Poland’s hopes that its deposits of the hydrocarbon will soon cut its dependence on Russian supplies and support the weakening economy have now been dashed, as it has now been reported that Talisman Energy Inc. and Marathon Oil are pulling out of exploration for shale gas in the country. The companies commented that they have not found enough gas to warrant further expensive exploration or extraction procedures.
Altogether, three major companies have retreated from Poland in less than a year, which suggests Poland was too optimistic about the value of its deposits, or at least the speed with which it can retrieve them. Big energy companies want shale gas deposits that are easiest to extract, but Poland’s shale rock has proven more difficult to mine than shale rock in the US. This is because of the geological make-up of the land and to the fact that the region is much more densely populated than America.
Energy and environmental wellness experts have said that, as a result of this retreat, Poland will have to undertake many more tests, and spend more time and much more money to produce shale gas. According to Kamlesh Parmar, chief executive of 3Legs Resources, the first energy exploration company in Poland to obtain test gas flow, in 2011, ‘The issue for us … is to make sure that the industry is not disincentivised to carry on with exploration activity and carry on investing hard money in projects.’
Jolanta Talarczyk, spokeswoman for the State Mining Authority, noted that only 43 wells have been drilled so far, just 12 of which have produced some gas flow. However, hundreds of them will be needed to accurately assess the country’s reserves potential. The Polish government also had hopes that a boom in investment would help the economy, which has been slowing sharply. The shale gas industry was also expected to create thousands of jobs, which would help to reduce the 14.3% unemployment rate.
Shale gas was also meant to boost Poland’s geopolitical independence from Russia. Since the fall of the Soviet bloc, Poland has – like many other Eastern European countries – been trying to move out of Russia’s sphere of influence. As it stands, Poland imports 70% of its gas and some 90% of its oil from Russia, but Moscow has shown it is willing to use its gas supplies as a weapon in political matters, shutting off supplies on two occasions in price disputes with Ukraine. Russia also dictates prices, making Poland pay one of Europe’s highest, almost $500 for 1,000 cubic meters of gas. As such, Prime Minister Donald Tusk commented, ‘We do not want Poland’s strong economy to be dependent on energy deliveries from the East.’