Shale Gas Search Divides Romania

Unconventional natural gas extraction could decrease Romania’s energy dependence on its former “mother” Russia.

Recent discoveries of natural gas deposits have become a disputed issue in Romania. After years of economic slowdown following the collapse of the Soviet Union, many look to the discovery of energy resources as a potential economic boom. Others are hesitant to embrace the news. Critics are concerned about the possible environmental ramifications of such a discovery, specifically in regard to the use of the controversial extraction method known as hydraulic fracturing.

A large percentage of Romania’s energy currently comes from neighboring Russia. Those supportive of domestic gas drilling see this as a means to push the nation toward energy independence.

Analysis

The notion of shale gas exploration has become a hotly debated topic in the international resources game as of late. Said to cause everything from fires in Canada to minor earthquakes in the United Kingdom, the new player has not had the best reputation coming into people’s lives.

But one thing is for sure — there is a lot of places where this product can be found. Ireland was recently told it had up to $55 billion in shale gas reserves on its northwestern coast alone. China, a country hugely reliant on importing fuel from the Middle East and Russia, has reported significant findings in its earthquake stricken Sichuan Province.

Romania has now joined the club of countries where this gas could benefit its future energy supply rather than traditionally depending on its former “mother” Russia.

The American oil company Chevron, which is spearheading operations in the country, has already come under fire from concerned locals and environmentalists who have long denounced shale as yet another dirty fossil fuel that damages the health of the local population and surrounding wooded areas.

There have been numerous reports on the safety of fracking, the practice of extracting shale gas which has caused all of this concern, but with United Kingdom and other countries considering resuming it, Romania will be hard pressed to look at its own future independent energy reserves.

Wikistrat Bottom Lines

Opportunities

There are great opportunity for Romania in terms of its energy supply and surrounding areas. Less dependance on Russia for oil and gas imports that carry heavy transport costs.

Risks

The discovery is relatively new and the practice of fracking is still in its infancy, leading to suggest that the full potential of this product is way off from being produced. Protests from environmentalists and locals preventing or delaying the project from getting underway are likely.

Dependencies

A major dependency is the speed at which the technology can be made to ensure that fracking has no major flaws. It also remains to be seen how much the Romanian government is willing to invest in this new resource.

Jared Sterk contributed to this analysis.