Out-Law News 2 min. read

European Commission recommends minimum environmental standards for shale gas fracking operations

EU member states that are considering 'fracking' for shale gas as part of their national energy mix have been encouraged to plan ahead, monitor local environmental conditions and keep the public informed during the course of any works by the European Commission.

The Commission's new 'minimum principles' for fracking projects, published as part of its 2030 energy and climate change policy framework, are designed to ensure harmonised environmental standards for such projects across the EU. The principles form a set of recommendations rather than mandatory standards; however, member states will be required to notify the Commission about compliance measures annually. Compliance information will be made public in the form of a 'scoreboard', the Commission said.

"Shale gas is raising hopes in some parts of Europe, but is also a source of public concern," said Environment Commissioner Janez Potočnik. "The Commission is responding to calls for action with minimum principles that member states are invited to follow in order to address environmental and health concerns and give operators and investors the predictability they need."

Member states should begin applying the principles within six months, and begin providing annual progress reports to the Commission from December 2014. The Commission intends to review the effectiveness of this self-regulated approach in 18 months time, and may consider legally binding provisions if necessary, it said.

Shale gas is natural gas trapped within shale formations at significant depths below ground. It has become an increasingly important source of natural gas in the US, particularly over the past decade, where a combination of drilling and 'fracking' has facilitated access to large volumes of shale gas that were previously uneconomical to exploit. Geological estimates in the EU have found possible reserves of shale and other hydrocarbons across the borders of member states, and exploration activities are currently underway or foreseen in several EU countries including the UK, Germany, Poland and the Scandinavian countries.

Fracking involves pumping water, sand and chemicals at high pressure into shale rock to create narrow fractures, through which trapped gas can flow out and be captured. Opponents have claimed that the process, which uses considerable volumes of water, can contaminate ground water and cause earthquakes. In addition, as most EU environmental legislation precedes the drive towards fracking at high volumes, certain environmental aspects of the process are not comprehensively addressed in current EU legislation, according to the Commission.

The new principles are intended to complement existing EU legislation on planning, environmental, risk assessment and monitoring; and cover the position that member states should adopt before and during shale gas exploration and fracking projects. Regulators should plan ahead of developments and evaluate the possible cumulative effects of different projects before granting and licenses, as well as carefully assessing environmental impacts and risks. They should also take steps to ensure that operators apply industry best practices throughout the project.

Before any operations begin, member states should ensure that the quality of the local water, air and soil is recorded so that changes and emerging risks can be identified and dealt with. Air emissions produced by projects, including greenhouse gas emissions, should be captured and controlled, and members of the public informed about the chemicals that are being used in individual wells. The recommendations also explicitly state that the integrity of the well itself should be up to best practice standards.

Energy and environmental law expert Jennifer Ballantyne of Pinsent Masons, the law firm behind Out-Law.com, said that the recommendations showed the value of "robust and clear regulation" for the burgeoning shale gas industry. However, she said that the balance "has to be struck between strong legislation and legislation which impedes development and discourages investment in the sector".

"With strong, but fair, legislation, shale gas developers can proceed under the scrutiny that a nervous public demands," she said. "This will give comfort that, before any shale gas development can proceed, all of the relevant public concerns will have been considered when deciding whether or not to permit shale gas development and sufficient controls will be in place to ensure any such development is properly managed."

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