CommentVisions Dec. 2013EN

Organization: CommentVisions

Format: Online European Discussion

ROEC expert: Eugenia Gusilov

Date: December 15, 2013

Our think tank was invited to contribute to the following discussion topic:

How can Europe and the world learn from the development of shale gas in the US?

hosted by CommentVisions – a joint project of Euronews and European Voice, in association with Shell

This is the point of view that ROEC has contributed to this debate:

The economic and energy security arguments in favor of shale gas are compelling, however the European public remains largely skeptical and unconvinced that shale gas benefits outweigh environmental and health risks. Despite this, I think Europe and the world are in a privileged position because they can build on the experience of the pioneers (United States and Canada) and they can use the weaknesses pointed out by the American practice to strengthen their own regulatory frameworks and put in place targeted preemptive measures (mandatory baseline water testing, mandatory green completions and mandatory EIAs). The US experience with shale gas teaches Europe that a liberal regulation is not the way to go because lax regulation leads to a higher likelihood of accidents. Strong regulation and strict enforcement are required from the very beginning and, thanks to the American experience the areas of vulnerability are known. This is not to say that Europe should kill the fledgling shale gas industry with overregulation, but it should pay close attention and not shy away from stepping in to fill the legislative gaps or correct inadequacies.

The EU institutions are under pressure on this topic and the Commission is expected to present its views on shale gas regulation this December. The current review can result in three scenarios: a Directive for unconventional resources; an upgrade of existing legislation; or maintenance of the status quo. In my opinion, the first outcome would be most desirable, the second – most probable, while the last – unlikely. If the Commission decides in favor of a shale gas regulation package, it should come with a tough system of penalties and fines in case of accidents, high enough to dissuade operators from cutting corners and ensure sufficient funds to clean up any possible environmental accidents. This will send a strong signal to the public that unconventional resources across Europe will not be exploited at the expense of public health and environment. In my opinion, mandatory EU wide rules would be much more effective than voluntary compliance with industry standards no matter how high these are.

On the topic of BAT, I would add that, to date, public debate has neglected almost entirely a key topic – that of the latest technological breakthroughs. The next generation technologies are not a matter of distant future, but are already on the market and can simultaneously deliver economic and environmental benefits and should be actively promoted. Unfortunately, this is not happening. One such technology is propane-based fracturing or fracturing with liquid petroleum gas (LPG) which does not require the use of water. Not only that it bypasses the problem of water altogether (thus having the potential to dismantle one of the biggest public fears related to shale gas projects – that of groundwater contamination), but it also seems to result in increased well productivity. It also has the advantage of not mobilizing naturally occurring radioactive material (NORM) that can sometimes be present underground, which sounds like a true win-win solution for both industry and public. Herein lies a truly golden opportunity for Europe to emerge as a champion of these latest technologies and take on a role which would fit perfectly with and consolidate its leadership in climate change and environment matters. The solution is not to shut the door to European shale gas, but pursue it with newer and better technologies. Of course, you cannot force companies to go with one technology or another, but governments, national authorities and European institutions have tools at their disposal (fiscal and administrative incentives, energy policies and regulation) to steer the private sector towards these technologies, encourage their use and reward their faster uptake.