Shale gas firms to be brought under ‘robust’ new EU law
EXCLUSIVE / Shale gas companies operating in Europe will soon have to respect a muscular legislative package which the European Commission is preparing to publish in December or January, EurActiv has learned.
This will almost certainly take the form of an unconventional fuels directive, similar to other EU laws covering wastewater and environmental impact assessments.
“We will be proposing a legal framework for shale gas in Europe to minimise its risks,” a well-placed EU source said, speaking on condition of anonymity.
“Our intention is to provide clarity as to what the rules are for business, and investors, and to provide reassurance for the public in terms of the environmental impacts of shale gas and any impact it has on public health,” he continued. “And as the environmental impact of shale gas could be bigger than for conventional gas or oil, we intend to make sure that the environmental legislation is robust enough to cater for those risks.”
EU directives have a binding outcome, while allowing EU states leeway in reaching them. They are considered apropos for shale gas because the choice of energy mix is a national competence under the principle of ‘subsidiarity’, and member states cannot be stopped from exploiting it.
But if they choose to do so, the new proposal will oblige several tough environmental safeguards.
“It has to be a legal framework applicable across the EU and not just a vague set of guidelines,” the official said. “When that happens you are at the mercy of the various national systems and how they are applied, and if they are challengeable in court.”
The planned directive aims to ensure that the public is offered “the same level of protection” from the risks of shale 'fracking' as from other forms of energy extraction, he added.
The legislation will set down rules for dealing with the risks of:
- Venting and flaring of greenhouse gases
- Seismic disturbances
- Groundwater contamination and management of the water supply and reserves
- Impacts on air quality, and noise emissions
- Associated infrastructural problems caused by heavy industrial activity
“Methane is also an issue and comes under emissions,” the source added. “There will have to be some kind of monitoring of emissions, whether methane or other forms of air pollution. Everything needs to be covered.”
Such common rules would give industry certainty, predictability, and a level playing field across the continent, the EU believes. However, it will inevitably grate with energy intensive industries and several member states.
Earlier this summer, the UK’s finance minister George Osborne announced what he hoped would be “the most generous [tax regime] for shale in the world”.
On Friday (18 October), Chevron also announced that it was halting shale gas operations in Pungesti, Romania, after five days of local protests.
The EU’s Joint Research Centre says that shale gas drilling poses ‘high risks’ to the environment and human health, and the International Energy Agency says that even its greenest implementation would raise global temperatures by 3.5 degrees.
The IEA’s chief economist, Fatih Birol, told EurActiv last year that this outcome would be “unacceptable”.
But the industry counters that ‘green completion’ techniques involving the flaring or capture of methane emissions can greatly mitigate their effect on the climate.
“If you employ reduced emissions completion equipment, only a fraction of the methane emissions will go into atmosphere,” the US scientist, Dr David Allen told a Brussels conference organised by the International Oil and Gas Producers Association earlier this month.
In a sign that the lobby battle has spread to the laboratories, his conclusions have already been challenged by other US scientists from Cornell University.
Methane is a highly-potent short-lived greenhouse gas 86 times more powerful than carbon dioxide over a 20-year period and at least 34-times stronger over a century.
News that it may soon be regulated under an EU directive will relieve environmentalists who had been bracing for a fuzzier set of guidelines. Hopes for sturdy regulation had diminished as cheap energy prices rose up the Brussels agenda.
Commission sources differ on how fiercely the shale gas file has been contested by different EU directorates. The EU’s energy commissioner, Günther Oettinger, has spoken out for shale gas consideration several times, while the climate action commissioner, Connie Hedegaard has sounded a more cautious note.
The EU Commission president José Manuel Barroso, an ultimate arbiter, is thought keen to include the legislation in a wider energy and climate package, which could comprise areas such as tar sands, 2030 targets and even the Emissions Trading Scheme, which regulates greenhouse gas emissions in Europe.
Certainly, the shale gas legislation will be passed too late to be acted on by this Commission and will merely set the agenda for the incoming administration after European Parliament elections in May.
The world won’t wait
But in a speech that may seem retrospectively wry, the environment commissioner, Janez Potočnik, whose directorate has the lead on the shale gas file explained on Friday (18 October) why "the world won’t wait for elections".
“Many people seem to think that this Commission is already finished,” he said, “that nothing will really happen now: We waited for the German elections, now we wait for the European elections, and then for the new Commission to be nominated.”
“Well, as far as I'm concerned, this Commission's mandate finishes on the 1st of November next year, more than a year from now and we will continue our work,” he went on. “I will continue my work. The planetary boundaries don't care about elections.”
EurActiv understands that these words were partly written with the shale gas package in mind, and Potočnik is expected to expand on them at a speech to the Financial Times in London this evening (21 October).
“Shale gas legislation is something we would like to see proceeding very quickly through the other two institutions,” the official said.
“It is not urgent as no-one is actually extracting it now but we would not want to put it on the backburner because of European elections next year either,” he added.
Shale gas is an 'unconventional' fossil fuel that is found within natural fissures and fractures underground. Until recently, no method of safely transporting it to the surface existed.
It is mined via hydraulic fracturing, or ‘fracking’, the process of breaking apart layers of shale by horizontally pumping liquids and a number of chemical additives under high pressure thereby releasing trapped gas reserves.
To proponents, shale gas represents an untapped and welcome alternative energy source to traditional fossil fuels. To detractors it is a hazardous and highly-polluting fossil fuel.
At the moment the continent depends on gas imported from Russia, and disputes between that country and Ukraine have disrupted winter supplies in recent years.
In the US, shale gas already accounts for 16% of the world's largest economy natural gas production, although analysts disagree about its long term potential.
- Dec. 2013/Jan. 2014: European Commission to unveil results of public consultation on unconventional fossil fuels, including shale gas, and announce regulatory steps.