EU Has Adequate Rules on Shale Gas Exploration, Study Shows

The European Union has adequate legislation to protect the environment as companies including Chevron (CVX) Corp. explore for shale gas in several member states, a study commissioned by the EU regulatory arm showed.

“The legal study confirms that there is no immediate need for changing our EU legislation,” EU Energy Commissioner Guenther Oettinger said in a statement published today. “This refers to the actual phase of exploration. We take environmental concerns seriously and will continue to monitor the development of shale gas extraction in the EU.”

As companies such as Chevron and Exxon Mobil Corp. started drilling exploration wells in countries including Poland, the U.K and Germany, environmental groups raised concerns that hydraulic fracturing, the process of blasting sand, water and chemicals into shale that’s made the U.S. the world’s largest natural-gas producer, risks earthquakes and polluting water supply.

“From our point of view an adequate regulatory framework for early exploration (seismic/test drilling) activities exists taking into account all scrutinized laws and regulations,” according to the study by Belgian-Luxembourg law firm Philippe & Partners, published on the EU website.

Most of the relevant EU regulations include flexible mechanisms, allowing the bloc’s nations to adjust their legislation, to regional or local specifics of shale gas exploration and potentially exploitation, it said.

300 Years

Poland, which is seeking to reduce its reliance on natural gas from Russia, may hold enough fuel trapped in shale to meet its needs for 300 years, the U.S. Department of Energy said in April. Almost 20 companies, including the nation’s dominant gas company Polskie Gornictwo Naftowe i Gazownictwo SA and top refiner PKN Orlen SA, have more than 100 licenses to explore for shale gas in the country, considered Europe’s best prospect for so-called unconventional gas.

Polish shale gas may be as much as 50 percent cheaper than the Russian gas that the country now receives from the Yamal pipeline, paying more than $500 per 1,000 cubic meters, Treasury Minister Mikolaj Budzanowski said on Jan. 19.

While there are no significant gaps in the EU law framework when it comes to current shale gas activities, there’s “no reason for complacency,” according to the study.

Polluting Water Supply

A central issue in the debate over the environmental aspect of shale drilling is whether it risks polluting water supply. While France banned fracking because of the risk of contamination last year and Bulgaria followed suit earlier this month, a U.K. parliamentary committee report in May found no evidence shale drilling threatens underground water supplies.

In the U.S., the Environmental Protection Agency expects to complete a report into shale and drinking water in 2014. Last year the Oklahoma Geological Survey said a study of time and geology showed a possibility that fracking a well near Elmore City on Jan. 17 had caused a series of 43 minor tremors over a period of 24 hours.

Last year exploration was suspended in the German state of North Rhine-Westphalia as well as in northwest England, where fracturing gas wells caused two tremors.

Member states could step up efforts to consult the public on shale gas activities at their early stages, according to the study commissioned by the EU.

Public Participation

“At the moment where the project is still small scale and thus easy ‘reversible,’ consultation of the concerned public is not necessarily foreseen and hence has no say in the decision to allow/refuse its start,” Philippe & Partners said in the study. “It is exactly at this stage that public participation is required the most.”

While drilling to explore for shale gas continues in Europe, its extraction potential is still uncertain. Exxon Mobil Corp., the world’s biggest oil company, said in November that the region was in the “infancy” of shale gas development and urged optimists to temper expectations.

Exploration and exploitation of shale gas requires regulation in the field of environment, chemicals, civil law, worker’s health and safety, resulting in a very diversified law framework that involves different authorities, according to the study by Philippe & Partners.

“In order to lower the burden on the operators and the involved authorities as well as to ensure a coherent procedure, the core authorization and permitting procedures on the one hand and the environmental procedures and other permitting procedures on the other hand could be more integrated, as is already the case in Germany and Sweden,” the law firm said.

To contact the reporters on this story: Ewa Krukowska in Brussels at ekrukowska@bloomberg.net;

To contact the editors responsible for this story: Stephen Voss at sev@bloomberg.net;

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.