LINDA WERTHEIMER, HOST:
For Europe, the turmoil in Ukraine has a lot to do with energy. Much of the continent depends on Russian natural gas that flows through pipelines crossing Ukraine. The crisis there is stirring a contentious debate in European countries: whether to follow the U.S. example and increase their own energy production drilling for shale gas.
Reporter Christopher Werth has the story.
CHRISTOPHER WERTH, BYLINE: Long before Ukraine made headlines, Anne Fielding had been campaigning in the towns of Lancashire in Northern England against shale gas.
ANNE FIELDING: Hello, can I give you a leaflet, it's about fracking?
UNIDENTIFIED WOMAN: What is it?
FIELDING: It's about fracking that's going to take place in this area.
WERTH: Britain has become a flash point for fracking, or hydraulic fracturing - the controversial method of pumping water and chemicals deep into shale deposits to release natural gas.
FIELDING: Several shale gas wells are planned in the county, and Fielding, a local resident, here, is determined to stop them.
People don't know what's going to happen. They don't know about the level of pollution and a lot of our information that's come from America has been really frightening.
WERTH: Many Europeans regard the U.S. boom in shale gas with trepidation. France and Bulgaria have even banned fracking. But Julian Lee of the Centre for Global Energy Studies in London says others look at the U.S. with envy. As a result of shale gas, U.S. natural gas prices have fallen to as little as a quarter of those in Europe and Lee says that raises big concerns over the competitiveness of European companies.
JULIAN LEE: If you are competing with manufacturers in North America, whose energy costs are a fraction of yours, you're looking at a very difficult situation.
WERTH: A more pressing worry, however, is energy security. On the whole, Europe imports at least a quarter of its natural gas from Russia. And Pavel Molchanov, an analyst at Raymond James, says that leaves Europe in a vulnerable position.
PAVEL MOLCHANOV: The historical backdrop here is that Russia has used natural gas supply as a weapon.
WERTH: Specifically, by cutting off that supply to Ukraine as it did in 2006 and 2009, and that affected the rest of Europe.
Malchanov says the current conflict in Ukraine is just another reason for European countries to develop their own shale gas industries, which has been sluggish so far.
MOLCHANOV: There is no commercial shale gas production anywhere in Europe today.
WERTH: For example, he says, Poland, the country that's been most active in shale gas, has only managed to drill about 50 exploration wells to date.
MOLCHANOV: Fifty wells, it's a laughably small number compared to various counties in North Dakota, or Texas or Oklahoma where there can be thousands of wells drilled per year.
WERTH: One reason for that slow pace: property rights. Paul Stevens, an energy expert at Britain's Royal Institute of International Affairs, says in the U.S., landowners own the rights to the minerals under their property. So Stevens says if he owns a piece of American land and a company wants to drill...
PAUL STEVENS: I will say with great pleasure and here are my bank account details, because if you discover any shale gas, it's mine so I get a slab of the action. In Europe, the subsoil minerals are the property of the state, not the landowner, so all the benefits and profits go to the governments.
WERTH: Which, he says, reduces the incentives for shale gas drilling. But the U.S. government is trying to help Europeans clear those types of hurdles. David Goldwyn of the Brookings Institution in Washington, used to lead the U.S. State Department's ongoing efforts to promote shale gas overseas. Among its projects, he says, is helping countries figure out just how much shale gas reserves they have.
DAVID GOLDWYN: The State Department's motive, particularly in Poland and Ukraine, was diplomatic because we saw that their political survival, their economic survival, depended on diversifying their sources of energy because they're so dependent on Russia for gas.
Ukraine imports roughly two-thirds of its natural gas from Russia and it's just started to explore for shale gas. That could come up when President Obama travels to Brussels later this month for a U.S.-European Union Summit. Goldwyn says shale gas has been on the agenda for past U.S.-EU summits and he says the goal this time should be to use American expertise to finally develop the region's nascent shale gas industry.
The White House and the State Department need to really prioritize this as one of the most important tools that Europe has to create better energy security. It's time to get this done.
WERTH: And shale gas developments could be part of the proposed free trade agreements between the U.S. and the EU. For NPR News, I'm Christopher Werth.
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