Post by Sapphire Capital on Jan 27, 2014 23:55:45 GMT 4
On 22 January 2014, the European Commission has issued a Communication
on the exploration and production of hydrocarbons using high-volume
hydraulic fracturing in the EU (the Communication) and Recommendations
on minimum principles for the exploration and production of such
hydrocarbons (the Recommendations).
1. Background
Both documents have a non-binding effect and follow the European
Parliament and Council resolutions of 2012 and 2013. According to the EU
Treaty, Member States have the right to determine their own energy mix
and to opt out of developing any type of natural resources.
The Communication recognizes that moving ahead towards a low carbon
economy in the current context of rising energy prices, increasing
global competition for natural resources, and instability of security of
supply requires addressing these challenges, especially since the import
dependency of Europe is forecasted to continue growing beyond the 67%
mark reached in 2011. As some regions of Europe are considered to have
substantial reserves of unconventional gas (especially shale gas), some
member states have already been actively pursuing shale gas exploration.
As a result of a public consultation organized by the Commission last
year, the majority of the respondents considered that the Commission
should take additional actions related to the development of shale gas
in Europe. In addition, the European Council of May 2013 called for the
development of indigenous energy resources to reduce Europe’s external
dependency and stimulate economic growth.
According to the Communication, although the EU will not become
self-sufficient in natural gas (as has been the case with the US) in a
best-case scenario, shale gas could contribute almost half of EU’s
total gas production and meet 10% of its gas demand by 2035. In the same
scenario, shale gas would hold approximately 3% of the energy mix in
Europe by 2030, but the direct effect on the European regional gas
market is likely to remain moderate.
So far, there is no experience with commercial production of shale gas
in Europe and only limited experience with exploration.
2. The minimum principles
The scope of the Recommendations is to present minimum principles to
support those Member States who wish to pursue the exploration and
production of hydrocarbons using high-volume hydraulic fracturingi
(commonly referred to as "fracking"). The Recommendations are not
limited to shale gas and apply to all types of hydrocarbons that require
high-volume hydraulic fracturing for extraction and production.
The principles are not binding, but the Commission encourages Member
States to adapt their legislation and implement these principles prior
to any exploration activities.
2.1 Strategic planning environmental impact assessment
prepare a strategic environmental assessment to prevent, manage and
reduce the impacts and risks for human health and for the environment,
following the requirements of Directive 2001/42/EC.
provide the public with the opportunity to participate in developing the
strategy and the impact assessment.
2.2 Exploration and production permits
ensure coordinated conditions and procedures for obtaining the
exploration and production permits.
2.3 Selection of the exploration and production site
set in place measures to assess and ensure that the geological formation
of a site is suitable for fracking.
operators should perform a risk assessment of the effects of fracking on
a potential side, as well as the surrounding surface and the underground
area. The risk assessment should identify all potential exposures,
including any risk of leakage or migration of the drilling fluids,
fracking fluids, naturally occurring materials, hydrocarbons and gases
from the well, target formations, and the seismic risk. The risk
assessment should be based on the best techniques available throughout
the EU.
a site should only be selected if the risk assessment shows that
fracking will not result in a direct discharge of pollutants into
groundwater, and that no damage is caused to other activities around the
installation.
2.4 Baseline study
The operators should determine and present to the national regulatory
authority a baseline study of the installation site, the surrounding
surface area, as well as underground area potentially affected by the
activities. The study should address issues such as: quality and flow of
the surface and ground water, quality of the drinking water, air and
soil conditions, land use and seismicity, biodiversity, status of
infrastructure and buildings, existing wells and abandoned structures.
2.5 Installations design and construction
the installations should be constructed so that surface leakages and
spills to soil, water and air are avoided.
2.6 The infrastructure of a production area
adequate infrastructure requirements are to be set in place before the
production phase.
for the oil wells, the operator should set in place a specific
infrastructure that captures and transports associated natural gas.
2.7 Operational requirements. These obligations should be imposed on the
operators:
develop project-specific water management plans, and ensure the
traceability of the water flows. Water sources under stress should be
avoided.
develop transport management plans to minimise air emissions, and the
impact on local communities and biodiversity.
capture gases for subsequent use and minimise flaring and avoid venting.
Venting of methane and other air pollutants should be limited to the
most exceptional operational circumstances.
perform fracking in a controlled manner with the objective to contain
fractures within the reservoir and to avoid induced seismicity.
ensure well integrity through design, construction and tests. The
results of the test should be reviewed by an independent and qualified
third party.
develop risk management plans.
cease operations and take any necessary remedial actions in case of loss
of well integrity or if pollutants are discharged into groundwater.
immediately report to the competent authority in the event of any
incident or accident affecting public health and the environment.
Member States should promote the responsible use of water resources.
2.8 Use of chemical substances and water
manufacturers, importers and downstream users of chemical substances
used in fracking should refer to hydraulic fracturing when complying
with their obligations under the REACH.
the use of chemical substances is to be kept to a minimum.
treating fluids that emerge at the surface after fracking has to be
considered and addressed as part of the process of selecting the
chemical substances.
2.9 Monitoring requirements
operators should regularly monitor the installation and the surrounding
surface and underground area potentially affected by the operations
during the exploration and production phase and, in particular, all
along the fracking process.
the baseline study should be used as a reference for subsequent
monitoring.
the operator should also monitor: the composition of the fracking fluid
for each well, the volume of water used for fracking and the pressure
applied at each well, the fluids that emerge at the surface, air
emissions of methane and other volatile compounds.
2.10 Environmental liability and financial guarantee
all activities taking place at the installation fall under the regime of
environmental liability (Directive 2004/35/EC).
the operators should provide a financial guarantee covering the permit
provisions and potential liabilities prior to any fracking operations.
2.11 Administrative capacity
the regulatory authorities should have the adequate human, technical and
financial resources to carry out their duties.
prevent any conflict of interest between the regulatory authorities'
duties and those of the Member State in what concerns the development of
natural resources.
2.12 Closure obligations
a survey should be carried out after each installation has been closed
to compare the environmental status both before and after fracking.
2.13 Dissemination of information
the operator should make available to the public information on the
chemical substances and volumes of water that are intended to be used
and the ones that are actually used. The information should list the
name and the Chemical Abstract Service number of all substances
included.
the national regulatory authorities should publish the information on a
publicly accessible internet site within six months of the publication
of the Recommendations.
any incidents, as well as the results of the inspections, should also be
made public by the regulators.
3. What’s next?
The Recommendations have already faced criticism from notable
environmental NGOs on account of their being non-binding.
The Commission invites those Member States that wish to allow
exploration and production of shale gas to effectively apply these
minimum principles in a recommended time frame of six months as of the
publication of the Recommendations, and to send an annual report to the
Commission on the measures set in place. The first reports should be
sent by December 2014.
The Commission will monitor the application of the Recommendations by
the Member States and make available a scoreboard for comparison.
The Commission is expected to review their effectiveness 18 months after
publication, and decide whether it is necessary to put forward
legislation on exploration and production of unconventional
hydrocarbons.
------------------------------------------------------------------------
links removed for security reasons
on the exploration and production of hydrocarbons using high-volume
hydraulic fracturing in the EU (the Communication) and Recommendations
on minimum principles for the exploration and production of such
hydrocarbons (the Recommendations).
1. Background
Both documents have a non-binding effect and follow the European
Parliament and Council resolutions of 2012 and 2013. According to the EU
Treaty, Member States have the right to determine their own energy mix
and to opt out of developing any type of natural resources.
The Communication recognizes that moving ahead towards a low carbon
economy in the current context of rising energy prices, increasing
global competition for natural resources, and instability of security of
supply requires addressing these challenges, especially since the import
dependency of Europe is forecasted to continue growing beyond the 67%
mark reached in 2011. As some regions of Europe are considered to have
substantial reserves of unconventional gas (especially shale gas), some
member states have already been actively pursuing shale gas exploration.
As a result of a public consultation organized by the Commission last
year, the majority of the respondents considered that the Commission
should take additional actions related to the development of shale gas
in Europe. In addition, the European Council of May 2013 called for the
development of indigenous energy resources to reduce Europe’s external
dependency and stimulate economic growth.
According to the Communication, although the EU will not become
self-sufficient in natural gas (as has been the case with the US) in a
best-case scenario, shale gas could contribute almost half of EU’s
total gas production and meet 10% of its gas demand by 2035. In the same
scenario, shale gas would hold approximately 3% of the energy mix in
Europe by 2030, but the direct effect on the European regional gas
market is likely to remain moderate.
So far, there is no experience with commercial production of shale gas
in Europe and only limited experience with exploration.
2. The minimum principles
The scope of the Recommendations is to present minimum principles to
support those Member States who wish to pursue the exploration and
production of hydrocarbons using high-volume hydraulic fracturingi
(commonly referred to as "fracking"). The Recommendations are not
limited to shale gas and apply to all types of hydrocarbons that require
high-volume hydraulic fracturing for extraction and production.
The principles are not binding, but the Commission encourages Member
States to adapt their legislation and implement these principles prior
to any exploration activities.
2.1 Strategic planning environmental impact assessment
prepare a strategic environmental assessment to prevent, manage and
reduce the impacts and risks for human health and for the environment,
following the requirements of Directive 2001/42/EC.
provide the public with the opportunity to participate in developing the
strategy and the impact assessment.
2.2 Exploration and production permits
ensure coordinated conditions and procedures for obtaining the
exploration and production permits.
2.3 Selection of the exploration and production site
set in place measures to assess and ensure that the geological formation
of a site is suitable for fracking.
operators should perform a risk assessment of the effects of fracking on
a potential side, as well as the surrounding surface and the underground
area. The risk assessment should identify all potential exposures,
including any risk of leakage or migration of the drilling fluids,
fracking fluids, naturally occurring materials, hydrocarbons and gases
from the well, target formations, and the seismic risk. The risk
assessment should be based on the best techniques available throughout
the EU.
a site should only be selected if the risk assessment shows that
fracking will not result in a direct discharge of pollutants into
groundwater, and that no damage is caused to other activities around the
installation.
2.4 Baseline study
The operators should determine and present to the national regulatory
authority a baseline study of the installation site, the surrounding
surface area, as well as underground area potentially affected by the
activities. The study should address issues such as: quality and flow of
the surface and ground water, quality of the drinking water, air and
soil conditions, land use and seismicity, biodiversity, status of
infrastructure and buildings, existing wells and abandoned structures.
2.5 Installations design and construction
the installations should be constructed so that surface leakages and
spills to soil, water and air are avoided.
2.6 The infrastructure of a production area
adequate infrastructure requirements are to be set in place before the
production phase.
for the oil wells, the operator should set in place a specific
infrastructure that captures and transports associated natural gas.
2.7 Operational requirements. These obligations should be imposed on the
operators:
develop project-specific water management plans, and ensure the
traceability of the water flows. Water sources under stress should be
avoided.
develop transport management plans to minimise air emissions, and the
impact on local communities and biodiversity.
capture gases for subsequent use and minimise flaring and avoid venting.
Venting of methane and other air pollutants should be limited to the
most exceptional operational circumstances.
perform fracking in a controlled manner with the objective to contain
fractures within the reservoir and to avoid induced seismicity.
ensure well integrity through design, construction and tests. The
results of the test should be reviewed by an independent and qualified
third party.
develop risk management plans.
cease operations and take any necessary remedial actions in case of loss
of well integrity or if pollutants are discharged into groundwater.
immediately report to the competent authority in the event of any
incident or accident affecting public health and the environment.
Member States should promote the responsible use of water resources.
2.8 Use of chemical substances and water
manufacturers, importers and downstream users of chemical substances
used in fracking should refer to hydraulic fracturing when complying
with their obligations under the REACH.
the use of chemical substances is to be kept to a minimum.
treating fluids that emerge at the surface after fracking has to be
considered and addressed as part of the process of selecting the
chemical substances.
2.9 Monitoring requirements
operators should regularly monitor the installation and the surrounding
surface and underground area potentially affected by the operations
during the exploration and production phase and, in particular, all
along the fracking process.
the baseline study should be used as a reference for subsequent
monitoring.
the operator should also monitor: the composition of the fracking fluid
for each well, the volume of water used for fracking and the pressure
applied at each well, the fluids that emerge at the surface, air
emissions of methane and other volatile compounds.
2.10 Environmental liability and financial guarantee
all activities taking place at the installation fall under the regime of
environmental liability (Directive 2004/35/EC).
the operators should provide a financial guarantee covering the permit
provisions and potential liabilities prior to any fracking operations.
2.11 Administrative capacity
the regulatory authorities should have the adequate human, technical and
financial resources to carry out their duties.
prevent any conflict of interest between the regulatory authorities'
duties and those of the Member State in what concerns the development of
natural resources.
2.12 Closure obligations
a survey should be carried out after each installation has been closed
to compare the environmental status both before and after fracking.
2.13 Dissemination of information
the operator should make available to the public information on the
chemical substances and volumes of water that are intended to be used
and the ones that are actually used. The information should list the
name and the Chemical Abstract Service number of all substances
included.
the national regulatory authorities should publish the information on a
publicly accessible internet site within six months of the publication
of the Recommendations.
any incidents, as well as the results of the inspections, should also be
made public by the regulators.
3. What’s next?
The Recommendations have already faced criticism from notable
environmental NGOs on account of their being non-binding.
The Commission invites those Member States that wish to allow
exploration and production of shale gas to effectively apply these
minimum principles in a recommended time frame of six months as of the
publication of the Recommendations, and to send an annual report to the
Commission on the measures set in place. The first reports should be
sent by December 2014.
The Commission will monitor the application of the Recommendations by
the Member States and make available a scoreboard for comparison.
The Commission is expected to review their effectiveness 18 months after
publication, and decide whether it is necessary to put forward
legislation on exploration and production of unconventional
hydrocarbons.
------------------------------------------------------------------------
links removed for security reasons