Energy Dept. Requests More Shale Gas Safe Guards

Companies engaged in shale exploration such as Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX) and Anadarko (NYSE:APC) saw some negative news last week as the Energy Department subcommittee report called for more action to prevent major environmental damage and to avoid a public backlash against shale drilling. ^[1] Efforts from some of these companies to replicate the shale boom in Europe were also put in doubt from the initial analysis of Bernstein Research that questioned the possibility of mass exploration in Poland.

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The U.S. Dept. of Energy panel headed by former CIA director John Deutch said that companies and governments were not taking sufficient steps to address the environmental risks posed by shale exploration. ^[2] The panel outlined 20 steps to reduce groundwater contamination and air pollution resulting from the practice of hydraulic fracturing. However the panel did express disappointment that more progress could not be achieved to help improve the recommendations that had been outlined in the draft report released in August.

In another independent development Bernstein Research said that according to its analysis, a shale exploration boom in Europe would be a distant prospect as results from initial wells were not encouraging. ^[3] Bernstein research analysts quoted low flow rates and the lack of fresh water as the major reasons due to which shale exploration in European countries would be limited. Exxon and Chevron are among the players that is taking part in the initial shale exploration activity in Poland.

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1. RPT-UPDATE 1-US faces shale gas backlash without action-panel, Reuters [↩]
2. Progress on Shale-Gas Issues Not Sufficient, Panel Says, Bloomberg [↩]
3. No Shale Boom in Europe as First Wells Struggle, Bernstein Says, Bloomberg [↩]