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Unconventional in Bohemia

Shale gas in the Czech Republic may be on its way

The Czech Republic is attracting increasing interest from companies seeking to find and develop unconventional-gas resources. But local concerns about the environmental impact of hydraulic fracturing (fracking) could put paid to development prospects.

On 8 September, UK Aim-listed Wildhorse Energy revealed that it is working in central Europe on a series of underground coal-gasification (UCG) projects, with developments in the Czech Republic the most advanced. By pumping oxygen and steam into un-mineable coal seams, the UCG process produces synthetic natural gas.

"We have started putting teams in place in Poland, Germany and the Czech Republic. The Czech operations are the most advanced – we have definitely made very concrete steps and we should have news soon," said Chris Dinsdale, Wildhorse’s chief financial officer.

Shale potential

Meanwhile, the Czech ministry of environment confirmed in August that it plans to commission a survey to determine how much, if any, shale-gas resources the country holds; and that UK companies Cuadrilla Resources and Hutton Energy have submitted applications through their local subsidiaries to start exploration. Czech media reports suggest other firms are also interested, including local oil and gas explorer MND.

These firms hope the Czech Republic will hold deposits of unconventional gas similar to those believed to exist in neighbouring Poland, where the US Energy Information Administration estimates technically recoverable shale-gas resources at 187 trillion cubic feet (cf) – the largest in Europe.

No-one believes the Czech Republic will boast anything like such large amounts, but with central Europe overwhelmingly dependent on imported Russian gas, there is a strong economic argument for exploiting any commercially viable resources.

Cuadrilla Morava has acquired a 365 square-mile tract near Olomouc, in Moravia, basing its decision on data that "suggests the shale characteristics of the Czech Republic are analogous to those of other basins in Europe that are being explored”. It has applied for an exploration licence and hopes to hear from the Czech authorities this autumn.

Meanwhile, through Czech subsidiary Basgas Energia, Hutton Energy has applied for two five-year concessions in the Czech Republic to develop unconventional-gas resources: Berounka, about 30 km southwest of Prague; and Trutnov, in the northeast of the country.

"The potential for natural gas in shales in the Czech Republic has yet to be tested,” says Hutton. But investigations in the Ordovician-Silurian succession, suggest similar shale-rich plays to those in North America, it adds.

Drilling controversy

The Czech environment ministry emphasised that these licences are for research only and that drilling based on any discoveries would not begin for at least another five years. But analysts suggest any such drilling would cause huge controversy for historical reasons.

At a Washington forum on trans-Atlantic natural gas issues, hosted by Johns Hopkins University's School of Advanced International Studies in May, Vaclav Bartuska, the Czech Republic's ambassador-at-large for energy security, told delegates that the fear of pollution from fracking – the pressurised injection of water and chemicals into shales release natural gas – is too great to allow shale-gas development in his country.

"The reason we are so cold about shale gas is that we have had 30 years of mining for uranium, which involved pumping millions of litres of sulphuric acid into the ground. That has been an ecological disaster. We stopped in the 1990s, and have been trying to clean it up ever since," Bartuska told the forum.

The consequences of fracking are a hot topic for the unconventional-gas industry. While environmental groups claim the process pollutes local water supplies, the industry is adamant that the technology is safe.

In a high-profile move, France banned the practice earlier this year. In the US, the home of the shale-gas revolution, the Environmental Protection Agency is conducting an independent study of the effects of fracking on groundwater supplies. The results are expected by 2013.

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