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Nov 13, 2021
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Kiev exchanges black soil for shale gas

Kiev exchanges black soil for shale gas

Photo: Alexey Pavlyshak / TASS

Kiev intends to return to discussing joint projects for the extraction of shale gas in Ukraine with Washington. This was stated by the Minister of Foreign Affairs of “Nezalezhnaya” Dmitry Kuleba

The Foreign Minister, as part of an official Ukrainian delegation, paid a working visit to the American capital this week, where the renewed Charter on Strategic Partnership between Ukraine and the United States was signed. Taking into account the general principles of today related to countering Russia.

Also, according to Kuleba, he had a substantive conversation in Washington about how to strengthen Ukraine’s energy stability this winter, and what the United States can do for this. Because, as he noted, these issues “will be inextricably linked to security.”

Russian Ambassador to Washington Anatoly Antonov has already called the US-Ukrainian document on partnership a set of “harmful slogans” that are aimed solely at aggravating the situation.

But it is unlikely that the parties in this case had any other task …

Perhaps more attention deserves Kuleba’s answer to a question from an Ukrinform journalist who inquired about plans for joint development of Ukrainian shale gas fields with the Americans. It turned out that this time the topic was not raised. But, as the minister said, “there is an energy dialogue between Ukraine and the United States, where these issues will be discussed.” True, with whom and when specifically, he did not explain.

It is quite indicative that the Ukrainian oil shale was updated literally hot on the heels of the climate forum in Glasgow, the participants of which (and the President of the United States Joe Bidenincluding) spoke with great concern about the sad future of our planet in the event that countries fail to agree on a significant reduction in greenhouse gas emissions.

But, as it turns out, neither the United States nor Ukraine is going to abandon the barbaric method of shale gas extraction.

Barbarian, because the method of hydraulic fracturing (or fracking), which is the basis of shale mining, is so harmful to nature, poisoning the soil and groundwater, that many countries, even with large deposits, do not develop them.

Ukraine, in its age-old dream of energy independence from Russia, is apparently ready to do anything – even turn its fertile black soil into a lifeless lunar desert. Moreover, the US Department of Energy has already calculated: the reserves of “shale” on the territory of the “Square” amount to 7.03 trillion. cubic meters, which brings it to fourth place in Europe.

However, other different sources estimate these resources in a fairly wide range – from 2.5 trillion. up to 60 trillion. cubes.

But is there any point in ruining the country for the sake of illusory gain? After all, in any case, the beneficiary, most likely, will be American companies?

Why this will be the case “SP” told President of the Foundation “Foundation”, a well-known expert in the field of energy Alexei Anpilogov:

– In fact, if we talk about the shale revolution as such, then this is a rather interesting economic “artifact”, which for some reason only happened in the United States. That is, we have shale production in the United States, but for some reason we do not have it practically anywhere in the world.

It would seem that our geology is the same everywhere – well, somewhere more, somewhere less, somewhere deeper, somewhere closer to the surface. But shale gas and shale oil are produced only in the United States – not in Canada or in Mexico, which are nearby.

“SP”: – Why?

“It’s not just pure geology — although it’s too. The thing is that in the United States there were, one might say, unique conditions, and, moreover, everything that could be taken into account as a plus, everything as a plus was taken into account.

The deposits are located fairly close to the surface. A very developed service and oil refining infrastructure – practically the whole country is enmeshed in oil pipelines and gas pipelines. And most importantly, but which is always talked about in passing, it is very liberal, financial, environmental, political, and so on, favorable for oil shale production. agenda.

In fact, there was massive government support in the United States. There were soft loans. There was, one might say, a catastrophic softening of environmental legislation. It started under Obama and continued under Trump.

And now, when Biden simply said that he would return to the rules that existed before the start of the shale revolution – until 2007 – regarding the protection of water resources, the financial flow immediately simply went shallow.

The banks realized that in these new environmental conditions, US shale companies would not be able to extract shale oil and shale gas as cheaply and efficiently.

To this we can add that this whole shale epic, it also fit into the quantitative easing, which was undertaken by the US financial authorities after the 2008 crisis. This rapid, generally insane growth began at the very moment when not just billions, but hundreds of billions of dollars were pumped into the US economy. Of course, the banking institutions, which were hit by this “golden rain”, they were looking for investment objects. And the government-backed oil shale industry has become such an obvious target.

“SP”: – Why, then, the shale fever bypassed the same Europe?

– Because nowhere else in the world such conditions have developed. Not in Europe, which suffers from gas shortages. It would seem that in Poland there is shale gas, there is in Germany and in France – they do not produce it. Not profitable.

In China, which is highly dependent on gas imports, in India, which is simply wasting away without gas – nowhere in these countries, which are as badly in need of additional gas resources as the United States, has shale gas soared.

Moreover, there was a study, if I am not mistaken in 2011, of the well-known consulting company KPMG, which simply took and calculated in those prices how much natural gas would cost, start producing it in European countries or in Ukraine. This is already a comprehensive assessment, which takes into account just the cost of money, and the limitations of environmental legislation, and the geological conditions of the layers. Because, again, in the United States, shale gas at very shallow depths is one to two kilometers, and in Europe it is five to six kilometers.

So, it turned out that the cost of extracting such shale gas, for example, for Ukraine, is from 200 to 300 dollars per thousand cubic meters.

“SP”: – Is it advisable from an economic point of view?

– Before our last price boom, mining was absolutely unprofitable. And, accordingly, it became such a wake-up call for investors – you cannot invest here.

By and large, the now well-known company “Burisma” did not come for shale gas. There are traditional gas deposits in Ukraine, and they, in general, sat down on them. Then, we know now that it was an absolutely corrupt scheme. That this gas could be produced by the Ukrainians themselves, but under the export of capital, under the general corruption scheme, they put a good-for-nothing Hunter Biden, which is the whole thing and screwed up successfully.

Now, as we can see, the situation has changed. Gas in Europe is breaking price records. And Ukraine itself has problems – it is deficient in gas.

But the question arises, is it possible in this case to apply an equation with components that affect the cost of shale gas? These are – I will emphasize again – regulatory legislation, the cost of financial resources, geology and infrastructure development.

“SP”: – And what is the answer?

– Ukrainian shale gas, as I said, lies deep and difficult to extract. Infrastructure is a big dash. The cost of financial resources – do not tell my sneakers, as they say.

In Ukraine, money has never been cheap, much less as cheap as in the United States. Again, even if American companies enter the Ukrainian market, their banks are financing based on country risk.

There remains only the fourth parameter – the regulatory legislation, which can, let’s say, be liberalized. But in fact – to destroy. Eliminate completely natural legislation so that shale gas is produced in even more barbaric conditions than in the United States, where gas in their water pipes burns.

In Ukraine, shale gas is two provinces. The first is Kiev, Cherkassk, Poltava regions, the second is Kharkov, part of Dnepropetrovsk and Donetsk. And you need to understand that both of these belts lie in densely populated, rich in black soil agricultural areas. This is not some kind of North Dakota, an underdeveloped, by and large, American northern state, with a small population. A densely populated agricultural area.

But in this equation of four terms, the only thing that Ukraine can appeal to is precisely environmental regulatory legislation.

“SP”: – That is, it, presumably, will be adjusted to the necessary “standards”, despite the consequences?

– It’s just that companies will be given carte blanche – drill, drip, mine, no one will come to you, ask about the protection of groundwater, about flaring etc.

And in this, of course, there is the main danger that the extraction of shale gas in Ukraine will proceed in a barbaric way in order to ensure its prime cost. Aquifers will be polluted, and, accordingly, soil fertility will be lost, there will be all the problems that we saw in the United States, but only in an even more cruel, cannibalistic version.

It is clear that the population in Ukraine is completely disenfranchised. Zero legal literacy. These are not Americans who will immediately hire lawyers for any sneeze.

Again, the example of Burisma shows that this gas will immediately go into some kind of corruption schemes – that is, will not serve Ukraine, but will be resold through these schemes to the European market.

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