Should Gazprom fear the shale gas revolution?

Résumé du document

This study will first examine how, after belittling shale gas' growing significance and game changing potential on the global energy market, Gazprom seemed to change its mind on this unconventional energy source.

It will then explore to what extent Poland's estimated shale gas reserves are responsible for this recent evolution.

The study will ultimately attempt to weigh up the relevance of the Russian group's precautions towards shale gas by pondering this energy source's likelihood to be a real "game changer" in Europe, and more specifically in Poland.

First qualifying shale gas as a "joke" and systematically downplaying its impact, Gazprom recently mitigated its stand with regard to this unconventional energy source's game changing potential on the world energy market in the long run . This evolution was triggered by several factors.

To begin with, not only did the United States (US) overtake Russia in terms of gas production thanks to its shale gas flourishing industry in 2009, but as a spill over effect, the country also started to export its henceforth unneeded (and previously imported from Russia) Liquefied Natural Gas across the Atlantic at a cheaper price than Gazprom. Whether this caused the Russian group to postpone its natural gas extraction project in the Shtokman gas field until 2016 is unclear. But the fact that Gazprom decided so precisely in those times of US shale gas extraction's boom led many observers to associate the two phenomena, particularly since "Gazprom had planned to send as much as 90 per cent of Shtokman's extracted natural gas to the North America" .

Extraits

[...] “PGNiG seeks price reductions from Gazprom”, Natural Gas For Europe March 2011, retrieved 8 March 2011, http://naturalgasforeurope.com/?p=7262. “Should Gazprom fear shale gas revolution?”, BBC News April 2010, retrieved 23 February 2011, http://news.bbc.co.uk/2/hi/8609131.stm. “Shale gas ‘heats' Polish presidential elections”, Euractiv June 2010, retrieved 23 February 2011, http://www.euractiv.com/en/elections/shale-gas- heats-polish-presidential-elections-news-495641. Shale gaz ne changera pas la donne pour l'Europe” June 2010, Euractiv, retrieved 15 February 2011, http://www.euractiv.com/fr/energie/le- shale-gas-ne-changera-pas-la-donne-pour-leurope-news-494968. “West worries about Russia turning to coal” March 2010, Euractiv, retrieved 15 February 2011, http://www.euractiv.com/en/energy/west-worries- about-russia-turning-coal-news-325434. [...]

[...] But from hypothetical estimates on the Poland's shale gas reserves to a foreseeable end of Gazprom energetic stranglehold on the country[17], significant steps remain. For the time being, Poland may just have been one among the many factors that prompted Gazprom's reaction to the “shale gas issue” Shale gas in Poland: no more than causing Gazprom a temporary headache In line with the Russian group's ambivalent attitude towards shale gas, Alexander Medvedev[18] recently likened the “shale boom” to the Internet bubble, “which first blew up enormously and then flattened itself out to some rational and logical size”[19]. [...]

[...] This might undermine the conversion of the Polish shale gas industry into a profitable one for the whole country. It might take Poland more than political statements and historical antipathy to free itself from Gazprom's grip. For now, considering the embryonic state of the Polish shale gas industry, Gazprom may just have to keep acting cautiously while scrutinizing shale gas worldwide evolution. Poland's fierce opposition to the Baltic Sea Pipeline's project[22] (meant to connect Western European markets with major Russian gas plays and therefore allow Russia to shut off the Polish supply without endangering its deliveries to Germany) is further evidence that in the short term (around 20 years), the country is well aware of the reality of its dependence on Moscow's energy supplies. [...]

[...] “Shale gas could ensure Poland's independence from Russia”, Deutsche Welle November 2011, retrieved 8 March 2011, http://www.dw- world.de/dw/article/0,,6237551,00.html. “Poland could never be a second Norway”, The News.pl June 2010, retrieved 8 March 2011, http://www.thenews.pl/business/artykul133201_shale- gas---poland-could-be-second-norway-.html. International Energy Agency, “Resources to Reserves. Oil & Gas Technologies for the Energy Markets of the Future”, retrieved 15 February 2011, http://www.iea.org/textbase/nppdf/free/2005/oil_gas.pdf [1]“Gazprom: Shale Is A Joke, And It Can't Possibly Compete With Business Insider April 19, Russian minister of natural resources Yuri Trutnev conceded that shale was proving to be a conundrum to Moscow. have a problem with shale said Trutnev. [...]

[...] This situation was related to PGNiG's preference for the easiest option: gas exportation from Russia via the Yamal pipeline[14]. Far from announcing a complete independence from Gazprom gas supplies, these statements may nonetheless pave the way to a turn in Poland's authorities' choices in terms of diversification of gas supply, and subsequently to a gradual disaffection from Russia in that regard. For those reasons, PGNiG/Gazprom recent negotiations over future gas supply contracts have been illustrated by a rather high degree of tensions, especially as PGNiG threatened to take the matter to a court of arbitration if Gazprom was not willing to reduce its prices[15]. [...]