Fracking in Ukraine

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Fracking in Ukraine has been used since the 1950s. The first fracking operation in Ukraine was conducted in 1954 for the underground coal gasification project. [1] There has been a strong revival of interest in the fracking industry in Ukraine. [2] According to the U.S. Energy Information Administration, Ukraine has third-largest shale gas reserves in Europe at 128 trillion cubic feet (3.6 trillion cubic metres). [3] As of 2011, approximately 22 domestic and foreign-owned companies have been engaged in fracking in Ukraine. [4]

Contents

Obstacles

At least two companies have backed out of a deal to extract shale gas in Eastern Ukraine due to the threat of military action in that area. [5] There are also other challenges to hydraulic fracturing in Ukraine, such as a lack of a proper regulatory framework for its development, opposition of major EU partners to hydraulic fracturing which may seek to influence Ukraine (France, for example, has an outright ban). Ukraine's shale gas reserves are also deeper than those in the United States, and thus production is bound to be more expensive, which may make it cost-prohibitive, depending on the prevailing market prices for gas. [6]

Uncertainty

Constitutionally, Ukraine's natural resources belong to the people, with government acting as a trustee. A private investor needs to execute a production-sharing agreement, but is never entitled to 100% of its production, as it has to be shared with the state. The level of potential public opposition to hydraulic fracturing also creates uncertainty. On the positive side, Ukraine continues to vigorously pursue reforms designed to achieve energy independence, which portends well for hydraulic fracturing as a helpful option in that regard. [7]

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Countries using or considering to use fracking have implemented different regulations, including developing federal and regional legislation, and local zoning limitations. In 2011, after public pressure France became the first nation to ban hydraulic fracturing, based on the precautionary principle as well as the principal of preventive and corrective action of environmental hazards. The ban was upheld by an October 2013 ruling of the Constitutional Council. Some other countries have placed a temporary moratorium on the practice. Countries like the United Kingdom and South Africa, have lifted their bans, choosing to focus on regulation instead of outright prohibition. Germany has announced draft regulations that would allow using hydraulic fracturing for the exploitation of shale gas deposits with the exception of wetland areas.

<span class="mw-page-title-main">Fracking in Canada</span>

Fracking in Canada was first used in Alberta in 1953 to extract hydrocarbons from the giant Pembina oil field, the biggest conventional oil field in Alberta, which would have produced very little oil without fracturing. Since then, over 170,000 oil and gas wells have been fractured in Western Canada. Fracking is a process that stimulates natural gas or oil in wellbores to flow more easily by subjecting hydrocarbon reservoirs to pressure through the injection of fluids or gas at depth causing the rock to fracture or to widen existing cracks. New hydrocarbon production areas have been opened as fracking stimulating techniques are coupled with more recent advances in horizontal drilling. Complex wells that are many hundreds or thousands of metres below ground are extended even further through drilling of horizontal or directional sections. Massive fracturing has been widely used in Alberta since the late 1970s to recover gas from low-permeability sandstones such as the Spirit River Formation. The productivity of wells in the Cardium, Duvernay, and Viking formations in Alberta, Bakken formation in Saskatchewan, Montney and Horn River formations in British Columbia would not be possible without fracking technology. Fracking has revitalized legacy oilfields. "Hydraulic fracturing of horizontal wells in unconventional shale, silt and tight sand reservoirs unlocks gas, oil and liquids production that until recently was not considered possible." Conventional oil production in Canada was on a decrease since about 2004 but this changed with the increased production from these formations using fracking. Fracking is one of the primary technologies employed to extract shale gas or tight gas from unconventional reservoirs.

References

  1. Unconventional Gas in Ukraine. History of hydrofracking in Ukraine. 04.07.2013
  2. American Bar Association: Ukraine’s energy crisis may invite hydraulic fracturing and regulatory uncertainty
  3. U.S. Energy Information Administration. Technically Recoverable Shale Oil and Shale Gas Resources: An Assessment of 137 Shale Formations in 41 Countries Outside the United States. June 2013
  4. Miskun, Olena; Martsynkevych, Vladlena; Simon, Antoine. The Dash for Gas in Ukraine: Current trends in the production of unconventional reserves (PDF) (Report). CEE Bankwatch Network. p. 3.
  5. Shell, Chevron, pull out of fracking deals in Ukraine citing the war with Separatists and Russia. David Herron. June 11, 2015
  6. American Bar Association: Ukraine’s energy crisis may invite hydraulic fracturing and regulatory uncertainty
  7. American Bar Association: Ukraine’s energy crisis may invite hydraulic fracturing and regulatory uncertainty