Spanish Ministry Supports Fracking Despite Opposition from Autonomous Communities
Spain´s Minister of Industry, Tourism and Trade, José Manuel Soria, recently declared that a local exploitation of shale gas would make the country more independent from foreign energy sources and would save millions of Euros in the long term. Thus, “every possibility of exploring whether there is oil or shale gas in its soil is welcome, while respecting environmental legislation,” said Soria. However, several autonomous communities, environmental and civic organizations opposed a national energy strategy based on fossil fuels.
The Spanish Ministry of Industry, Tourism and Trade released the last July an action plan to reinforce the Spanish industry after the crisis. The 3rd point to implement was meant to promote "the exploration and exploitation of non conventional natural gas and other energy sources.” In this sense, the Spanish government is clearly calling for help, asking the energy sector to make a positive contribution to Spain's economy. The measure does also aim at “ensuring a stable, competitive and sustainable energy supply within the European Union.”
The amended Article 9 of the 1998 Spanish Hydrocarbons Law, modified in October 2013, notes that “all kind of geophysical and geochemical methods of prospection, perforation, among them the hydraulic fracturing can be applied.” This article opens the doors to national and international companies, setting a laxer legal framework in comparison to other neighbouring European countries.
Currently, the authorities have issued 70 licenses to explore different zones, a total of 57 licenses are being examined for approval and 23 licenses were issued for hydrocarbons exploitation, according to the 2014 List of Concessions for Exploration and Operation, edited by Spain´s Ministry of Industry, Energy and Tourism.
The total number of licenses and requests increased significantly since 2010, when only 52 licenses were issued, 42 requested and a total of 10 under operation.
COMPANY PROFILES
Explorations are mainly focused on shale gas and oil. This is the case of the Canadian BNK Petroleum Inc. with its two subsidiaries in Spain, BNK España Trofagas S.L.U. and BNK SEDANO HIDROCARBUROS S.L.U., which have licenses to explore in Burgos and Álava.
Montero Energy Corporation S.L. owned by the also Canadian R2 Energy, explore northern Spain and wait for further licenses.
Another Canadian owned company Pyrinees Energy Corporation (PEC), based in Vancouver, declared on its web site to be focused on “exploration and development of hydrocarbon projects in Spain.” It owns the 100% of the Centenera Gas Project in Huesca and shares together with Gas Natural and Repsol the project in Bezana and Bigüezo.
The Scottish Cairn Energy through Capricorn Spain Ltd. has obtained licenses to explore the northern Spanish seabed and have applied for another 12 explorations.
Other companies that are exploring Spanish subsoil are UK-based Greenpark Energy, owned by Dart Energy Limited, and Compañía Petrolífera del Sedano S.L. subsidiary of Leni Gas & Oil, whose headquarter is in London.
Also the Dallas based, Schuepbach Energy and Frontera Energy Corporation S.L. owned by the American San Leon Energy, have already interests on the country.
National companies like Repsol Investigaciones Petrolíferas S.A. (RIPSA), Repsol´s subsidiary, are equally going to explore southern Spain and Canary Islands. The Spanish Gas Natural Fenosa, through its affiliate Petroleum Oil and Gas España S.A. have applied for licenses to explore new areas. Similarly, SHESA, Hidrocarburos de Euskadi, applied for licences. SHESA is a public owned company from the autonomous community of Basque Country, which counts on its regional government approval for the exploration.
ANTI FRACKING LAWS
Several Spanish autonomous communities affected by imminent explorations oppose fracking, together with civic organizations. The Spanish national Hydrocarbons Law (Law 34/1998), states that authorization on hydraulic fracturing corresponds to the autonomous communities. The Spanish Constitutional Court has declared the two anti Fracking Laws passed by the regional parliaments of Cantabria and La Rioja unconstitutional. The central government argued that it corresponds to the General Administration to issue permits on Hydrocarbons exploration when affecting more than one autonomous community or the seabed. Despite the Constitutional Court abolished the laws, its judgment stated that a generic prohibition is impossible, but one can establish protection on determinate areas.
SO WHAT?
The main exploitation areas of shale gas in Spain are in the northern autonomous communities of Cantabria, Basque Country and Castilla y León, according to Shale Gas España, the Spanish platform for exploration and development of shale gas in Spain.
The exploration process might be more difficult in regions clearly standing out against hydraulic fracturing developments.
Nowadays, Spain imports the 74% of the energy required, which costed 62.000.000 million Euros in 2013.
Olalla Tuñas Martínez