Denmark is at a very early stage in the exploration of natural gas in shale (shale gas). It is not yet known whether it is possible to find shale containing natural gas in the Danish underground, nor, if it is commercially possible to produce natural gas from shale in Denmark.
Denmark is said to have a significant shale gas potential. Through a recent study of Denmark completed by US Geological Survey and The National Geological Investigations of Denmark and Greenland (GEUS), it was estimated that Denmark holds 71 billion cubic meters of shale gas. However, the estimates of the study are subject to considerable uncertainty, which reflects the fact that no shale gas has yet been found in Denmark.
The Danish government has an ambitious plan to divert the Danish energy system to be independent of fossil fuels. But fossil fuels will be an important part of the energy system in Denmark as well as the rest of the world for many years to come. Consequently, the Danish government agrees that shale gas may come to contribute to the Danish energy supply.
The Danish government hopes that the production of oil and gas in Denmark can help finance the Danish welfare state. Exploration of oil and gas must of course be done in a responsible manner, both in terms of safety and environment. This also applies for shale gas.
A prerequisite for exploration and production of shale gas in Denmark is that the exploration companies obtain the permits and approvals required under Danish law – e.g. the Danish Subsoil Act and environmental legislation.
In 2010, under the previous regime, the Danish government awarded two licenses to the French energy company, Total, under the provisions of the Danish Subsoil Act. The licenses allowed the company to investigate the shale gas potential in two areas in Denmark.
Together with North Sea Fund (a Danish state-owned oil and gas company which, since 2005, has participated with 20% ownership participation in all new licenses), Total selected an area in Northern Jutland to do the first drilling. The purpose of the drilling is to examine whether there are deposits of shale gas in the Danish underground which are commercially viable to extract. To obtain the final permission to extract gas from the underground, the companies must convince the Danish Ministry of the Environment that it can be done without polluting the water or otherwise destroy the environment and nature.
The current Danish government temporarily stopped the authorisation of any further shale gas licenses in 2012. The suspension was imposed to further explore the possibility of promoting the production of shale gas in a safe and environmentally sound manner. It is not envisaged that the suspension will be lifted before the next election in Autumn 2015.
As in other European countries, the public in Denmark is demonstrating concern about the effects of the exploration of shale gas. A political party has proposed a parliamentary resolution on banning exploration and production of shale gas. The Danish Society for Nature Conservation and other groups of environmentalists are working to create awareness about the problems with shale gas.