The University College London’s School of Slavonic and East European Studies (UCL SSEES) hosted a workshop on 25 June 2012 to examine the prospects for shale gas and renewable energy in Central and Eastern Europe. This is a part of the world highly dependent on natural gas imports from Russia and, therefore, susceptible to supply and market price fluctuations, which are regarded as a major geopolitical issue. Energy dependence and rising energy costs have provided an impetus towards alternative sources and improved technologies.

Shale gas and renewable energy hold out the promise of reduced dependency on natural gas imports from Russia in the region, and substantially alter the balance of energy provision. One of the aims of the workshop was to examine the degree to which the regulatory frameworks in countries in the region support the adoption of these new technologies.

Some presentations and the complete audio documentation of the workshop are available at the UCS SSEES workshop website.

Main conclusion

The main conclusion of the workshop was that the shale gas option has considerably changed the geopolitical picture in Poland and Ukraine. There is a new dynamism developing as shale gas and renewable energy technologies are entering a territory already occupied by numerous players, among which Russia’s Gazprom is the most prominent.

Speakers and views

The list of speakers included experts from the spheres of academia, law, business, government, and policy makers. Speakers from the UK, Poland, Ukraine and China provided a comparative perspective and their in-depth view of specific legal and social issues surrounding shale gas exploitation and renewable energy. The workshop’s particular focus was on Ukraine and Poland, which have the largest estimated reserves of shale gas in the region.

Nat Moser, Research Fellow in Russian & CIS Energy, UCL SSEES, spoke about energy dependency in Central and Eastern Europe, stemming particularly from the supply gap of gas, and about developments in shale gas technology, not excluding the risks, such as ground water and soil contamination associated with shale gas extraction. He listed a number of key factors behind the development of US shale gas technology including large shale gas resources, advances in drilling technology, gas price increases, availability of credit, supportive regulatory regimes and government support, which may not necessarily be present in Central and Eastern Europe.

Wojciech Bagiński, foreign attorney, Siemiątkowski & Davies, Warsaw, presented the legal framework for shale gas exploitation in Poland, with a particular focus on the type of land ownership and the new legislation introduced in January 2012, as well as specific regulations on shale gas which are about to be published. He examined a number of risks which investors may want to consider before becoming involved in shale gas exploitation in Poland. This includes the uncertainty surrounding the new geological and mining legislation, which has not been tested yet, and the need for operators to obtain separate concessions for both the prospecting and exploration of shale gas, and the production phase.

Vitaliy Radchenko, Senior Associate, CMS Cameron McKenna, Kiev, discussed the legal framework for shale gas in Ukraine, which has one of the most energy-intensive economies in the world. He emphasized that gas constitutes the No 1 political issue for the country. Unlike Poland, Ukraine is not planning to introduce specific legislation for shale gas, in the belief that this would hinder rather than stimulate technological development and investments. 

Questions were asked about the dispute between Poland and the EU regarding the granting of shale gas concessions on a “first come first served” basis, which runs counter to the EU requirement that such concessions be put out to tender. The new legislation should address the problem in the future but it is unlikely that the concessions already granted without a proper competitive process will be withdrawn.

Peter Zeniewski, Scientific Officer, European Commission Institute for Energy and Transport, provided an overview of shale gas in the context of Poland’s broader energy policy, expressing the optimistic view that even without shale gas Poland should enjoy sufficient energy security. 

Greg Pytel, Senior Policy Expert, Sobieski Institute, Warsaw, was less confident about Poland’s energy position and stressed the logic of the South-North pipeline, which would reduce Poland’s vulnerability and dependency on Russia. He said that even if Poland becomes a significant natural gas producer, the country will still remain dependent on Russian gas imports.

Apart from shale gas, the workshop also focused on renewable and nuclear energy, and highlighted the issue of the lack of social acceptance of renewables. Mariusz Wawer, Associate Director, Euro RSCG Sensors, Warsaw, spoke about reasons why renewable energy projects, as well as shale gas exploitation, are met with local resistance. He regards the lack of credible sources of information and the active and vocal “not in my back yard” lobby, as the main reasons for the lack of social acceptance. He said that some politicians in Poland had built their political reputations by supporting protesters. To counteract often unfounded social fears credible sources of information are needed and investors need to get local “parish” politicians on their side.   

Gao Shuqin, Research Fellow, UCL SSEES, provided insights into renewable energy and long-term shale gas exploitation in China. She said that China has surpassed the US as the owner of the largest reserves of shale gas.