Technology from Europe
POLAND / INTERVIEW

Polish environmental ministry promises no roadblocks to shale gas

The possibility of abundant natural gas from Polish shale formations has attracted the interest of operators from around the globe. Though exploration is still in very early stages, estimates of reserves have varied wildly, from as low as 5 Tcf to as high as 45 Tcf. For the more than 40 companies holding concessions in the shale regions, there is enough potential to justify a major push. World Oil spoke with Marta Wagrodzka, a shale gas specialist in the Polish Ministry of the Environment, about the development of the country’s shale resources and the government’s role in promoting that development.

MARTA WAGRODZKA is Chief Specialist and Head of the Promotion and Negotiations Section in the Department of Geology and Geological Concessions at Poland’s Ministry of the Environment. The ministry develops and implements the Polish government’s policies concerning shale gas development and environmental protection. Wagrodzka works in the office that is responsible for reviewing applications for shale gas concessions. She has a master’s degree in engineering geology from the University of Warsaw.

World Oil: Could shale gas allow Poland to become energy independent in the future?

Marta Wagrodzka: Well, so far we don’t have any estimates of future reserves. The exploration that is going on at the moment is in a rather early stage. We certainly have hope for developing large reserves—it will strengthen the base of our resources. We are looking forward to the results from the current exploration.

WO: Is the Polish government offering special incentives to foreign companies to explore in the shale regions?

Wagrodzka: No, we do not divide domestic and foreign companies. They both are treated equally. There are the same rules and obligations for foreign companies as for Polish companies. Also, we don’t have any special incentives as regards shale gas exploration. We use the same rules as for conventional oil and gas exploration.

WO: Is the government looking to take a percentage stake in Polish shale gas?

Wagrodzka: We have the royalty system and the concessions fee system, which will apply to shale gas as well. The royalty rates are set in law.

WO: Who in the government is responsible for environmental protection from shale drilling, and what are the rules?

Wagrodzka: We have a General Directorate for environmental protection, which is an institution in the Ministry of the Environment. The Polish system derives from the European legislation. We have implemented several environmental directives into law. According to these laws, activities that could have a significant impact on the environment require an impact assessment and the obtaining of an environmental decision. This procedure is conducted at the local authority level.

It depends on the scope of the geological program, the scope of the work, and also depends on the environmental sensitivity of the area. It varies. For disposal of water, there is another permit, the water law permit, which specifies what amounts of water a company can take and how to dispose of this water.

The shale region is not very heavily populated, apart from the immediate vicinity of Warsaw and Gdansk. The average is 20 to 60 people per square kilometer, which is not very high. Most of the area where the shale gas exploration is taking place is agricultural.

WO: Why is the greatest interest for European shale gas in Poland? What is different about Poland as compared to other European countries?

Wagrodzka: In Germany there were actually even more wells drilled for shale gas exploration than in Poland. At the moment, they have something like eight, and we have five. The situation is changing rapidly from month to month, because work is ongoing.

There was a seminar on March 15 in Brussels, organized by the US Atlantic Council. People were invited from Germany, France, the UK and Poland, and there were also representatives from the United States and the European Commission. The Germans said they are looking forward and are going to conduct exploration, and the same opinion came from the UK side.

As we know, the French situation is different. They have stopped exploration, and the minister ordered two councils to prepare a report, very wide-ranging, covering environmental, social, legal and other aspects of shale gas. It should be ready by the end of june, and then the minister of the environment and the prime minister will make a decision based on this report about future action on shale gas.

WO: Is there still interest in pursuing coalbed methane in Poland?

Wagrodkza: Yes, we have several exploration concessions for coalbed methane in Poland. In general, we have three basins with potential for CBM. Two of them are under exploration at the moment. Of course, it’s not as popular as shale gas, but there is an interest.

WO: When will we see an estimate of natural gas resources in Poland?

Wagrodzka: The preliminary results should be known by May. The final results from the report that we ordered will be available between September and November. It will be officially published at a common conference, because this study is being prepared by the Polish Geological Institute, our geological survey, and the USGS. They are cooperating to prepare some reserve estimates.

We have heard some estimates from advisory companies like Advanced Resources or Wood MacKenzie. Our study will be more statistical, because we don’t have sufficient data to develop real reserve estimates.

WO: What do you see in the next three or four years for the Polish energy industry?

Wagrodzka: I think it will be very intense. We are just at the beginning of the field exploration. The preliminary studies are done. Due to concession obligations, 15 wells should be drilled this year. That number will be bigger every year. Maybe in three or four years we might have something close to real estimates of reserves.

What is important, and what we try to repeat at every meeting, is that our government has no intention of making a moratorium on exploration. That has been a big concern for companies. It’s quite important for us to let people know that.