The European Commission has just released its study on the legal framework for shale gas in Europe.

The study looked at experiences in four Member States, Poland, France, Sweden and Germany. These countries were chosen because France, Poland and Germany have the highest number of licences granted for exploring shale gas, and Sweden saw the first shale gas exploration in the EU. In addition, these Member States have different legislative/administrative backgrounds.

Various public authorities were interviewed, as well as ExxonMobil (Germany), Total Gas Shale Europe (France), Talisman Energy (Poland) and Gripen Gas AB (Sweden).

The study, carried out by Brussels law firm Philippe & Partners, concludes that there is already an adequate regulatory framework in Europe for shale gas activities as they currently stand. Existing EU and national laws cover, for example, authorisations for exploration/production through the Hydrocarbons Directive, water protection by the Water Framework Directive and the Mining Waste Directive, and the use of chemicals by REACH.  The requirement for an Environmental Impact Assessment as well as public access to environmental information is covered by general legislation (the Environmental Impact Assessment Directive and European legislation implementing the Aarhus Convention).

This legislative framework is complex (inevitable due to the wide range of different aspects of shale gas activities, from mining/hydrocarbons, workers’ safety and security, use of chemicals and environmental), however that does not necessarily lead to inefficiency or impracticability.

The report confirms that, taking all this into account, no significant gaps have been noticed in the current legislative framework, either at EU or national level, when it comes to regulating the current level of shale gas activities. In particular, it notes that the procedures that need to be followed to authorise shale gas activities are the general procedures every operator has to follow in order to be able to explore/exploit conventional and unconventional hydrocarbons. In relation to use of chemicals, the report comments that REACH applies to the use of chemical substances in any industrial process, including hydraulic fracturing.

There is recognition that this may need to be reviewed as a shale gas project develops into a larger scale operation, and that there is no reason for complacency. Some adjustments may be necessary, for example to ensure public consultation at an early stage, and to look at thresholds for environmental impact assessments.

There is also a concern that a diversified regulatory framework requiring the involvement of different authorities can impose quite a burden on operators as well as the authorities. There could be benefit to making the procedures more integrated and coherent, and there are suggestions in the report as to how this could be achieved.

So, the overall conclusion of this report is that a new directive dedicated to shale gas is not immediately required. It largely supports what DG Energy has said from the outset, namely that it will not propose specific shale gas legislation until commercial production begins, which will probably not be before 2015.

Operators and service companies should be encouraged that a practical and positive approach has been taken, which could provide a sound basis for moving forward.  At the same time, environmentalists can take comfort from the fact that  environmental concerns have been acknowledged in the context of consideration of the adequacy of current regulation.

The study will undoubtedly be taken seriously in Brussels, as the European Commission is the initiator of regulation. However, further reports on shale gas at EU level are expected this year, one by the Environment, Public Health and Food Safety (ENVI) Committee, the other by the Industry, Research and Energy (ITRE) Committee, which will not feel bound by the conclusions of this most recent study.  This is therefore unlikely to be the end of the shale gas story ...

Report: Unconventional Gas in Europe