Joanna Hanson, Independent Academic

October 2012

Shale Gas: Supporting security of supply and climate action in Europe?

Forum Europe organised a conference in Brussels on 3 October 2012 under the above title. The deliberations had a strong EU focus with prominent EU participation following the publication of three related reports for the European Commission, as well as those of the European Parliament’s (EP) Environmental and Industry and Energy Committees. It also looked at a wider range of shale-gas related issues, including its global and geo-political implcations and some discussion around prices. 

Particular time was devoted to the environmental implications of shale-gas exploitation.The discussions highlighted changing positions regarding the environmental and health and safety implications of shale-gas exploitation.

The conference left three predominant impressions regarding shale gas development: 

1. The importance of public engagement

The buy in of the public will perhaps be the most important issue in bringing shale gas into the energy structure, Marie Donnelly, Director for Renewables, Research and Innovation, Energy Efficiency, DG Energy said. The European Commission is aware of the considerable concern about the environmental and health and safety impłications. It may need to reinforce the legislative framework to bring shale gas on stream although it was stressed by another Commission speaker there was no end point at present and no legislation has yet been drawn up.

Stakeholders and the public generally are looking for some authoritate position or statement on the safety of shale gas. It was suggested that the EU may have to play this role, providing a balanced position. It was also said that all EU member states should look actively at what they themselves could do for energy security and not just turn to the EU.

The need for industry to gain public confidence was repeated by various speakers. Carina Vopel, Head of the Strategy Unit, DG Environment, said there were real fears and some risks related to shale-gas exploitation, a more informed debated needed to be held. There were legal uncertainties and inadequacies. 

Shale gas could only develop if it was economically and environmentally viable in Europe. A recently compiled (but still unpublished) Eurobarometer showed that 74% of people polled were concerned about shale being exploited in their surrounding area. Europe needed a framework as a basis for public trust. National frameworks could be good but there was a good case for a European solution; a level playing field. The Commission will carry out an analysis and any political decisions will be based on this analysis. The longer-term perspective of carbon-emission reductions was crucial to this work. This objective was to deliver this work by the end of 2013. 

2. The EU will be looking at reviewing policy and adopting a European stance.

The debate on shale gas was seen as intensifying in the European institutions. Three reports had been issued by the Commission: Unconventional Gas: Potential Energy Market Impacts on the European Union; Climate impact of potential shale gas production in the EU; Support to the identification of potential risks for the environment and human health arising from hyrocarbons operations involving hydraulic fracking in Europe. It was stressed this were research done for the Commission and not its views. 

The EP’s Environmental and Industry and Energy Committees' reports on shale gas would go to plenary vote in November. Industry Committee Member, MEP Niki Tzavela argued that shale gas had to be seen as an opportunty and not a threat, it had to be given a chance. As others she argued that concerns could be mitigated by technology and that the IEA’s Golden Rules should be a practice and reference basis. She conceded that the debate in Brussels was shifting more from the energy security and industry context to the question of climate change implications.

If legislation needs to be reviewed or amended DG Energy thought it would be better to do it sooner than later and thereby, shale gas being supplied in a reasoned and balanced way. It was fully acknowled that shale gas for Europe was good for security of supply but speakers reiterrated recent research that showed it would not replace imported gas. Import dependence would be maintained at a 60% level.

The issuing of the three reports simultaneously should not be seen as a coincidence. The three related Energy, Environment and Climate DGs are consistently in conference regarding these issues. Dialogue also has to take place locally and framed at a local level.

MEP Boguslaw Sonik an EP Environmental Committee member and raporteur said the report his committee has drawn up provided a basis for the protection of peoples’ health and the environment. He believed shale gas extraction was safe and there was no need for a ban. Governments, the industry and local communities must work together to develop the correct standards based on scientific information. The report recommends the Commission drawing up a BREF (Best Available Techniques Reference) for the hydraulic fracking process, assessing whether the current EU legislation suffices and establishing whether fracking should be included in Annex 3 of the Environmental Liability Directive.

3. The global impact of shale gas will impact on the Europe whatever the EU decides.

Shale gas will have an historical impact on the global energy scene larger than when coal was replaced by oil in the 1920s, according to Prof Alan Riley. By 2030 China may have replaced Russia as the world's largest gas producer. Europe is seen as becoming the weakest point in any geostrategy as North Sea gas declines. If Europe fails to engage in shale gas most of the world will have energy supply and security whilst the European continent will be dependent on imports.

The USA is producing oil from shale gas for transport and shipping. It was premised this might effect its wider policies which have security implications for Europe.

Sergei Komlev from Gazprom said that the European shale gas price was a major interest for the company. He arugued that the economic benefits of shale gas have been based on the assumption that shale gas would be cheap, as it was in the USA. Gazprom was very sanguine about the price. The study they had commissioned had not produced such a low-gas production calculation. The real price of shale gas in Europe would be two or three times higher than in the USA. Russian gas prices will be seen as being good and competitive. 

Komlev added that Russia was very supportive on shale gas and was not supporting anti-fracking protests and activities.

Other points

Some participants believed national legislation sufficed and it did not need further supplementation. National rules, e.g. Polish, can be stronger than EU regulation. Others, in particular the industry representatives, argued that the problem was more one of capacity to implement legislation and regulations. This national capacity was often lacking.

Polish representatives were concerned that insufficient attention had been paid to their Polish experience. The Polish Geological Institute’s report on the fracking operation in Lebien at the end of 2011 was a valid scientific study. There was European experience now which was not being looked at. The tendency was to look at the North American information.