Shale gas has sparked a renaissance in the U.S. energy sector and is responsible for making North Dakota’s economy the fastest growing in the U.S. But efforts to tap into shale in Eastern Europe’s shale reserves have been stymied as major U.S. energy companies have abandoned their operations in Lithuania and Poland. And the Ukraine may be next. Meanwhile, Russia remains the largest producer of natural gas in the region.
Chevron Corporation (CVX) abandoned its plans to search for shale gas in Lithuania, citing the “fiscal, legislative and regulatory climate,” according to a story published Tuesday on Economy Watch.
In Poland, Exxon Mobil Corp. (XOM), Talisman Energy Inc. and the state-run Grupa Lotos S.A. have all abandoned their efforts to cultivate shale gas because of regulatory shortcomings and difficult geological conditions. A recent survey by the U.S. Energy Information Administration revised Poland’s recoverable shale gas reserves downward by more than 26 percent.
Shale gas in the Ukraine has failed for multiple reasons. Local demand is insufficient for the creation of a gas boom. Also, political instability and corruption have scared off most foreign investment in the sector.
Royal Dutch Shell (RDS.A) has poured $400 million into the Ukraine’s Yuzovskoye field, but it remains to be seen whether this investment will turn a profit.