Mission Possible unconventional hydrocarbons in the future polish energy mix

1. MissionPossibleunconventionalhydrocarbons in the futurepolishenergy mix Sławomir Brodziński Under-Secretary of State, Chief National Geologist Ministry of the Environment Poland

2. Polish present energy mix Source: EU Commission, EnergyStatistics, update: Jun-15

3. Energy security – high ratio of hydrocarbons dependency Domestic-producedunconventionalhydrocarbonsareimportant for energysecurity – theyare a viablealternative for importedenergycarriers UHC consistalternativesource of energy for EU Poland EU Overrallenergydependency ratio 53,4% Energydependency ratio 25,8% - one of the lowest in EU. High dependency on import of hydrocarbons - 88% of oil, 65% of naturalgas. Higherhydrocarbondependencythan EU average - oil 91% and naturalgas 74%. Hydrocarbonsare a significant component of EU primaryenergy mix – 54% and EU electricitygeneration mix - oil and naturalgasareresponsible for 21% of electricityproduced in EU Hydrocarbonsare a significant component of Poland’sprimaryenergy mix – 37% but in Poland’selectricitygeneration mix – only 5,5%. Indigenousproduction of conventionalhydrocarbons in EU isfalling Production of unconventionalhydrocarbonswould suport Poland’senergysecurity. Source: EU Commission, EnergyStatistics, update: Jun-15

4. Poland’s Energy Policy 2050 – Aug’15 draft • Maingoals • Improvement of Poland’senergysecurity • Growth of economy’scompetitiveness and energyefficiency • Minimalisation of the energysectorenvironmentalimpact • 3 Scenarios • Sustainable • Alternative – nuclear • Alternative – naturalgas + Renewables

5. Why unconventional hydrocarbons are a viable alternative for Poland? Enhancingenergysecurity Environment-friendlysource of energydue to low CO2emission of naturalgas Feasiblepotential UHC in Poland: shale gas, tight gas, coalbed methane

6. Energy security – limited reserves of conventional hydrocarbons in Poland Source: Minerals Yearbook of Poland 2014

7. Feasible potential – shale gas According to the 2012 research by the Polish Geological Institute – National Research Institute (PGI-NRI) recoverable shale gas resources range from 346Bcm to 768Bcm. Which is equivalent of 35-65 years of cumulative gas consumption on Polish market.

8. Feasible potential – tight gas According to the 2015 geological survey of PGI-NRI, the most promising areas for tight gas exploration in Poland are Pomorze and Wielkopolska regions. Total natural gas volume in those areas most probably ranges from 1528 bcm to 1995 bcm and the recoverable resources are estimated to be between 150-200 bcm.

9. Feasible potential – coalbed methan More than 90% of coalbed methane resources are located in the Upper Silesian Coal Basin (230-250 bcm). The remaining 10% is divided between the Lublin Coal Basin (15bcm) and the Lower Silesian Coal Basin (2-5bcm).

10. Environment-friendly source of energy Based on the surveyconducted by PGI-NRI Exploratoryoperations, inc.hydraulicfracturinghave no permanent and significanteffect on environment for 3 yearsstarting from „0” leveltillcompletereclamation of area inc.baseline monitoring of 7 shalegasexploratoryboreholes

11. Why Poland can achieve its unconventional hydrocarbons goals? General public opinionsupport Experience Scientificresearch Qualified public administration UHC in Poland: shale gas, tight gas, coalbed methane

12. General public opinion suport UHC in Poland: shale gas, tight gas, coalbed methane Source: Public opinionsurvey by CBOS - May’13 and TNS Poland - Aug’13

13. UHC exploration and protected areas UHC in Poland: shale gas, tight gas, coalbed methane

14. Polish unconventional hydrocarbons experience 40 shalegasprospecting and explorationconcessionsissued 13 newapplications for shalegasconcessionssubmitted 29 frackingsexecuted, including 12 horizontaltreatments and 4 DFIT (DiagnosticFractureInjection Test) 70 explorationshalegaswellscompleted, including 16 horizontal The current hydrocarbonconventional and unconventional concessionsaremarkeddark grey, concessions applications light greyand 2016 tender areasred.

15. Scientific research • Environment • The environmental risk assessment of the prospecting, exploration and production of unconventional hydrocarbons – report published in 2015, guidancestbp in 2015 • „BLUE GAS”10-year shale gas R&D programme for industry and academia started in 2012 • White Book of Mineable Resources Protectioninitiative • Resources • Assessment of shale gas and shale oil resources of the Lower Paleozoic Baltic-Podlasie-Lublin Basin in Poland – 2012 • Assessment of tight gas resources –2015 • Assessment of shale gas and oil resources– tbp in 2015 • Economy • Report on economic effects of shale gas (joint project of Poland and United Kingdom)

16. Qualified public administration StateMining Authority – miningoperationssupervision ChiefInspectorate for EnvironmentalProtection Ministry of the Environment – concession authority General Directorate for Environmental Protection Polish Geological Institute – NationalResearchInstitute – geologicalsurvey

17. 2014 Geological and Mining Law amendment • GML amendmentaimed to: • Assurethat the Polish law isconsistent with the Hydrocarbons Directive (case C–569/10) • Ensure the energysecurity • Accelerate the hydrocarbonsexploration • Mainlegalchanges: • One licenseinstead of three • Introduction of qualification procedure • Obligatory tender procedure for hydrocarbons • Joint execution of license by severalentities (undercooperationagreement) • Shortenedlicensing and environmentalprocedures • Strengthenedenvironmental and licenseobligationsmonitoring • Increased benefits for eachlevel of self-government

18. All photographs courtesy of polskielupki.pl Thank you for your attention