Bulgarian miners want fracking ban lifted

Map of Bulgaria
Source: DollarPhotoClub

The Bulgarian Mining Association has approached the interim Prime Minister Georgi Bliznashki with a request to lift the ban on shale gas extraction through hydraulic fracturing – Sofia news agency Novinite reported yesterday.

At an event celebrating the mining profession, representatives of the Bulgarian Chamber of Mining and Geology handed Bliznashki a list of demands, vowing to support the preparation of fair early elections on October 5 in exchange.

Bulgarian miners insisted that shale gas would provide an opportunity for the diversification of gas supplies and for reducing prices of natural gas. They also believe that dropping the ban on shale gas exploration in Bulgaria would make it easier to clarify the risks and the potential for diversification of gas supplies using shale.

Despite lacking in economic energy resources (which consist primarily of a single deposit of low grade lignite) and its almost full dependence on Russian gas, Bulgaria has banned shale gas extraction through hydraulic fracturing. However, given the dire situation of the country’s mining industry, the problem of shale gas extraction repeatedly re-emerges in political debate.

Only last month, the Bulgarian Institute for Market Economics issued a report which estimated that shale gas exploration could introduce more than 25,000 new jobs to Bulgaria’s economy. The estimates rose to 39,000 new jobs if full production potential is realized. This for a country with 12% unemployment – compared to 6.40% in the UK and 6.20% in the US – is something not to be scoffed at.

Another assessment, made by prof. Nikolai Vulkanov during the “Geology and carbon potential of the Balkan – Black Sea Region” conference, estimates that shale exploration in Bulgaria could create as many as 300,000 new jobs.

Natural gas meets roughly 13% of Bulgaria’s current energy demand, but only 10% of it is produced domestically. With 120 dollars per ton, shale gas extracted in Bulgaria would be 3-4 times cheaper than the current 500 dollars per ton exports from Russia, Vulkanov noted. The IME report also predicted that should Bulgaria decide to open the road to shale gas extraction, it would accelerate the annual average economic growth rate by 0.6 %, or 238.4 million Euro per year and increase the GDP by 20% in the long term.

However, many ask themselves whether Bulgaria hasn’t left it too late to embrace shale. According to the assessment of the U.S. Energy Information Agency, Bulgaria has nearly 480 billion cubic feet of potential shale gas and 180 million barrels of shale oil. This in comparison to the Polish 148 trillion cubic feet of technically recoverable shale gas does not seem much. Also, it’s a long way from lifting the ban on fracking to creating a genuinely favourable climate for foreign investment.

As if to confirm these concerns, U.S. oil and gas giant Chevron – the only major exploration company with licences in Bulgaria – announced today that it is leaving the inhospitable country.

In 2011 the company received a permit to extract shale gas in northeastern Bulgaria, but then the country imposed a moratorium on activities using fracking for gas extraction. This, along with anti-fracking demonstrations and the lack of popular support for shale, made exploration work impossible.

Despite the withdrawal from Bulgaria, Chevron will continue its projects in Romania and Poland.

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