Shale Gas in the EU: It’s Up to You

EU member states can pursue shale gas, but must follow environmental rules

Natural gas makes up a pretty significant slice of the pie for the 27 member states of the European Union.

That was apparent in the presentation of Michael Schuetz, Policy Officer for Indigenous Fossil Fuels at the European Commission’s Directorate of General Energy at Shale Gas Results in Europe 2011 in Warsaw, Poland.

Specifically, in one of his first slides gas made up nearly one-fourth of gross inland consumption in the EU in 2008; and it comprised 24% of electricity generation in the same year.

Then, Mr. Schuetz showed the projected import dependency of Europe which looks to be on the increase until 2030, when oil dependency could reach over 94% and gas dependency nearly 83%.

His presentation harkened back to the January 2009 gas crisis, when a significant proportion of countries in Central & Eastern Europe went without over 75% of their gas supply for two weeks.

Within that context, Schuetz spoke about Unconventional Gas and EU Energy Policy, pledging to outline the European Commission’s Energy Policy Priorities.

“The Commission is working to improve access to gas market networks,” he mentioned. “This is not specifically for shale gas, but would also benefit shale gas producers.”

Schuetz reported that last November the European Commission had published an EU Energy Infrastructure Package communicating energy infrastructure priorities for 2020 and beyond; it also identified challenges for each sectors like carbon capture storage, he said, adding that it would be followed by a legislative proposal.

He listed the main European Infrastructures Priorities for Gas and Oil by 2020, including the Southern Gas Corridor (Nabucco).

He said: “The heads of state and government of the EU support the transition to low carbon energy system by 2050. A low carbon economy roadmap was published in March. What the Commission cannot or will not do is set policy; we can evaluate pros and cons for each of them.”

Schuetz explained why the EC could not strictly dictate to EU members how they met their energy demand. “In the Treaty of Lisbon member states have the right to determine exploitation of energy resources and energy mix. For example, nuclear is forbidden in Austria and coal is predominant in Poland. We have completely different baselines in different countries. To pursue shale gas is the right of the member state, but it must follow environmental regulations.”

Normally, he said, legislation on an EU level took the form of directives, which were directed at the member state (not businesses). “They must implement certain objectives and rules. The means of reaching those objectives are up to member states.”

For shale gas, Schuetz said the Water Framework Directive would be important. “Member states must reverse any induced pollution trend.”

“What is the legal framework for shale gas?” was a question raised.

“We believe we have an effective framework that covers all hydrocarbons,” explained Schuetz. “The Directive sets a level playing field; on the environmental side, there’s the Water Framework Directive, the Groundwater Directive, and Environmental Impact Assessment.”

He also gave mention to Reach (which regulates chemicals), and Natura 2000, which protects wildlife areas as well as other regulations on waste, noise, etc.

Member states have to ensure appropriate licensing and permitting regimes, he said.

“What do we do concretely?” Schuetz asked. “We have a mandate: shale gas and oil shale should be assessed (declared in February of this year). We are looking at the economic recoverable potential, and following ongoing projects. Exploration activities in the EU have just started.”

“There is lots of research going on, lots of papers being published, and presentations being given on the future economic impact of shale gas,” observed Schuetz.

Regarding the environmental impact, he said: “The best example is the US, as it’s the only country with commercial shale gas production, so it’s the place to evaluate the impact.”

He reported that the Directorate General had also just launched a legal study to evaluate the appropriateness of the EU legal framework, including environmental issues. Results would be available in October 2011.

“We don’t know what the economic viable potential will be,” said Mr. Schuetz of shale gas. “Let’s see. Nevertheless, other security of supply issues remain: the need to develop infrastructure, and interconnections to distribute shale gas in Poland.”

Regarding environmental issues, he said EU citizens would ask them and that answers should be provided. “They have to be credible and based on science. Regarding the disclosure of chemicals, it’s not enough to say ‘we have no problems.’”

Schuetz questioned where the shale gas boom fit into the EU’s Energy Roadmap 2050, saying, “Complete decarbonization is not possible with shale gas because it’s a fossil fuel.”

He said innovative companies were crucial for the industry’s development: “They must take the risk for a possible return in the future. We need them to develop more economic and more environmental friendly technologies and methods of better involving local communities and convincing them how it can help them.”