Report: EU says ‘frack’ you to Putin’s energy monopoly

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Michael Bastasch Contributor
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Russia’s Ukraine incursion has woken up Europe to the fact that it’s heavily reliant on natural gas from Vladimir Putin, which he can threaten to shut off in order to get his way. This realization has sparked calls for Europe to scale back its green agenda and “drill, baby, drill.”

European Parliament passed an energy bill that would create more burdensome regulations for oil and gas exploration, but exempted exploration in shale formations — which the U.S. have tapped into using hydraulic fracturing, or fracking. EU lawmakers are also pushing back finalizing their goals to reduce global warming and increase green energy production in the face of Ukraine’s political crisis.

Poland, which gets most of its gas from Russia, recently promised tax-free status to companies that extract natural gas from shale formations through 2020. Poland’s shale gas potential is estimated between 800 to 2,000 billion cubic meters.

“We adopted measures that should encourage shale gas exploration,” said Polish Prime Minister Donald Tusk, adding that after 2020 taxes “shouldn’t exceed 40 percent of extraction income.”

EU and Polish momentum have been bolstered by calls from major European industries that want to see more oil and gas exploration on the continent to bring down energy bills. Green policies in countries like Germany, Spain and Britain have hit families and businesses with high energy bills — fracking EU shale gas could bring prices down in the years to come.

“We think that we have to balance climate policy, but also cost competitiveness and security of supply,” Markus Beyrer, the secretary general of BusinessEurope, told EurActiv. “And of course, recently, the issue of security of supply has been added an extra element of external dependence.”

“Of course energy efficiency and renewables will play a role in this,” Beyrer added. “But talking about the quantities, this will not be enough, so this means we will have to have a more rational, less emotional debate on other possibilities, starting with indigenous resources, including shale gas.”

Environmentalists have so far been successful in stymieing fracking, getting France to ban the drilling technique and sparking anti-fracking protests across Britain and other parts of Europe. Activists argue that tapping into shale would have little impact on Europe’s energy security from Russia.

“It seems like BusinessEurope is the only one to find this problem minor,” Antoine Simon, an activist with Friends of the Earth, told EurActiv. “Even the European Commission published a report last year on the environmental impact assessing the underground and surface contamination risks at its highest level of dangerousness.”

But European fracking coupled with liquefied natural gas and oil imports from the U.S. could have a major impact on Russia’s energy hold in the long-run. That’s the argument U.S. lawmakers are now making to push for more energy exports.

“This new domestic energy reality allows us to engage the world in a strong way, and to pursue our national security and foreign policy objectives by economic means,” Alaska Republican Sen. Lisa Murkowski said in a statement. “Lifting the oil export ban will send a powerful message that America has the resources and the resolve to be the preeminent power in the world.”

Murkowski and other members of Congress have been pushing Obama to lift the federal ban on crude oil exports and move more quickly to approve liquefied natural gas export terminals.

“Natural gas has created a job boom across this country, but exporting also has the potential to strengthen relationships with certain of our allies who are still at the mercy of Russia’s virtual energy monopoly,” said Louisiana Republican Sen. David Vitter.

According to the U.S. Energy Information Administration, Europe and Turkey got 30 percent of its natural gas from Russia, “with a significant amount flowing through Ukraine.” Though the amount of gas flowing through Ukraine has decreased in recent years due to new pipeline infrastructure.

In the past, about 80 percent of Russian gas went through Ukraine to get to European consumers, but when the Nord Stream pipeline came online in 2011, this decreased the amount of gas passing going through Ukraine to between 50 and 60 percent.

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