which could require a new eastern policy from Europe”. He added he could not imagine Europe sticking to a “business-as-usual” position.

    Tusk has urged the EU to create an energy union to secure its gas supply and weaken its current dependence on Russian gas.

    Jean-Claude Juncker, a candidate for European Commission president, was quoted by Polish state agency PAP on Friday as saying that the energy union proposal was “an intelligent and wise proposal”.

    Merkel said she supported the idea in principle but the details would need to be worked out and a joint market and joint structure was necessary.

    Oh wow, what could this Energy Union involve? A central EU agency for buying natural gas for all 28 EU members? How about all that plus a lot more fracking?

    Polish PM calls for EU energy union to end dependence on Russian gas

    By Jan Strupczewski

    BRUSSELS, April 21 Mon Apr 21, 2014 5:52pm EDT

    (Reuters) – The European Union must create an energy union to secure its gas supply because the current dependence on Russian energy makes Europe weak, Poland’s Prime Minister Donald Tusk wrote in an article in the Financial Times.

    Russia, which provides around one third of the EU’s oil and gas, sent shockwaves through the international community with its military intervention and annexation of Ukraine’s Crimea peninsula in March.

    The action prompted the United States and its European allies to begin imposing sanctions on President Vladimir Putin’s inner circle and to threaten to penalise key sectors of Russia’s economy if Russia escalates tensions with Ukraine.

    An international agreement to avert wider conflict in Ukraine was faltering on Monday, with pro-Moscow separatist gunmen showing no sign of surrendering government buildings they have seized in the east of the country.

    “Regardless of how the stand-off over Ukraine develops, one lesson is clear: excessive dependence on Russian energy makes Europe weak,” Tusk wrote in the article.

    He noted that the EU was creating a banking union, with a single supervisor, and a single resolution mechanism and fund to close down failing institutions.

    The EU was also already jointly buying uranium for its nuclear power plants. The approach to Russian gas should be the same, he said.

    “I therefore propose an energy union. It will return the European Community to its roots,” he said.

    Such a union should be based on several elements, he said, the first of which would be the creation of a single European body that would buy gas for the whole 28-nation bloc.

    Another would be that if one or more EU countries were threatened with being cut off from gas supplies, the others would help them through “solidarity mechanisms”.

    MORE GAS STORAGE, LINKS

    The EU must also help finance, even up to 75 percent of the value of such projects, gas storage capacity and gas links in countries which are now most dependent on Russian gas sold by the state-owned Russian gas monopoly Gazprom.

    “Today, at least 10 EU member states depend on a single supplier – Gazprom – for more than half of their consumption. Some are wholly dependent on Russia’s state-controlled gas giant,” Tusk said.

    The fourth element was the full use of the EU’s existing fossil fuels, including coal and shale gas.

    “In the EU’s eastern states, Poland among them, coal is synonymous with energy security. No nation should be forced to extract minerals but none should be prevented from doing so – as long as it is done in a sustainable way,” Tusk said.

    The next element of the energy union would be to sign agreements to buy gas from exporters outside Europe – like the United States or Australia. It could be transported to Europe by ship in liquefied form, Tusk said.

    Finally the EU should strengthen the existing Energy Community of the EU and eight of its eastern neighbours, created in 2005 to extend the European gas market eastward.

    “True, this will require Europe’s governments to take a unified position. But such feats of co-ordination have been achieved before,” Tusk said.

    European leaders already agreed in March to accelerate their quest for more secure energy supplies in response to Moscow’s annexation of Crimea and asked the executive European Commission to draw up detailed proposals by June on how to do that.

    The EU has made progress in improving its energy security since gas crises in 2006 and 2009, when rows over unpaid bills between Kiev and Moscow led to the disruption of gas exports to western Europe. But so far, EU reliance on imported oil and gas, especially from Russia, has been rising, not falling.

    Note that France is on board with the idea too, so we have leaders of Germany and France both backing the idea which means it’s probably just a matter of time before the EU Energy Union becomes reality and all EU states have their gas flows managed by a central authority. And since the plan also calls for the EU to ‘strengthen’ the existing Energy Community of the EU “eastward”, this suggests that Ukraine is also intended to be part of the new EU “Energy Community” whether or not it’s an EU member (since the “community” already includes non-EU members).

    One of the interesting quirks in this plan is that it isn’t just a plan to set up a single entity to manage the natural gas market. It’s also a plan to set up a single buyer for EU natural gas. That’s what Poland’s PM explicitly called for: An EU monopsony buyer to counter Russia’s power as the major EU supplier:

    Financial Times
    April 21, 2014 1:37 pm
    A united Europe can end Russia’s energy stranglehold
    An energy union could restore competition, says Donald Tusk

    By Donald Tusk

    Regardless of how the stand-off over Ukraine develops, one lesson is clear: excessive dependence on Russian energy makes Europe weak. And Russia does not sell its resources cheap – at least, not to everyone.

    This, of course, is basic economics. A dominant supplier has the power to raise prices and reduce supply. The way to correct this market distortion is simple. Europe should confront Russia’s monopolistic position with a single European body charged with buying its gas.

    Once this has been achieved, Europe should undertake the lengthier task of breaking up the Russian gas monopoly and restoring free market competition. True, this will require Europe’s governments to take a unified position. But such feats of co-ordination have been achieved before.

    Now, there’s nothing inherently wrong with a monopsony, especially when it’s a monopsony operating on behalf of the public interest. But one of the looming conflicts over this general plan appears to be the fact that the EU is going to try to drive down natural gas prices at the same times it’s clearly planning on turning Ukraine, with its massive natural gas deposits, into Europe’s new natural gas station. And this is all happening when brutal austerity is still very much the plan for Ukraine. As a result, natural gas sales are probably the only realistic way for the country to dig itself out of a giant economic hole (putting aside the giant environmental hole that this plan exacerbates).

    So will there be any counter-balance for Ukraine if its forced to pay off its massive debts at newly lowered gas-prices? After all, the Energy Union will exist long after the immediacy of current crisis and so will Ukraine’s period of planned society-destroying austerity. So will Ukraine get lighter austerity treatment in light of the new plan to drive down the price of one of its main natural resources? Let’s hope so…

    Posted by Pterrafractyl | April 25, 2014, 9:08 am
  8. Here’s an article that highlights some important features of the EU’s relationship with Russia’s natural gas supplies: Qatar, the world’s second largest natural gas exporter, is in a prime position to capitalize on the EU-Russian tensions, but it’s can’t do this easily. Why? In part because Russia’s presence in the EU energy market simply makes it much much cheaper for Russia to sell it’s gas and that includes the new Nordstream pipeline that came on line connecting Russia to Germany and possibly the yet-to-be-started Russia-to-Bulgaria South Stream pipeline that both bypass Ukraine. While it’s not known yet if South Stream is going to be derailed or not by the crisis in Ukraine, it doesn’t look like Russia ras going to be replaced by outside suppliers any time soon:

    Huffington Post
    As Europe Reconsiders Russian Gas, Qatar Waits in Wings

    Giorgio Cafiero
    Co-founder of Gulf State Analytics and research analyst with Country Risk Solutions, a cross-border risk advisory firm

    Daniel Wagner
    CEO, Country Risk Solutions

    Co-written with Sufyan Bin Uzayr

    Posted: 04/26/2014 4:52 pm EDT Updated: 04/26/2014 4:59 pm EDT

    Throughout the Ukraine crisis, European Union (EU) leaders have become more vocal about their interest in reducing Europe’s consumption of Russian natural gas. As a result, Qatar — the world’s number-one provider of liquefied natural gas (LNG) — is well positioned to play a more influential role in Europe’s energy landscape.

    Although unlikely to replace Russia as Europe’s top natural gas provider, Qatar could assist in significantly decreasing the EU’s reliance on Russian energy resources while at the same time obtaining greater diplomatic leverage over European governments.

    Ukraine’s impact on EU-Russia energy trade

    Fortunately for the EU, Ukraine’s crisis did not erupt several years earlier. In 2006, 80 percent of Russia’s natural gas sales to the EU transited Ukraine. This was reduced to 50 percent by 2013 (two years after the Nord Stream pipeline came on line — connecting Vyborg, Russia to Sassnitz, Germany via the Baltic Sea).

    In 2013, the EU and Russia began construction on the South Steam project, a planned gas pipeline connecting Russia to Bulgaria via the Black Sea, which would increase EU-Russia energy trade while bypassing Ukraine.

    However, the chilling of EU-Russia relations may jeopardise the South Stream project’s future. European firms involved in the project have reacted differently. While the CEO of Italy’s ENI called the project’s future “gloomy,” some Bulgarian and German firms have remained optimistic, as have their Russian partners.

    Naturally, each EU member faces unique geopolitical challenges and varying degrees of geographic proximity to alternative natural gas providers and corridors. National interest will therefore dictate how each participating European nation reacts to the project in the future.

    Qatar’s most promising near-term opportunities in the EU exist in Central/Eastern Europe, where dependency on Russian gas is comparatively high and anti-Kremlin sentiment is widespread.

    Although Poland relies on Russia for 60 percent of its natural gas imports, Warsaw has pursued bold measures to purchase gas from other providers (including Qatar) since the Russia-Ukraine price war of 2009, which highlighted the geopolitical risks of maintaining a reliance on Russian gas.

    Poland’s LNG terminal in S´winoujs´cie is expected to begin importing Qatari gas in 2015. As Eastern European countries, including Estonia and Lithuania, also invest heavily in LNG infrastructure, Qatar will likely gain new opportunities given Doha’s ownership of Qatargas, the world’s largest LNG shipping company.

    Can Qatar make a difference?

    Although Qatar is only a fraction of one percent the size of Russia, the Gulf emirate’s reserves amount to over half of Russia’s, making Qatar the world’s number-two gas exporter behind Russia itself.

    However, Qatar understands that it cannot overtake Russia as Europe’s top gas seller, nor is it clear that Doha has any interest in pursuing such an ambition.

    Due to Russia’s enormous market share in Europe, it can sell natural gas to the Europeans at a price 40-50 percent below what the Qataris offer. Nearly 70 percent of Qatar’s exports reach China, India, Japan, Singapore, and South Korea, making Qatar’s economy far less dependent on EU-bound exports.

    Therefore, Russia will likely sign gas deals with Europe at rates below any level that the Qataris would find agreeable given their opportunities in Asian markets. While Polish officials are willing to pay a steep price to wean their country off Russian gas, other European governments will not have the ability or incentive to do so.

    Russia’s preeminent role in the EU gas market cannot be threatened in the near-term. Even Poland — the EU member arguably most determined to reduce its reliance on Russian gas — still has a contract with Gazprom booked until 2022.

    Alternatively, the possibility of Germany re-starting its nuclear power plants, advances in green technology, and increased consumption of coal could decrease the EU’s consumption of natural gas altogether.

    Furthermore, the costly investments in LNG infrastructure that cash-strapped European governments would have to make in order to secure higher LNG imports from Qatar will limit Doha’s capacity to wedge itself between the EU and Russia.

    Another question raised by this is just how economically feasible the EU’s big push into fracking in order to wean itself off of Russian gas is going to be, especially with the proposed EU “energy union” now on the horizon. That could end up being some pretty cheap gas that the EU gets from Russia if there’s a single EU buying agency that sets up gas contracts for the entire EU.

    So is the EU seriously going to be able to out-frack Russia’s gas suppliers if Qatar, the second largest exporter in the world, can’t realistically compete unless the EU decides to buy at higher prices? Or might an “energy union” be used to ensure that expensive, domestically fracked gas gets selectively purchased over the cheaper imports? Freedom isn’t free, after all. Could expensive domestic fracking for energy freedom be on the way? Angela Merkel appears to be warming up to idea of fracking for freedom, so…probably?

    The Local Germany edition
    opinion
    ‘Fracking won’t save Germany from Putin’

    Published: 22 Apr 2014 13:17 GMT+02:00
    Updated: 22 Apr 2014 13:17 GMT+02:00
    Germany’s reliance on Russian gas continues to limit the nation’s diplomatic leverage in the Ukraine crisis. But as leaders once again explore fracking as an alternative, critics told The Local the risks were too high.

    Fracking – the process of extracting hard-to-access shale gas from the ground using highly-pressurized chemicals – has never been popular in environmentally-conscious Germany.

    Last year a draft bill to allow companies to use the method had to be shelved when the extent of public feeling became apparent.

    But as the Ukraine crisis has made clear, Germany’s reliance on Russian gas imports is becoming increasingly dangerous. Now fracking is being put forward again as a way of liberating the country’s energy supply from the whims of Russian President Vladimir Putin.

    Yet as calls for Germans to reconsider fracking grow louder, critics, including Environment Minister Barbara Hendriks and Friends of the Earth Germany (BUND), are calling for an outright ban. They say the country is not big enough to withstand large scale use of fracking chemicals, which carry a potential risk to drinking water.

    “Existing shale gas deposits in Germany would only last for about ten years. Long term price stability and independence through relying on Germany’s own gas resources are therefore pure utopian fantasy,” BUND fracking expert Inga Römer told The Local.

    “Contamination of drinking water, increased risks of earthquakes, increased noise and air pollution in a densely populated country like Germany? It is unthinkable,” she added. “The high-risk and uneconomic fracking process should be banned here.”

    Fracking dangers

    Others, such as renewable energy blogger Michael Brey, have accused the pro-fracking lobby of manipulating fears over Germany’s gas supply in the Ukraine crisis to force a dangerous technology on a skeptical German public.

    Writing on the blog section of Econeers, a crowdfunding platform to raise money for German renewable energy projects, he argued the EU Energy Commissioner Günther Oettinger was boldly using the Crimean crisis as a way of bringing fracking back into play.

    “He is not alone – Chancellor Angela Merkel has also suddenly taken a shine to the highly risky technology,” Brey wrote.

    “Günther Oettinger is not exactly known as an ardent proponent of renewable energy. He seems better known for his absurd advances in energy policy.

    “In his latest political gaffe, Oettinger used the background of the Crimean crisis to speak up in favour of fracking in Germany – a dangerous technology used to extract shale gas, which contaminates soil and ground water for centuries with poisonous chemicals.

    “If these chemicals find their way into drinking water, they can cause infertility and cancer in humans – among other things.

    Merkel’s U-turn

    “Fracking also causes massive damage to natural habitats. Drilling in sensitive areas can lead to fissures and earthquakes. The gas extraction method is also seen as extremely risky for the climate because it can allow the greenhouse gas methane to leak into the atmosphere.

    “Methane is 25 times more dangerous than carbon dioxide in terms of its warming affect on the atmosphere – a real danger to our climate. In this way, fracking could in some situations prove worse for the climate than burning brown coal as an energy source.

    “But Oettinger is not the only one pushing for fracking. In light of the Ukraine crisis and fears over German dependence on Russian gas, Chancellor Angela Merkel seems to be about to do a U-turn on her previously critical stance towards fracking.

    “She is now considering importing liquid gas from the USA, where since the beginning of the last decade a fracking boom has been taking place.

    “Back in May 2013, when Germany tabled a draft law to allow fracking that was later shelved, Merkel advised caution. ‘This technology would also very probably give Germany access to new gas deposits, but unlike large areas of the USA, we live in a very densely populated country,’ she told a crowd in Hamburg. ‘That is why we have to look very carefully into whether this technology should also be used here.’

    “Yet as the Crimean crisis drags on and Germany explores how best to wean itself off gas imports from Russia, along comes a solution – just in the nick of time. Germany will begin importing gas from fracking in the USA.

    “At an EU summit this March, Merkel was reported as saying US shale gas imports could be an option for European countries seeking to diversify their energy sources. Or in other words, fracking is fine as long as it happens a long way away and not here.

    So back in March, Merkel was open to idea of imported fracked gas from the US, but wasn’t so keen on fracking taking place in Europe and certainly not in Germany. But now, with the new fracking-intensive “energy union” idea being bandied about that sets up a single natural gas purchaser, fracking in Poland might become a reality. And fracking in Ukraine is just a matter of time. But there are substantial shale gas reserves across the EU. Which raises the question: is the proposed “energy union” going to double as a “EU-wide domestic fracking union” even when the fracked gas (purely in financial terms and putting aside environmental costs) is going to be far more expensive than Russian imports? In other words, is the crisis in Ukraine going to result in the EU buying expensive domestically produced fracked gas as the price to pay for EU energy freedom from Russian gas? It’s starting to look like that’s the agenda and, if so, that’s a pretty pricey plan.

    Posted by Pterrafractyl | April 26, 2014, 5:04 pm
  9. Here’s a tweet to consider: Eastern Ukraine is mush gassier than Western Ukraine

    Daniel Sandford@BBCDanielS

    Map of the day. From the Shell brochure about their planned shale gas project in E Ukraine…centred on Sloviansk! pic.twitter.com/FXA1qagwsH
    4:29 AM – 28 Apr 2014

    There’s another map here showing the disproportionate number of gas fields in the eastern half of the country.

    Interestingly, since the big western oil and gas firms are maintaining very chummy ties with Moscow despite the crisis, it’s unclear how much a breakup of Ukraine is something the big firms should even fear from a business standpoint.

    Loss of existing contracts could be an issue. But keep in mind that all of the talk from Ukraine’s government last year was that these new fracking deals would lead towards Ukraine’s energy independence and maybe even allow for natural gas exports. Maybe, assuming the optimistic forecasts. How thrilled are firms like Chevron and Shell when they hear about non-exporting plans like that?

    Ukraine signs $10 billion shale gas deal with Chevron

    By Pavel Polityuk and Richard Balmforth

    KIEV Tue Nov 5, 2013 9:11am EST

    (Reuters) – Ukraine signed a $10 billion shale gas production-sharing agreement with U.S. Chevron (CVX.N) on Tuesday, another step in a drive for more energy independence from Russia.

    The deal to develop its western Olesska field followed a similar shale gas agreement with Royal Dutch Shell (RDSa.L) in January and boosts Ukraine’s leadership at a time of fraught relations with Moscow over gas supplies.

    “The agreements with Shell and Chevron … will enable us to have full sufficiency in gas by 2020 and, under an optimistic scenario, even enable us to export energy, President Viktor Yanukovich told investors shortly before the signing.

    The highest end of expectations for Olesska’s potential reserves would match around three years of European Union gas demand, but similarly sunny hopes for shale reserves in neighboring Poland have been very sharply downsized.

    Shale development in Europe is far behind the booming U.S. sector and progress is patchy. Chevron pulled out of a shale exploration tender in Lithuania and has suspended work at a Romanian shale well after local protests.

    Ukraine Energy Minister Eduart Stavytsky, who signed the deal with Chevron executive Derek Magness, set it in the context of a high price Ukraine pays Russia for its gas.

    This is one more step towards achieving full energy independence for the state. This will bring cheaper gas prices and the sort of just prices which exist (elsewhere) in the world,” he said.

    Ukraine pays $400 per thousand cubic meters for Russian gas under a 2009 10-year agreement. Kiev has failed to re-negotiate its terms with Moscow.

    The agreement with Chevron, to extend for 50 years, foresaw an initial investment of $350 million by the U.S. major in exploratory work over two or three years, Stavytsky said, aimed at establishing the commercial viability of shale reserves in the 5,260 square km (2,000 square miles) Olesska, part of a band of shale which stretches from the Baltic to the Black Sea.

    Earlier government figures set total investments, including extraction after exploratory drilling, at around $10 billion.

    The 50 year duration of Chevron’s (and Shell’s) contract highlights the fact that they have a long-term stake in the current crisis with business opportunities on both sides. Does Ukraine, itself, have to keep existing for those contracts to be enforced? Might the possibility of civil war and the splitting up of Ukraine make the remaining “West Ukraine” and “East Ukraine” an even bigger net gas exporter than a united Ukraine? Since the gas isn’t really evenly distributed, depending on how the country gets divided the gas-to-population ratio might getting shifted around quite a bit, leaving more for exports in one of the two new states.

    And what if Eastern Ukraine broke off and joined Russia? If that happened, how much more of that gas from Eastern Ukraine would end up for export instead of domestic consumption and how would the export prices compare to the price a united Ukraine would pay for domestic consumption of their own gas? It seems like there might be some sort of special low price for domestic gas consumption given how important natural gas is for the Ukrainian populace (and the externalities the populace has to pay). Is that something Shell & Friends prefers? Or might a divided Ukraine be better for business?

    If the big Western oil and gas firms that are currently close to Moscow don’t really care how the Ukrainian crisis is resolved (as long as they get their contracts intact), from a purely business standpoint, which outcome of the crisis in Ukraine would they prefer? That’s not obvious. But no matter how it turns out, they’re probably pretty glad it happened.

    Posted by Pterrafractyl | April 28, 2014, 9:40 pm

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