* Chevron suspends exploration work in eastern Romania
* Local protesters are blocking access to the site
* They say drilling could pollute water supply
* Chevron says its activities are safe, wants dialogue
By Luiza Ilie
PUNGESTI, Romania, Oct 27 (Reuters) - The small hilly townof Pungesti in eastern Romania could be sitting on vast reservesof shale gas and U.S. energy major Chevron wants to findit.
But the people of Pungesti want nothing to do with it.
Though most of them live off subsistence farming, social aidand cash from relatives working abroad, they would rather staypoor than run what they say is the risk of ruining theirenvironment.
Villagers have set up camp outside the empty lot whereChevron aims to install its first exploratory well, blockingaccess and forcing the company to announce last week it wassuspending work.
"Our kitchens are filled with homemade jams and preserves,sacks of nuts, crates of honey and cheese, all produced by us,"said Doina Dediu, 47, a local and one of the protesters.
"We are not even that poor," she said. "Maybe we don't havemoney, but we have clean water and we are healthy and we justwant to be left alone."
The decision to stop work at Pungesti - which was to havebeen Romania's first shale gas exploration well - mattersbecause of the message it may send about how welcome shale gasis in eastern Europe.
Large parts of wealthier western Europe have shunned shalegas exploration because of fears about possible water pollutionand seismic activity from the hydraulic fracturing or "fracking"process used to release it.
The industry says the risks can be avoided.
While Britain decided this year to support shale gasexploration, France has a total ban citing ecological concernsand Germany is reviewing its position on shale.
In poorer, ex-Communist parts of the continent the need tobring in tax revenues, cheaper fuel supplies and jobs has shownsigns of trumping the concerns, but to what extent is not yetclear.
GROUNDED IN SCIENCE
Chevron, which has all the necessary permits for theexploration well at Pungesti, says it adheres to the highestsafety standards.
The exploration phase would last around five years and notinvolve fracking, the process whereby large amounts of watermixed with chemicals is forced into rock formations under highpressure to crack them apart and release natural gas.
Company executives met Romanian Prime Minister Victor Pontaon Monday while he was making a scheduled visit to Washington.
"Emphasis was placed on continuing activities responsiblyand safely for the environment, while at the same time givingcommunities the chance to have a conversation grounded inscientific data," Chevron said in a statement.
Asked to comment on local concerns, the company said ittests groundwater before and after drilling to make sure it isnot affected, carries out geological seismic surveys and keepsthe community informed at every stage.
In a detailed statement, it pointed to the widespread use offracking in the United States and elsewhere and said it "is aproven technology that has been used safely for more than 60years".
But it is struggling to convince the people of Pungesti.
Three public meetings held over the summer with Chevron andenvironment agency officials turned into shouting matches.Deputy mayor Vasile Voina says he believes people "were notsufficiently informed".
Sprawled along a bumpy road, the town of 3,420 people ismade of eight villages with narrow houses behind short, chippedpicket fences, fat orange pumpkins dotting small plots of landand apples drying in the sun behind window panes. It does nothave central heating or a mains water supply.
Even in this remote town, 340 km (210 miles) northeast ofthe Romanian capital Bucharest, the global debate about theimpact of "fracking" has permeated.
Several people said they had gone on YouTube to watchexcerpts of the 2010 U.S. documentary "Gasland," which purportedto show the environmental damage caused by shale gas production.
The energy industry disputes allegations made in the film,but it, and other sources, including activists and local clergy,have influenced opinion in Pungesti.
People say heavy equipment will ruin their roads. They fearfracking will cause earthquakes and pollute their water, riskingtheir health, their cattle and their vegetable gardens.
"If they put wells they will destroy farming," said AndreiPopescu, 22.
Prime minister Ponta has spoken of potential shale benefits,especially for a poor area like Vaslui county, which includesPungesti. It receives heavy subsidies from the state.
"Without investment, we can't pay wages and pensions.Projects can be improved ... but we cannot block investment,"Ponta has said. He toppled a previous government in May 2012partially on an anti-shale message but his government has sincethrown his support behind the project.
Chevron said studies by the U.S. Environmental ProtectionAgency and the Ground Water Protection Council had confirmed nodirect link between hydraulic fracturing operations andgroundwater contamination.
It says direct benefits include jobs and payments tocontractors and suppliers and, during the production phase,taxes and royalties.
Some local people say they doubt the project would generatemany jobs, or that they are qualified for them. If there is tobe progress and investment, they say they would prefer avegetable processing plant, abattoir or wind energy park.
"They could do anything else, why settle on undergroundgas," said Daniel Ciobanu, a 40-year-old farmer.
For all the concerns in Pungesti, many people in easternEurope welcome shale gas. Governments in Poland, Lithuania,Romania and Ukraine are all keen to encourage exploration,although in Bulgaria it is banned.
In Poland, the industry's biggest shale gas hope in mainlandEurope, exploration drilling is underway on several concessions.The country, with a history of conflict with Moscow, sees shalegas as a way of reducing dependence on Russian gas imports.
Yet even in Poland, some local people, backed byenvironmental campaigners, have staged protests. At one ofChevron's Polish shale gas concessions, near the village ofZurawlow, local people occupied a work site when contractorsstarted trying to erect a fence.
Around 800 locals, neighbours, activists and the clergygathered for a protest next to Chevron's concession in Pungestilast week. In sunny but icy weather, they carried banners thatread Stop Chevron, Resist and God is with us.
Clad in his black habit, Father Vasile Laiu, an Orthodoxpriest from the nearby city of Barlad and one of the mostoutspoken local opponents of fracking, asked people to kneel,then led them in prayer.
Up to 50 villagers that have been taking turns staging around-the-clock vigil, blocking access to the lot, said theywere preparing for a long haul. They have pitched tents and duga lavatory pit.
"Can we live without water?" one of them asked the crowd ona microphone. The air carried faint smells of incense.
"No," the demonstrators replied.
"Can we live without Chevron?"
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