This case study examines how to manage political risk using a technology of extracting energy from controversy in the European Union. San Leon Energy, an energy company in Ireland, has been committed to developing large reserves of unconventional shale gas in Poland. To achieve these reservations, San Leon necessary to use a technique called hydraulic fracturing (“fracking”). Developed in the United States in the 2000s, fracturing involved pumping a mixture of water, sand and chemicals into a reservoir at high pressure to break up shale formations, releasing the gas flow well. The natural gas produced by this process has provided a substantially cleaner alternative energy coal. Furthermore, since large reserves of previously inaccessible shale gas is found in the United States, Canada, China and parts of Europe, hydraulic fracturing has the potential to revolutionize the industry of energy geopolitics. However, environmental groups and European Americans began to worry that fracking could contaminate local drinking water, generate air pollution, cause minor earthquakes, and crowd out investment in renewable energy alternatives. The Polish government has supported fracturing as a means to improve significantly the domestic gas production in the country and reduce its energy dependence on Russia. However, in 2011 and 2012, environmental events around the world have increased, causing several countries, including Bulgaria, France, Ireland, Romania and parts of Germany, Switzerland and the UK issue temporary bans fracture. From the direction of San Leon Energy Poland called “the heart of our business,” the company faces tough mitigate the concerns of environmentalists and prevention tasks ban fracturing Polish or European level.
by
Condoleezza Rice,
Amy Zegart,
Astasia S Myers
Source: Stanford Graduate School of Business
27 pages.
Release: September 11, 2012. Prod #: IB101-PDF-ENG
San Leon Energy: hydraulic fracturing in solving cases in Poland
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