Polish shale gas goes to Brussels: A personal reflection

The lack of blog postings here usually indicates something is cooking on my end. This is no different this time. This is  the first weekend in two months (it is now a four day weekend/holiday in Hungary) that I’ve had off. The lack of respite is great. I’ve been sleeping with shale gas and fortunately my coffee maker didn’t break until last week. But let me quickly summarize why my life has been so interesting. I think from a personal point of view my immersion and reflection in this blog post provides an interesting perspective (and the fact that I actually have a few minutes to write a post).

There are two shale gas projects on my plate. The first is an EU research funded FP7 project GR:EEN, that is looking at the academic perspective of shale gas. This I’m doing with Professor Andreas Goldthau of CEU. We are conducting a comparative study between Poland (yes, let’s do shale gas) and Bulgaria (no, we don’t want your dirty gas). This includes interviews and the development of a theoretical framework. Our early results are really interesting. But like all good academic things, it will take a few months (to years) for us to publish our findings.

The second ‘project’ was a report that I produced for the European Parliament’s Citizens Petitions Committee. The report addressed the concerns raised by citizens that filed petitions concerning shale gas in Bulgaria and Poland (this was totally coincidental that it was the same countries as the GR:EEN project). The full draft report that includes analysis of other countries’ petitions is an interesting read. I have to recommend the policy and legal analysis done by Milieu. This also provides a good introduction to my report. In another blog post I’ll consolidate my findings and write a brief overview.

The committee room was packed.

And so.. what did I learn? – three things

In my travels over the past two months, I was in Colorado, California, Poland (twice) and Brussels (equal to a country) I met and heard from a wide range of representatives from industry, scientists, advisers,  citizens, and politicians involved in the shale gas debate. Professor Goldthau and I also deployed a research assistant to Bulgaria and I had a great RA in Poland helping me with the interviews.

#1) It’s about money

Let’s not think it is about the environment. When someone mentions shale gas, the environmental arguments come up. But really (and I’m being overly provocative here) while ground water pollution has happened somewhere it is equivalent to the bats and birds killed by wind farms (which apparently is over blown too). My point: energy technology has impacts. Society must weigh these impacts, but while civil discourse needs and does occur, an important ingredient is the economic impact that shale gas offers society. Lower price probably is better, and wins the debate. But this also must be balanced with the impact on other technologies or supply sources. Cheap Russian gas is great for Germany (which more or less opposes shale gas), but expensive Russian gas (yes, the same gas) should be replaced by lower priced domestic Polish shale gas. Renewable energy gets squeezed into the debate, but it’s not really about gas replacing solar, it is about cheap gas balancing out renewables in the grid. So yes, it is about the pricing of gas – the cheapest source.

#2) It’s about money

The economic impact of the (shale) gas industry works for both the local economies and for the national economy. Whether that is perceived jobs for the local economy (and the research is still out on the impact of temporary workers – and the boom/bust cycle of fossil fuel extraction)  and for the impact that cheap energy has on attracting industry. I remember when I did my PhD research on why Michigan decided to deregulate their electricity market; the story that made the rounds was a steel company locating to Ohio because of cheaper electricity prices. These stories of industry and jobs have legs. They can drive policy and regulatory efforts. In both Colorado and Poland the drive for jobs and tax revenue are seen as direct benefits from extracting shale gas.

#3) It’s slightly about security

Energy independence and security of supply are great topics to analyze. I do it, I even demonstrate that this is important. Because it is – at one level. But if you want to boil it down, it is about money. What is the reason that the US still imports so much oil from the Middle East? Why is Bulgaria still almost totally dependent on Russian gas? Whether there are transparent or in-transparent reasons, the actual structure of a country’s energy mix is controlled by strong entrenched interests. Gaining a higher level of energy security is dependent on meeting the demands of domestic economic actors. Why is Poland so dependent on coal – and keeps the sector alive? Economics. Both raw politics and raw economics. Having Russia as the dominant gas supplier also fuels the need to keep the Polish coal sector alive to prevent becoming overly dependent on Russia. So yes, security of supply is important, but the economics and benefits provided to different social, economic and political actors are also important.

Conclusion

I will argue someplace else that shale gas is not all about money. It is all dependent on how much you want to distill the issue – and the technology. But if you want to read a short blog post that distills to the basic elements then you get the money explanation. Environmentally, there remains a large discrepancy between what is being floated by opponents and supporting scientific experts – that rest largely on theoretical impacts rather than actual impacts of shale gas extraction. I remain open on this point. But even from what I saw in Brussels and the experts that presented there, who came down against shale gas, their assumptions in their models or risk assessments were not balanced. I have no problem being opposed to it, but don’t provide me with an oversimplified model that provides a Fukushima-like impact assessment globally applicable. The one thing that is true of shale gas and the technology used, each geological formation is different and different techniques are applied. This also goes for the regulatory environment that oversees the industry. Painting the shale gas industry with one brush with one assumption of environmental damage does not work. The assessment of the industry must be contextualized and needs to be site specific. How the debate is played out in Colorado is different from how it plays out in Poland. Money is important but so are the local factors that shape how the technology is deployed.