You have probably been reading a lot about shale gas and fracking lately. There’s an oil revolution of sorts underway, and it is all about using shale deposits to get the resource out—and, of course, bypass OPEC along the way.
The latest chapter in this ongoing tale involves a relatively quiet nation searching for a way out of energy dominance by a much larger nation. Poland might have the potential to become completely energy self-sufficient, shrugging off Russia’s yoke.
Geologists are excited over the possibility of more than 760 billion cubic meters of natural gas lying under Polish soil in shale deposits. This would be enough to supply Poland’s entire national power needs for the next five decades, and that means they would no longer require Russian-supplied gas for the harsh winters.
But the biggest question right now is how successfully Poland can implement the highly controversial process of extracting shale oil via hydraulic fracturing.
Fracking has caused a ruckus in many countries, including the UK and US, and some countries like France have even banned it.
And despite the lure of all these reserves, Poland first needs to install the infrastructure necessary to get production going at the levels needed.
Currently, Poland requires roughly 14.5 billion cubic meters of gas per year. Of this, 30 percent is supplied domestically, with the rest being sourced via Gazprom (MCX: GAZP).
Gazprom is a true behemoth; not only is it the largest natural gas extractor in the world, but it’s also the single biggest Russian company. As if that weren’t enough, the company has a history of heavy-handed operations. Most notoriously, it shut off gas supplies to the Ukraine in the middle of winter back in 2009 over a price dispute.
For all these reasons, Poland is justifiably elated over the shale discoveries, but there are still a number of issues of concern.
Unlike the U.S., Poland’s shale deposits are located at a very deep level, almost 2.5 miles underground in some areas. That means the nation needs to spend much more on acquiring the right equipment.
And, because fracking is controversial, it is already generating worries within Poland as many people express concerns over possible environmental hazards.
It is possible that the current rush of foreign companies breaking down Poland’s door to get in on the action will help buoy the nation’s prospects.
John Buggenhagen of San Leon Energy (LON: SLE) in Warsaw told the Seattle Times:
“We only need one of these things to work, and it could be a company-maker.”
“I think there’s outstanding potential. It’s the heartbeat of our company.”