This document summarizes information about shale gas resources and exploration in Poland. It discusses Poland's energy problems and potential for shale gas, outlines exploration strategies and licensing requirements, and summarizes initial studies of hydraulic fracturing operations in Poland which found no impact on water or soil quality from fracturing activities. The document advocates for reducing environmental impacts through measures like public information sharing, research into fracturing techniques and chemicals, and use of multi-well pads.
1. Realising the potential of
unconventional gas in
Poland
Prof. Dr. hab. Eng. Andrzej W. Jasiński
Adviser to Deputy Prime Minister, Minister of Economy
Adviser to Chief Inspector for Environmental Protection
Chairman of the State Commission of EIA
The European Unconventional Gas Summit 2013
Vienna, 29th January 2013 - 31st January 2013
2. Shale gas -Is it something new ?
Unconventional gas deposits have been known since the
nineteenth century; however, very small production
was often haphazard. Gas flows from vertical drillings
were obtained randomly and production was negligible.
The first ever drilling for shale gas extraction was
performed in 1821 in the Devonian shale rocks near the
U.S. town of Dunkirk. The well depth of 9.5 m supplied
gas for many years to illuminate the town of Fredonia,
New York.
Planned exploration and production of shale gas in fact
began on a large scale in the 90’s of the last century
and is rapidly developing. On a larger scale, extraction
of shale gas has lasted for 20 years.
3. Shale Gas Resources of the
world
It is estimated that the world's
unconventional gas deposits are ten times
larger than conventional resources. The
actual quantities are difficult to define,
because most of the world is still largely
unexplored. Most is known about North
America. It is estimated that in the
future, shale gas will account for 50% of
gas production in the U.S..
4. Why Poland ?
• Special attention will be devoted to the Polish market,
where the situation seems to be most promising and Poland
is often considered to be a “test case” for the rest of the
Central Eastern Europe (CEE) –and indeed EU-region .
• There are reasons to assume that shale gas in Poland is in
the coastal, Podlasie and Lublin basins. Certainty about
the resources will be better defined after the planned
drillings.
• Geological data on the possibility of extracting shale gas in
Poland will be available after the completion of testing and
drilling carried out by investors on the basis of licenses for
exploration and prospecting of deposits of natural gas.
Confirmed information should appear in the next 3-5
years. One will then determine the feasibility of extracting
gas from shale - its profitability and investor’s interest.
5. Polish energy problems
-some of old-fashioned energy producing plants(CHP) are to
be modernized ,rebuilt and supplemented with new plants,
including nuclear units (forecasts of purchasing energy
abroad or of reducing needs of the industry and society)
-reduction of carbon dioxide emissions ( treatment of
emissions; switching fuel from coal to gas; „clean” coal
technologies – e.g. IGCC, CCS; bigger input of energy
from renewable sources, etc),
-the most suitable to Polish resources “energy mix”,
The simple switch from coal to gas is a big step forward
to meet Polish obligations to reduce carbon dioxide
emissions
6. Natural gas in polish paleozoic shales of Poland- land based and
shelf (offshore) basin of the Baltic - Podlasie - Lublin
Two questions to be answered:
1.Do we have shale gas ?
2.How much shale gas do we have?
The answers:
Ad 1. shale gas was found in some places (e.g. by PGNiG in Lubocino)
Ad.2 There are some estimates based on rough approximations:
• 1,37 bln m3 (Wood Mackenzie, 2009),
• 1,87 bln m3 (EUCERS, 2011),
• 2,83 bln m3 (Advanced Resources International, 2009),
• 5,3 bln m3 (EIA, 2011),
and based on some drillings (39 exploratory boreholes made in the years 1950-1990 ):
• 0,35 – 0,77 bln m3 (PGI, 2012).
With the influx of data and the development of exploration drilling for gas in shale
formations, estimates of hydrocarbons in unconventional reservoirs will be verified, and
further reports will be published.
We need, at least 100 wells composed of both vertical and horizontal drillings, with
perforation and fracking to have an initial answer to the second question.
7. Area of the Lower Paleozoic shales with the potential
occurence of shale gas
9. First drillings and
prospects
• The first drilling began in June 2010 in the area
of Łebień (Pomerania).
• Exploration work carried out so far by PGNiG in
Lubocino near Wejherowo confirm the existence of
unconventional gas in Poland. At this stage of the
analysis it is not possible to estimate the real gas
resources from unconventional sources and to estimate
the economic viability of production.
• In case of gas production profitability , production ,in
significant quantities, might start in the horizon of 5-10
years.
10. Plans and their implementation
• Ministry of the Environment as the licensing authority for
concessions ,among others, monitors the implementation of
the various concession obligations, receives the investor
annual reports, and complies the final results of the works
(which gives the opportunity to the State Treasury, to
acquire valuable geological data and the results of the
work, the costs of which are estimated to be up to several
million dollars for the performance of one borehole and
cumulatively exceed the capacity of the state budget ).
• It is planned to perform over 300 exploration wells by 2021
(128 for sure, 181 optional extra, depending on the
capabilities and performance of works by investors).
Changes in given licenses and the scope of their geological
works are possible .
• By November 5, 2012 there were performed 33 exploration
boreholes .
11. What conditions must be met in order to
obtain a gas exploration license?
The requirements to be met on an application for a license
for prospecting and exploration of natural gas are
contained in the laws on freedom of economic activity
and the Geological and Mining Law (Pgig). The
application for a license for prospecting and
exploration of mineral deposits must be accompanied
by a draft of geological work. Specific requirements to
be met by projects of geological work are defined in the
Regulation of the Minister of Environment on
geological work.
12. Concession for the Extraction of Shale Gas
and other remarks
• Concessions granted for prospecting and exploration of
unconventional natural gas are not equivalent to
granting concessions for the extraction. To obtain a
mining concession operator must first perform a series
of steps in the exploration license and document them.
• New Geological and Mining Law came into force in
2012; however, as several issues still remain unsolved, it
is planed that the Government will introduce a special
act dedicated only to hydrocarbons in the future.
• Procedures delay the process of extracting raw
materials, thus permitting regulations has to be
simplified in the emerging hydrocarbon law.
13. A draft of the new hydrocarbon law
• In the end of the last year has been published a draft of a law on
hydrocarbons mining, their tax and the Generations Fund
(“Fundusz Pokolen”) which will invest some of the money raised
from the tax on gas extraction. It will be strengthened supervision
over implementation of concessions, including a tender for
acquiring them , in which will be able to participate only verified
company (so called pre-qualification).
• The Act is designed to ensure the safety of resale licenses - the
right of first refusal is reserved for NOKE (National Operator of
Energy Raw Materials), and the resale will be possible only to
companies that have successfully passed the pre-qualification
procedure.
• In addition, exploration concession is to be replaced by a permit
exploration, and reconnaissance license (normally issued for 5
years) and mining license (issued at 20-30 years) is to be converted
into reconnaissance-mining license (issued at about 30 years).
• Together with the permit will be approved timetable and list of
investment commitments. They will be a basis of the conditions of
the license fulfillment .
14. A draft of the new hydrocarbon
law (continued)
• NOKE (National Operator of Energy Raw Materials) is going to
be a company of the Treasury, in which the state will participate
in 100 percent. and which will be supervised by the Minister of
State Treasury. The company will have a right of first refusal in
the secondary market of concessions and gains of NOKE will be
transferred to the state budget and to the Hydrocarbon
Generations Fund. The funds accumulated in this fund will be
used for long-term investments.
• NOKE will have a low percentage of participation in the
projected investment. This might allow entrepreneurs to gain
creditworthiness growth of the project, and the state - control
over the economy of deposits.
• Regulations on unconventional gas will therefore be more like
the European system than the U.S. (where the emphasis is
placed on private enterprise and the direct involvement of
investors at their own risk).
15. Criteria for the Designation of Complexes
with Shale Gas Potential
(1) high TOC content - average more than 1-2% by weight,
(2) a large thickness of the complex rich in organic matter, more than 30-60
m (depending on TOC),
(3) high thermal maturity of shale - more than 1.1-1.3% Ro (vitrinite
reflectance), but not higher than 3.5% Ro,
(4) rapid burial and heating, then uplift,
(5) Low depth of a complex - below 3500-4500 m, not shallower than 1000m,
(6) low degree of tectonic deformation - ~ flat arrangement of layers,
(7) the presence of abnormal pressures,
(8) the presence of symptoms of gas and conventional gas deposits in a basin,
(9) high silica content of shales and low content of hydrophilic clay minerals,
(10) complex and diverse reservoir conditions (eg, depth, reservoir pressure,
the number of horizons, porosity, permeability etc.).
16. Exploration strategies of shale gas
Specificity of shale gas exploration is that the parent rock
is the reservoir rock - no trap, no seal, and no gas
migration. Therefore, there are differences in relation
to conventional hydrocarbon exploration:
• An extensive analysis of petroleum systems for the
identification and characterization of parent rocks,
• A key role is played by geochemical studies (Rock Eval,
TOC, Ro, kerogen),
• Seismic surveys are not carried out to identify the
deposit, but to design trajectory of boreholes ,avoiding
tectonic disturbances,
• Obtaining sufficiently large concessions in order to
identify the most promising areas ("sweet spots"),
• Different strategies to reduce the risk of exploration
17. Measures that should be taken to reduce the
Environmental Impact and improve the Safety of
shale gas operations (1)
• Safety of people, the community and the environment is the top priority for all
responsible companies and authorities working on unconventional gas extraction.
Recent developments in technology and the extraction process have made
unconventional gas exploration and production not only economical, but safer and
more efficient.
• Companies exploring for unconventional gas should work closely with local
communities to ensure that the exploration and production activity does not
negatively impact the community’s safety, economy or environment. Through
transparency and a continuous dialogue, responsible operators aim to ensure that
the community understands and is comfortable with the process.
• When a drilling site is selected, the economic and environmental concerns of the
local community should be taken into account. The site management team should
work closely with community leaders to assess the risks and benefits of the site and
align the company’s goals with those of the local community. After these
discussions, information is gathered regarding all applicable laws, regulations,
permits and codes, and environmental impact assessments (EIAs) are conducted to
identify and address any potential hazards.
• Improve public information about shale gas operations (e.g., create a portal for
access to a wide range of public information on shale gas development, to include
current data available from state and voivodship regulatory agencies. The portal
should be open to the public for use to study and analyze shale gas operations and
results ).
18. Measures that should be taken to reduce the
Environmental Impact and improve the Safety of
shale gas operations (2)
• The relevant public and private agencies, should discuss and agree on an
appropriate mission and level of funding for unconventional natural gas R&D,
• The public should expect significant technical advance on shale gas exploration and
production that will substantially improve the efficiency and reduce potential
environmental impact of shale gas.
• The expectation of significant production in the future offers a tremendous
incentive for companies to undertake R&D to improve efficiency and profitability.
The history of the oil and gas industry supports such innovation, in particular
greater extraction of the oil and gas in place and reduction in the unit cost of
drilling and production.
• R&D projects where results could reduce safety risk and environmental damage
for shale gas operations:
1. Basic research on the relationship of fracturing and micro-seismic signaling.
2. Determination of the chemical interactions between fracturing fluids and different
shale rocks – both experimental and predictive.
3. Understanding induced seismicity triggered by hydraulic fracturing and injection
well disposal.
4. Development of “green” drilling and fracturing fluids.
5. Development of improved cement evaluation and pressure testing wireline tools
assuring casing and cementing integrity.
19. Measures that should be taken to reduce the
Environmental Impact and improve the Safety of
shale gas operations (3)
• The public deserves assurance that the full economic,
environmental and energy security benefits of shale gas
development will be realized without sacrificing public health,
environmental protection and safety. Nonetheless, accidents and
incidents have occurred with shale gas development, and
uncertainties about impacts need to be quantified and clarified.
• Important steps have to be undertaken for more thorough
information, implementation of best practices that make use of
technical innovation and field experience, regulatory
enhancement, and focused R&D, to ensure that shale operations
proceed in the safest way possible, with enhanced efficiency and
minimized adverse impact.
• If implemented ,these measures will give the public reason to
believe that the nation’s considerable shale gas resources are being
developed in a way that is most beneficial to the nation.
20. Multi-Well Pad System
• Horizontal drilling has also led to the development of
multi-well pad technology (instead of having single well
pads spread throughout the community), which allows
for one drill site to include a number of producing wells
that can access reservoirs thousands of meters away.
• The multi-well pad system allows for enhanced
efficiency because of repeating operations at the same
site and a much smaller footprint (e.g. concentrated gas
gathering systems; many fewer truck trips associated
with drilling and completion, especially related to
equipment transport; decreased needs for road and
pipeline constructions, etc.). It is worth noting that
these efficiencies may require pooling acreage into
large blocks.
21. Main Research Objectives to investigate the Environmental
aspects of Hydraulic Fracturing operation
(example of the exploration well LE-2H )
The main objective of the research team coordinated by PIG-PIB was to
investigate the environmental aspects of hydraulic fracturing operation,
carried out in August 2011 in the exploration well LE-2H , belonging to a
group 3Legs Resources company- Lane Energy Poland. Research was done in
cooperation between the Ministry of Environment and the investor.
The study included:
- Seismic monitoring (determination of the level of seismic noise before and
during the hydraulic fracturing, and recording live any seismic events
- gas-emissions (sulfur dioxide, nitrogen oxides, benzene, methane, carbon
monoxide and hydrogen sulfide),
- measurement of noise (in order to follow changes related to the emission and
propagation of sound waves in the environment),
- examination of soil and air (radon and methane),
- fluid fracturing (the amount of water used for the treatment, monitoring the
quantity and quality of water collected in technological pools; laboratory,
chemical and toxicological tests of samples from injected fluids - hydrochloric
acid fracturing fluids)
- surface water (pH, dissolved oxygen, BOD5, chlorides, sulfates, sodium,
potassium, total nitrate and nitrite nitrogen, Kjeldahl nitrogen, total nitrogen,
TOC, total hydrocarbons C10 - C40, boron, detergents (anionic and nonionic),
and sulfides) ;
- groundwater (developed mathematical model of groundwater flow in the
vicinity of the exploration well; the simulation of water flow, determining the
direction and speed).
22. Final conclusion from the LE-2H well’s
studies
• Fracturing did not affect the purity of the
atmosphere.
• Increased levels of noise during fracturing has
been observed.
• There was no effect of fracturing works on the
quality of surface water and groundwater .
• Water intake alone did not lead to the
reduction of groundwater resources in the area
of drilling.
• The fracturing did not cause any vibration or
paraseismic effects on the surface that may
pose a threat to buildings or infrastructure.
23. What could the discovery of shale gas in Poland change in
terms of energy and climate policy ?
• Extraction of shale gas and its share in the energy
balance of the country could mean help in achieving the
strategic objective of both the Polish and EU energy
and climate policy, which is primarily a change in the
energy balance,and growth in energy sources greener
than coal
• In case of shale gas production, it would mean, on the
one hand, diversification of gas sources, which is a
prerequisite for ensuring energy security and on the
other hand, significant reduction of emissions from
combustion. With the increased use of natural gas,
Poland could obtain such reduction of greenhouse gas
emissions, reduction of air pollution from the energy
sector and energy efficiency
24. Additional Conclusions
1. Polish energy policy assumes a diversification in energy sources and their
coexistence. Thus, in the energy "mix„ there is a place for coal, conventional and
unconventional hydrocarbons, nuclear material and RES, balanced so as to provide
national energy security. The mentioned "mix" is qualitatively similar to that in
other EU countries, but with various accents put on some of its components.
2. It is necessary to analyze and assess the impact of the development of production
and consumption of natural gas from unconventional sources (mainly shale gas) on
the overall socio-economic issues in Poland , also taking into account environmental
concerns and energy security of the country.
3. The results of such studies could also provide an appropriate basis for
development of a legal, organizational, economic, political, environmental and
social model, to enable appropriate and socially acceptable incorporation of areas of
exploration and production of natural gas from unconventional sources in the legal,
economic and social framework, in force in Poland .
25. ADDITIONAL MACRO ISSUES AND QUESTIONS
• The Shale Gas Revolution in North America has led to the “Re-Industrialzation
of the USA”. Some major European companies are relocating their
European heavy chemical plants to the USA. Is this in our interest?
• China, South Africa , South America and soon Russia will
develop their shale gas deposits. What will this do to the economic
competiveness of Europe and the work opportunities for our children?
• Brussels and the EU companies do not yet have significant experience
in technical and regulatory issues related to shale gas. Perhaps both we
and Brussels should spend more time with North American jurisdictions
that have spent years developing shale gas policy and regulations.
Of course, we should supperimpose on this our European
environmental specificities. Should we treat shale gas as only an EU issue?
• Shale gas has already changed the world. Should we be part of this?