Romania and fracking

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According to Chevron's 2012 annual report, the corporation has acquired leases for more than 3.7 million acres in Eastern Europe and has won bids for another 2.7 million. The largest leases were awarded by Romania: over two million acres on the Black Sea coast.[1]

The Romanian government publicly announced 30-year concession agreements for fracking with Chevron on March 22, 2012. In May 2012, the government temporarily suspended permits for shale gas exploration while waiting for the results of the EU's environmental studies on drilling shale. In March 2013, Prime Minister Victor Ponta announced that the moratorium on shale gas exploration in Romania had been lifted.[2]

History

In August 2010, the U.S. Department of State launched a program to promote the extraction of shale gas in other countries, called the “Global Shale Gas Initiative.” It was led by David Goldwyn, then the State Department Coordinator for International Energy Affairs. Two years later, Goldwyn held a three-day conference in Bucharest to inform Romanian lawmakers about the benefits of shale gas. The conference was funded by Chevron.[1]

U.S. Ambassador in Romania Mark Gitenstein urged the country to sign deals with Chevron to increase domestic gas supplies. Gitenstein was previously a partner in the Washington DC–based law firm Mayer Brown, which received $390,000 from Chevron for lobbying between 2005 and 2011, according to documents obtained from the U.S. Senate Office for Public Records. Gitenstein has owned stock in 17 companies, including ExxonMobil, which has operations in Romania.[1]

The Romanian government publicly announced 30-year concession agreements for fracking with Chevron on March 22, 2012, at the same time that thousands of Bulgarians took to the streets and forced their Government to revoke the deals it had with Chevron.[1]

Reserves

The EIA has estimated 51 trillion cubic feet of unproved technically recoverable wet shale gas in Romania. The estimate is speculative, as no exploratory drilling has been done. Romania's National Agency for Mineral Resources has launched a study to determine the level of national shale gas resources.[2]

Royalties

Romania has some of the lowest royalties in Europe, according to an oil and gas tax guide published by the international accounting firm Ernst & Young. The energy companies must pay between 3.5 and 13% of the value of the gas they extract, depending on the output, plus a 16% income tax, adding up to between 19.5 and 29% from the revenue.[1]

Unlike in the U.S., landowners in Romania do not get a share of the cash generated from the natural gas extracted from their land - they go straight to the state budget of the country. A cross-border investigation conducted by the Romanian Centre for Investigative Journalism and the New England Center for Investigative Reporting concluded that U.S. and Romanian officials with ties to energy companies advocated to the Romanian Government for the royalty arrangement.[1]

Public opposition

When the shale gas deal went public in 2012, over 3,000 citizens from Bârlad protested in the streets - a small town in the area where Chevron wants to start drilling. The main opposition party, the Social Liberal Union (USL), publicly supported the protest.[1]

On October 14, 2013, hundreds of Romanian villagers in Pungesti blocked a convoy of vehicles intending to start test drilling on a nearby field where Chevron plans to start drilling its first shale exploration well. The convoy was forced to turn around as protesters, some of whom had come in horse-drawn carts, called on Chevron to "go home". The protesters also called on Prime Minister Victor Ponta to resign, accusing him going back on pledges to block shale gas drilling before he took power by granting Chevron exploration permits.[3]

Resources

References

  1. 1.0 1.1 1.2 1.3 1.4 1.5 1.6 Vlad Ursulean, "Fracking—The U.S.- Romania Connection," New England Center for Investigative Reporting and the Romanian Centre for Investigative Journalism, August 9, 2013.
  2. 2.0 2.1 "Romania," Shale Gas Europe, accessed Aug 2013.
  3. "Romania anti-fracking protesters block Chevron test drilling," AFP, Oct 14, 2013.

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