1. Unconventional energy sources - a new European perspective?
Energy Security: How to ensure supply for the EU and its neighbours?
29th April, Pécs, Hungary
Unconventional energy sources - a new European perspective?
Istvan Gyerman
University of Pecs, Faculty of Business and Economy

2. Unconventional energy sources – a new european perspective?
Conventional vs. Unconvenctional
Unconventional gas in the USA and world shale gas resources in the world
Unconventional gas resources in Europe
Unconventional gas projects in Europe
Conclusion
Energy security: How to ensure supply for the EU and its neighbours?
29th April 2011.

3. Conventional vs. unconventional
Accumulations in medium to highly porous
reservoir with sufficient permeability to allow
gas to flow to producing well
Pressure regime tends to move gas towards
producing well (i.e. natural flow)
Unconventional
Deposits of natural gas found in relatively
impermeable rock formations (tight sands, shale
and coal beds)
To get resources out of the ground, artificial
pathways (fractures) have to be created
Key technologies: horizontal drilling and
Modern, hydraulic fracturing techniques
Consequences
Need to understand geology better
Need for much higher number of extraction points
Source: DTE Energy, EON (2010)
Energy security: How to ensure supply for the EU and its neighbours?
29th April, 2011.

4. Unconventional gas in the USA and world shale gas resources by region
US: share of unconventional gas in the total gas output jumped from 44% (2005) to 50 (2008) and projected to rise to almost 60% (2030)
National Petroleum Council (NPC): 34,7 TCM
IEA: 35 TCM
CERA: 3-12 TCM
IEA: 35 TCM these reserves are enough to substitute natural gas imports for 40 years at current levels
Source: IEA 2009b
Source: Rogner 1997, Kawata & Fujita 2001, Makinen 2010.
Energy security: How to ensure supply for the EU and its neighbours?
29th April, 2011.

5. Unconventional gas resources in Europe
Europe holds diverse inventory of unconventional gas
Individual size and resource potential in Europe is in same order of magnitude as typical North-American basins
Three major European shale gas basins: Poland, Northern Germany, and Southern North Sea
No production of unconventional gas established yet
Shale gas Tight gas Coalbed methane
Source: Schlumberger, 2009, E.ON 2010.
Geological potential of European region to be utilized in order to improve energy supply!
Energy security: How to ensure supply for the EU and its neighbours?
29th April, 2011.

6. Unconventional projects in Europe - challenges
Shell
• Three-year
exploratory term in
the Cambrian Alum
in southern Sweden
• Acquiring seismic
data, drilling pilot in 2010
ExxonMobil
• 750,000 acres in Lower Saxony Basin
• Drilled 3 exploration wells
and another 10 wells planned
Geology and cost structure not well developed
Research phase
Mainly state owned mineral rights
difficulties with licenses and land acces (densily populated)
Environmental issues
Well costs
Eurenergy Resource
• Holds 123,000 acres in
southern England’s Weald Basin
• Five-year license for
exploration drilling
3Legs Resources
• Five licenses to
explore 1 million
acres in the Baltic
Basin region
• 3D-seismic and
drilling with
ConocoPhillips
ExxonMobil
• Holds 400,000 acres in Mako Trough in southeast Hungary
• Joint exploration
program with MOL
• $ 300 mn investment
Eurenergy Resource
• Awarded 1.3 million acres in East Paris Basin
• Starting drilling program in 2010
OMV
• Three-year project in Vienna
Basin; very deep
• Estimated shale gas potential
at ~ 430 bcm
Source: Wood Mackenzie (2009), E.ON (2010)
Energy security: How to ensure supply for the EU and its neighbours?
29th April, 2011.

7. Conclusions
Unconventional gas resources are smaller than in the USA
Unconventional geology not well understood in Europe
More difficult acces to resources than in the USA
Environmental issues
Costs
BUT:
Unconventional gas will reduce expected import needs and diversify EU supply in a long run
Energy security: How to ensure supply for the EU and its neighbours?
29th April, 2011.

8. Thank you for your attention!
Istvan Gyerman
University of Pécs, Faculty of Business and Economics
Doctoral School in Regional Policy and Economics
H-7633 Pécs, Rákóczi út 80
Tel: