Questions and answers on the shale gas initiative
Brussels -- Why is there a need for EU action on hydrocarbons using high-volume hydraulic fracturing (e.g shale gas)?
In Europe, geological estimates show hydrocarbons resources such as shale gas spread across the borders of Member States. Environmental impacts and risks do not respect national borders: impacts in one country can give rise to, or worsen, pollution problems in other countries. This is in particular true for surface waters and groundwater, air quality, and emissions to air. Action at EU level is therefore valuable.
The initiative is also a response to the calls for action from the majority of respondents who took part in the Commission's public consultation on this subject, as well as from the European Parliament and a number of national and local authorities.
Shale gas exploration activities are underway or foreseen in several Member States, and these have been greeted with a mixture of hopes and concerns. Indeed shale gas extraction requires the use of a complex combination of technologies (horizontal drilling and high-volume hydraulic fracturing, potentially using hazardous chemicals) on a large scale, which is new in Europe.
Production could start as early as 2015 in Member States were trials are most advanced. By establishing minimum principles at EU level now, the Commission aims to build public and investor confidence, helping to ensure that developments take place in a safe and secure manner.
Why does the Commission initiative focus on hydrocarbons using high-volume hydraulic fracturing (e.g shale gas)?
In the EU there is today limited experience of high-volume hydraulic fracturing, which takes place at a scale, frequency and intensity that differs from past EU experiences. EU experience so far is mainly of low-volume hydraulic fracturing in conventional and tight gas reservoirs, mostly in vertical wells, and it represents only a small part of past EU oil and gas operations.
The exploration phase of activities involving high-volume hydraulic fracturing has raised significant public concern in the EU. This has resulted in bans or moratoria in certain Member States, and public opposition in others.
On the other hand, shale gas activities also have the potential to bring direct or indirect economic benefits to EU Member States, regions and local communities who wish to explore or exploit such resources, as well as enterprises and citizens, for instance through regional investments in infrastructure, direct and indirect employment opportunities, and public income via taxes, fees and royalties.
This is why the Commission decided to focus on the opportunities and challenges of such practice.
Key measures identified to address impacts and risks may also be relevant for other types of unconventional fossil fuels that do not use this technique. The Commission will follow project developments in the EU and take further action if needed.
What are the main components of the shale gas initiative?
The initiative includes three components:
- A Communication outlining opportunities and challenges stemming from shale gas extraction in Europe. It focuses on potential benefits in terms of energy security, competitiveness and public revenues, and environmental challenges in areas such as water, air pollution and land take.
- A Recommendation setting minimum core principles for the exploration and production of hydrocarbons using high-volume hydraulic fracturing. The Recommendation is intended to complement EU existing legislation, covering issues such as strategic environmental assessments and planning, underground risk assessment, well integrity, baseline reporting and operational monitoring, capture of methane emissions, and disclosure of chemicals used in each well.
- An Impact Assessment that examines the socio-economic and environmental impacts of a range of policy options including a Recommendation, amendments of existing EU legislation, and stand-alone legal instruments.
Why is the Commission proposing a Recommendation and not binding measures?
The Commission was requested to act urgently. A Recommendation to Member States has the advantage of being applied faster, while providing a reference for action at national level. The Commission will closely monitor the application of the recommendation, comparing the situation in different Member States on a publicly available scoreboard.
Who will benefit from the package, and how?
If fully applied, the Recommendation will contribute to achieving the following benefits:
- Citizens will benefit from reduced environmental impacts and risks, especially of water contamination and air emissions. Robust and transparent rules would also help alleviate public concerns by enhancing transparency and consultation. The Recommendation defines the benchmark that will be applied to European shale gas projects, in addition to the existing EU legislation. This will help citizens and NGOs to scrutinise the projects and ask the right questions.
- Member States that develop these resources will have a set of core principles, as a reference for action at national level.
- Industry will benefit because the proposed minimum principles will ensure a level playing field and provide a stable framework for investments. This can also lead to more innovation and enhance public acceptance.
On what basis was the initiative prepared?
The Commission commissioned external studies (see: http://ec.europa.eu/environment/integration/energy/uff_studies_en.htm) and used as well reports from academia, international organisations and studies conducted by Member States to underpin the analysis presented in the impact assessment and supporting this initiative.
A public internet consultation, gathering some 23 000 responses1, was carried out by the Commission from 20 December 2012 to 23 March 2013 on the main perceived benefits and risks of unconventional fossil fuels (e.g shale gas) development in Europe. The majority of respondents called for additional EU action. In addition, a Flash Euro-barometer survey was conducted in September 20122 on the basis of interviews with over 25 000 European citizens in 27 EU Member States.
The Commission also took into account documents developed by other EU institutions. The European Parliament adopted two resolutions in November 2012 respectively on environmental impacts3 as well as on industrial, energy and other aspects of shale gas and shale oil4. In October 2013, the Committee of the Regions issued an opinion5 providing the perspective of local and regional authorities on unconventional hydrocarbons. In May 2013 the European Council adopted conclusions on indigenous energy sources.6
What is the current state of play regarding shale gas exploration in Europe?
In the EU, a number of Member States are in the process of granting or have granted concessions and/or prospection/exploration licences over the past three years: Denmark, Germany, Hungary, Netherlands, Poland, Portugal, Romania, Spain, Sweden and the United Kingdom7. However, not all license holders have started concrete prospection or exploration activities. Currently, such activities (at prospection or exploration stages) have taken place or are ongoing in Denmark, Germany, Poland, Romania, Sweden and the UK. As yet, there is no commercial production of shale gas in Europe, although a few pilot production tests have already been conducted, for instance in Poland. Production could start in 2015-17 in certain Member States (e.g. Poland, UK).
Is the initiative consistent with long term EU commitments towards decarbonisation?
Natural gas from unconventional formations such as shale gas may help in the transition towards a low-carbon economy provided its air emissions, including greenhouse gas emissions, are adequately mitigated. This implies that gases are captured, flaring is minimised and venting is avoided, as recommended by the Commission today. It should also be ensured that it effectively takes the place of more carbon-intensive fossil fuels and does not replace renewable energy sources. To reach our long term decarbonisation targets, reinforced energy efficiency efforts and continued investments in renewables are essential.
What will happen next?
Member States are invited to give effect to the minimum principles set out in the Recommendation no later than six months after the date of publication in the Official Journal and to annually inform the Commission about measures taken.
A publicly available scoreboard will be developed by the Commission to follow the application of the Recommendation in Member States wishing to explore or exploit hydrocarbons using high volume hydraulic fracturing.
The review will include an assessment of the Recommendation's application, will consider the progress of the best available techniques information exchange and the application of the relevant Best Available Techniques (BAT) reference documents, as well as any need for updating the Recommendation's provisions. The Commission will decide whether it is necessary to put forward legislative proposals with legally-binding provisions on the exploration and production of hydrocarbons using high volume hydraulic fracturing.