Shale gas. You’d think a country that depends on imports for 39% of its energy needs must have limited indigenous reserves, but in Ukraine’s case the opposite is true. The country already produces a significant amount of natural gas and oil domestically using conventional means, and its reserves of recoverable shale gas — gas that must be extracted using newer technology such as fracking — are estimated at 42 trillion cubic feet. That’s over 500 times the country’s current annual rate of consumption. Two major basins where shale gas is known to exist in quantity stretch across the country’s northeastern and southwestern expanses, making it one of Europe’s most promising prospects for new gas exploration.
The International Energy Agency says Ukraine could eliminate its reliance on Russian gas imports by more vigorously developing indigenous sources while moving forward on renewables and initiatives aimed at reducing waste. But Kiev lacks a legal and regulatory framework for stimulating the shale oil sector, and exploration for unconventional sources of fossil fuel didn’t even begin until 2010. Washington has signaled an interest in helping Ukraine to develop its shale-oil reserves, an area where U.S. industry leads the world. What is needed now is an aggressive package of financial incentives and regulatory protections that would encourage international energy companies to focus on Ukraine so that commercial production for domestic use can commence.
Clean coal. Ukraine is one of the world’s largest producers of coal, and has significant unused mining and distribution capacity owing to a decline in output following collapse of the Soviet Union. It would be a relatively straightforward project to convert the country’s 22 large thermal plants generating electricity and heat from natural gas to clean coal. The U.S. company Babcock & Wilcox estimates the five biggest plants could be converted in 24-36 months using U.S. technology and the local workforce, at a cost of $200-250 million per plant. It says that if all 22 plants were converted, the country’s ten-year energy savings — coal costs less than gas — would be $22 billion. (Disclosure: Babcock & Wilcox is a modest contributor to my think tank.)
Clean coal has not been a prominent part of proposals to achieve energy independence in Ukraine, but in some ways it is the most attractive near-term option. The country already has capacity to produce more coal and the boiler-conversion process from gas to coal is well understood. Conversion would stimulate the local economy while providing an opportunity to install modern pollution-control equipment to capture noxious gases and particulate matter. And although carbon dioxide generated by burning coal is often cited as a cause of climate change, the methane escaping from creaky Soviet-era gas distribution networks is actually 85 times more potent over a 20-year period in contributing to greenhouse effects. Babcock & Wilcox says a federal loan-guarantee program could jump-start clean coal efforts in Ukraine.
Renewable energy. Ukraine only meets about 1% of its energy needs today using renewable sources, but the International Energy Agency and other authoritative sources say the country has huge potential to generate energy from hydropower, biomass, wind and solar collectors. The most developed renewable source is hydropower, which provides about 6% of electricity needs and has installed capacity equivalent to 10% of electric consumption. Wind energy potential for the country is estimated at 30,000 gigawatts, with about half the country suitable for siting of wind farms. And the country has been making rapid progress in deploying solar equipment — although current solar installations have less than 1% the capacity of Germany’s, a country that gets less sun.