I note with interest the recent protests against gas exploration in Bulgaria. Having faced similar protests by I suspect the same groups in the past and having participated in oil and gas exploration in Turkey and Canada, using fracking, I am likely well placed to comment on the current protests and concerns.

The geological terrain in Bulgaria offers considerable potential for shale-gas. How much might be there?  It’s not difficult to see 10TCF to 30TCF or more. If this potential is developed with suitable safeguards, it can provide Bulgaria with low cost, low carbon and low polluting energy, decouple gas and oil pricing and make Bulgaria independent of expensive gas "from the east".

Is it safe? While much has been said about the use of toxic chemicals in fracking operations, many operators use little more than lubricants used in cosmetics, hydrochloric acid and a biocide used for water purification.  Similarly there have been reports of methane in ground water and wells. Some reports as in the movie Gasland have been shown to be unrelated to shale-gas, others are more likely the result of shallow fracking operations or leaky near surface casings.  It is possible to effectively legislate best practice to minimise these risks and impacts.

The US Environmental Protection Agency is presently undertaking a  massive survey on the impacts of fracking on surface waters and the environment. Given that the US is the world leader in shale gas development this study is pivotal to understanding the risks and the benefits. To rush headlong into the proposed legislative ban on shale gas exploration would shut the door on the economic and social benefits that shale gas offers and would maintain Bulgarian dependence on expensive gas from the east. 

Finally let’s reflect on alternative energy sources.  A shale-gas field after development will likely have minimal environmental impact and be largely hidden from view with the operating company paying substantial taxes and royalties to the Bulgarian budget. Wind-farms on the other hand have a significant visual impact, have been implicated in significant bird and bat deaths, only work when the wind blows and appear to require a high level of ongoing support from the budget. 

If the Bulgarian people want an independent economy, control of their energy requirements, low cost and low carbon energy with minimal impact - shale-gas would appear to be one option worth careful consideration. 
 
John C Menzies
Cmi Capital Limited
the.chairman@cmi-capital.com