Why Russia Says Fracking Is Dangerous

Earlier story linked here.

We get the follow-up here.

A shale gas revolution in the U.S. poses new challenges to the development of Russia's giant Shtokman gas field in the Barents Sea, an executive at Norwegian energy major Statoil said Tuesday, just weeks ahead of a deadline to make a final investment decision.

The Shtokman project, which is 51%-owned by Russian state gas firm Gazprom, with Statoil and France's Total as minority shareholders, has been delayed on several occasions due to high costs and uncertainty on global energy markets.

"We are seeing a challenging gas market in Europe, the main reason being the shale gas revolution in the U.S. This has had a tremendous effect on the gas and LNG industry globally," said Jan Helge Skogen, head of Statoil in Russia.

"Shtokman was from the beginning required heavy and very large investment. This has become even more challenging over the recent year," he said.

More evidence that the center of energy gravity is coming back to the Americas.

This will be short-lived. The new EPA rules will effectively shut down the US domestic oil and gas industry in 2012. Among 500 pages of new rules and regulations that will eventually be published by the EPA, the "diesel rule" is currently grabbing all the attention. The industry saw this coming and had developed alternatives to diesel.

The EPA realized that and will now re-define diesel to be any carbon-hydrogen compound used for fracking. Of course the state of North Dakota will not accept that, lawsuits will be filed by faux-environmentalists, and a judge somewhere will issue an injunction to stop fracking.

Checkmate.