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March 27, 2023

Gitenstein: Contracts with Chevron might expire due to moratorium on shale gas extraction

The US ambassador says Romanians will have to decide whether they want to pay for natural gas a price five times higher than the Americans pay.

US Ambassador Mark Gitenstein stated on TVR Info that he will discuss with Economy Minister Daniel Chitoiu about the moratorium on shale gas extraction, seeking to find out the reasons behind the decision and what the Romanian government will do next. He pointed out that he did not have a talk with the Premier on this issue, however the Premier knows the US’s position. The ambassador also pointed out that the new government wants to wait for a while before deciding whether the wells will be used. “My recommendation would be to at least find out whether there are shale gas deposits in Romania. (…) It doesn’t seem unreasonable to me for the government, now that it came back in power after eight years, to want to understand what technology will be used and to establish what strategy will be followed. (…) I can understand that when going from exploration to extraction, to drilling, fracking and extracting shale gas the situation will be different,” Gitenstein explained. Likewise, he pointed out that if the moratorium lasts too long the Romanian government’s contract with Chevron will not be applied. “Chevron has an exploration permit. The Romanian government and the Romanians will have to decide whether they want to pay for natural gas a price five times higher than the Americans pay. It’s possible there may not be shale gas deposits in Romania, in which case the price of natural gas will remain unchanged. But if there is a way of extracting shale gas without affecting the environment I believe Romanians would want to do that,” Gitenstein stated.

It’s Chevron’s duty to explain that the environment wouldn’t be affected

At the same time he pointed out that Chevron’s job is to explain to the Romanian public that the extraction does not affect the environment, however he will present to the Economy Minister documents concerning the American plan to extract shale gas. “If you decide there are shale gas deposits and you will want to mine them there will have to be a transparent plan that would assure people that the environment will not be affected. This is how we did it in the US, where a commission was set up within the Department for Energy, the so-called Deutch commission,” Gitenstein added. He considers that it would be wise for the Romanian government to analyze this plan. “If this is the reason for the moratorium I believe this would be a good idea. (…) I will present them (the documents – editor’s note) to the Economy Minister,” Gitenstein stated. The ambassador underlined that he understands the worries concerning the environment impact, such worries being present in the US too. “In the United States there are 11,000 wells in whose case the mining is done through fracking, so this technique is used a lot. Although there are concerns, we have good regulations, the process is transparent and we obtained great successes without consequences for the environment I dare say. Fracking is already used in the case of 90 per cent of Romanian wells, so banning its use would entail closing 90 per cent of existing wells. I don’t believe it’s a very good approach,” Gitenstein concluded. Referring to these concerns, President Traian Basescu stated on Friday during his meeting with Richard Morningstar, special envoy of the United States Secretary of State for Eurasian Energy, that a strategy would have to be developed in order to explain to Romanians that extracting shale gas does not entail serious risks, Mediafax informs. US Ambassador and Presidential aide Cristian Diaconescu also attended the meeting that took place at the Presidential Palace. Ponta Government plans to place a moratorium on the extraction of shale gas until the ongoing European studies on the environment impact of this activity are finalized.

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