Fracking: the State of Affairs in
Other Countries
Overview of the situation of fracking in different countries, regarding resistances, moratoria and withdrawls
The North American "Miracle"
and Expectations in Other Countries
“The
only danger with fracking is not following in the footsteps of the
US." That was the emphatic reply of Spanish Minister of
Industry, Energy, and Tourism José Manuel Soria when asked to
comment on the issue. Mr. Soria was referring to the much-lauded
miracle of shale gas which has taken place in the United States over
the last decade, which has even led President Obama to claim last
year that the country has enough natural gas to cover consumption for
the next 100 years. The latest forecasts by the US Energy Information
Administration (part of the US Department of Energy), published in
early June of 20131,
claim that there, shale gas has reached 40% of total natural gas
production and shale oil 30% of total petroleum production. The rise
of shale oil will allow the United States to outperform Saudi Arabia
in petroleum production by 2020 and turn from net importer to net
exporter of crude oil by 20302.
It's
important to remember, however, that the EIA, which has now raised
its projections for natural gas by 10% compared to its earlier
forecasts in 2011, has a long history of unfounded optimism and
overestimating reserves, which it then afterward has had to correct.
The report itself, which ventures to estimate the most recent data
for shale oil and gas in 41 countries, admits the uncertainty of
these predictions, which describe reserves that could be technically
recoverable but not economically worthwhile. Other reports by
economic analysts have reported that American reserves are
overestimated by 400-500%3.
According to the EIA report, the North American region (USA, Canada,
and Mexico) has by far the biggest shale gas reserves (1685 tcf4),
followed by China (1.115), Argentina (802), Algeria (707), Australia
(437) and Russia (287). Europe, on the other hand, has noticeably
smaller reserves (470 tcf), most notably in Poland (148), France
(137) and Romania (51). Landing far behind other countries like the
United Kingdom (26 tcf), Sweden (10 tcf), the Netherlands (26),
Germany (17), Denmark (32) and Bulgaria (17). Spain, according to the
report, would have approximately 8 tcf - eight times less than the
phantom quantities estimated by Spanish companies in the sector, that
had talked of how Spain could be the North Dakota of natural gas5-
But in practice, fracking has not been
as glorious as Mr. Soria would have us believe. The boom in the USA
has transformed its energy situation, but it has also started to
produce real, tangible proof of the real impact of hydraulic
fracturing, the technique used to extract these unconventional fuels
(pollution, damage to human health, earthquakes….) Strong social
opposition and environmental scandals have raised the alarm in other
parts of the world, where the promise of this Energy Eldorado is
expected soon expected to arrive. American resistance to the practice
has reached the world of culture, made visible by "Artists
Against Fracking," headed by well-known figures such as Yoko
Ono. “Gasland,” an Oscar-nominated film by American director Josh
Fox (whose recent sequel, Gasland II, premiered in 2013) has been
noticeably effective in making the controversy known internationally.
In the US, many communities have passed resolutions against hydraulic
fracturing and the State of Vermont has ruled to ban it in May 2012,
while the State of New York has a moratorium in place until 2015.
Canada,
the other country that extracts shale gas commercially in large
quantities, has also seen the province of Quebec stablishing a
prohibition, and the government of Nova Scotia support a de facto
moratorium until mid-20146.
Meanwhile, free trade agreement negotiations between these two North
American countries and the European Union attempt to prevent such a
situation in the future and circumvent the introduction of possible
bans Europe, giving energy companies legal rights to oppose such
measures.7.
As a matter of fact, the Quebec ban is currently being challenged by
the American company Lone Pine through the NAFTA agreement8.
Some Common Traits of the
Resistance
The
response movement has characterized in general by a unanimous
opposition to the technology and the understanding that prohibition
is the only possible answer, and not regulation, no matter how
adequate. Criticism of the lack of transparency in public debate have
also been a recurring element. Those in industry are well aware of
this, and know that although the practice took off rapidly in the US,
helped along by economic and environmental subsidies such as the
“Halliburton exception,” which exempted the natural gas industry
from potable water laws, its development elsewhere, such as in Europe
where it is trying to establish massive production, depends on
garnering public acceptance and requires much more stringent
regulation. An industry-commissioned report9
aimed to figure out how the anti-fracking movement is organized and
operates described it as “a highly effective campaign” and blamed
it for a large portion of the moratoria
and bans established in different parts of the world. The report
notes that industry has underestimated the social and political risks
and that this battle must be won before trying for wider
implementation. Similarly, a recent NATO report identifies organized
resistance as one of the key factors that will complicate mass
utilization of shale gas in Europe. 10
The
sheer effectiveness of the opposition movement is evidenced by the
fact that in various parts of the world, such as the United States11
or Poland12
anti-fracking groups are being criminalized, and made the objects of
surveillance and espionage. In Poland, as well as in other countries
of the former Soviet bloc such as Bulgaria, Romania, Lithuania, or
Hungary, the nationalist argument for a future without dependence on
Russian gas is being used heavily in public debate to garner social
approval. Although curiously enough this modesty disappears when
promising business that the prices of gas will not go down thanks to
long-term contracts with Gazprom13.
The Improbable European Response
Apart
from the visibly smaller reserves and anticipated public opposition,
there are various factors that make similar development in Europe
improbable. Geological, geographic, and hydrological differences,
together with a lack of adequate infrastructure and knowledge14,
pose barriers that make the prospects of repeating the experience in
the Old World unrealistic. Add to that an important speculative
factor, the oft-repeated idea that a financial bubble created by
artificially inflated gas prices in combination with production
declining at a dizzying speed, could lead to the premature death of
this energy "dream." All these factors together have
contributed to early withdrawal by several companies in Europe and
other parts of the world.
Promises
made by some European governments have simply not been enough. The
Polish permit allocation system has just gotten a beating at the
hands of the EU Court of Justice, which sows doubt regarding its
legality15.
Poland, which is the European leader with over 40 exploratory wells
and hopes to begin commercial utilization around 2015, has recently
enacted a legislative modification which exempts boreholes drilled to
a depth of less than 5000 metros from undergoing the corresponding
Environmental Impact Assesment16.
The intention is to quiet the vocal dissatisfaction of businesses who
are asking more tax and regulatory slack. In spite of all this, Exxon
Mobil left the country 2012, as have Talisman y Marathon Oil in 2013.
l The Polish government is trying hard to squelch rumors of an exodus
of foreign oil business leaving the country, in an attempt to plug up
the drip and prevent companies like Conoco Phillips, Eni, and Chevron
from following suit17.
This last corporation has had a group of Polish farmers opposed to
its activities occupy the land at one of its concessions18.
On
the other hand, the British government, which has had to impose a
temporary moratorium in 2011 (now lifted) after the seismic events
caused by the boreholes owned by Cuadrilla Resources corporation in
Lancashire (the only ones so far), has promised the companies in July
of 2013 “the most generous tax regime in the world” with large
reductions for investing in the UK. As a parallel measure in May it
promised reductions in electricity charges to residents of
municipalities that do not oppose fracking19,
even though the following month a spokesperson for Cuadrilla was
caught red-handed contradicting the government “off-the-record”
regarding the possible reduction of electricity bills.20.
Governments wishing to promote acceptance of the practice are left in
the paradoxical position of promising businesses that prices will not
go down, and citizens that they will have cheap energy. This
generally favourable outlook has encouraged energy company Cuadrilla
to rush the application process for a permit to start drilling at
another location, in Balcombe (West Sussex). The company has had to
temporarily suspend its plans however, due to the great deal of
opposition the project has met with from local citizens. The protests
and human chain blockade are only precedented by the anti-road
protests of the 90's, and have generated overwhelming international
support.21
Withdrawals,
Opposition and Moratoria
On
occasion withdrawal by corporations, as in the case of OMV in
Austria, is related to strict environmental requirements imposed by
the government.22
Shell left Sweden in 2011 after finding lower reserves than expected
and now Swedish Parliament is trying to pass some sort of moratorium,
although currently the first attempt has not met with success. It is
possible that Dart Energy will leave Scotland due to the low quality
of the gas found there.23.
Dart Energy, which is in tragic financial shape, has already
announced it will quit its concessions in Australia, owing to new
aquifer impact requirements imposed by the Australian government.
Additionally, in Australia the regional government of New South Wales
has recently ruled to create a 2 km exclusion zone around residential
and agricultural areas, which will cause another two companies to
abandon their operations (Metgasco and Planetgas). Social
mobilization in Australia is very strong and has played a fundamental
role in the creation of these new requirements. The “Lock the gate”
movement is worth an individual mention; communities have declared
each road, street, neighborhood, etc. "free of gas fields"
and have even blocked truck traffic, claiming that even though they
may have a legal license, they have "no social license" to
operate.
Opposition is also
gathering strength with remarkable speed in New Zealand, where one of
the biggest dairy cooperatives in the country, Fonterra, has
announced that it will not buy milk from farmers who accept drilling
mud as a fertilizer for their land24.
Similarly, Dutch and German beer breweries (including Heineken)25,
following the example of some of their American counterparts, have
expressed their concern about the possible consequences to their
operations due to possible aquifer contamination and have requested a
ban on the technique. The Netherlands, which has conceded several
exploratory licenses, has frozen operations pending completion of a
report on environmental hazards, The
report, presented with little transparency around the end of August
of 2013, downplays the risks involved, comparing them with
traditional extraction operations, and has been the object of
criticism on various fronts, including from scientists. In spite of
political backing it receives, Government has occasionally
understated the role of shale gas, pointing out that shale gas
production would only amount to a couple of percentage points of
current natural gas production26.
The minister of Economy has this September announced the moratorium
will stay in place for at least 1 more year27,
due to a large extent to public opinion, largely opposed to the
activity.
Dutch Rabobank has announced several months ago that it will not loan
money for hydraulic fracturing operations28.
The Republic of Ireland is in a
similar situation of "unofficial moratorium". The two gas
companies with permits in Ireland, Tamboran y Enegi, will have to
wait until early 2015 to find out whether they will be able to drill,
as results from environmental risk studies carried out by Ireland's
Environmental Protection Agency will not be ready until then.
Not daring to make
public statements in pre-election season, at least not openly,
Germany has given in to social and state pressure and has had to
postpone passing a law intended to regulate fracking until after the
September 2013 elections; this law would include a mandatory
Environmental Impact Assessment and bans in zones that affect
aquifers, as well as other environmental requirements.29.
In addition, the German Advisory Council on the Environment
(Sachverständigenrat für Umweltfragen, SRU) threw cold water on the
corporations' hopes in May when it published some statements what
made clear that shale does not play a key role in the national plan
for the “Energiewende”
(the energy transition), nor will it guarantee energy security or
lower prices.30.
Opposition to fracking in Germany, although lacking strong federal
coordination, launched a joint resolution in May of 2013 (the Korbach
resolution31)
demanding an immediate ban. At the moment there is a moratorium in
North Rhine-Westphalia, in Northern Hesse the first permit has been
denied, and in Thuringia BNK Petroleum has had its license revoked.
In the Czech Republic, the three
licenses applied for by BasGas Energia and Cuadrilla Moravia are
frozen because the legislature is processing a bill to establish a
two-year moratorium, although the proposal has been in administrative
limbo for almost a year and there have been political motions to
torpedo it. The citizen movement Stop HF is playing an important role
in generating social pressure.
It
seems evident that electoral
ups and downs have a decisive role. In Denmark, two licenses were
granted to Total in 2010, but the incoming government after the 2011
elections established a temporary prohibition for new licenses. In
Romania, promises to ban hydraulic fracturing contributed to the
election of the current government in the May 2012 elections. A sort
of de
facto
moratorium
was declared until the end of the year, although the government did
not in the end honor it, granting 5 licenses in early December to
Chevron and Shell. In addition, Parliamentary elections near the end
of 2012 created a pro-fracking majority in the legislative chamber.
The people have held massive protests and even 3 referenda
in Dobrogea, one of the affected areas, that have made the massive
opposition to the operations quite clear. Fracking-free
municipalities are also multiplying in the province of Vaslui,
another affected area.
In the opposition to hydraulic
fracturing, one typically finds a central government trying to level
the field for industry, while smaller administrative entities like
regional, provincial and municipal governments take the side of the
citizenry, which is always against: there has never been a single
citizen movement in support of these projects. There are two
countries however that have become an example for others in ordering
a ban at the national level.
Bulgaria,
after well-attended protests in early 2012, ruled to prohibit the
hydraulic fracturing technique for exploration for shale oil and gas,
which was later reaffirmed by its parliament. In France, the other
country that has unequivocally banned the use of the technique (June
2011), either for exploration or extraction -astutely basing its
position on the precautionary principle- strong pressures from
industry are clearly felt behind the scenes, since rumors about a
revision of the decision are frequent. France has been the cradle of
European resistance, - very effective, horizontal and organized -32,
a model for many opposition groups in other countries. In June of
2013 the French senate approved a clearly pro-fracturing report, and
the Minister of the Environment credited her sudden departure from
the administration last month to pressures from the petroleum
industry displeased by her firm anti-fracking position.33.
Nevertheless, President Hollande himself has stated several days
afterward that there will be no hydrofracturing while he is Prime
Minister.34
However,
the law that prohibits hydrofracturing may be endangered by a civil
lawsuit filed by Schuepbach, a Texan company that had been awarded
one of the now revoked permits, and which also jointly holds similar
permits in Spain. The (Constitutional Council) will rule in Autumn of
2013 to uphold or overrule the law35.
As
for Brussels, the stage is set for debate. The public opinion survey
organized by the European Commission in 2013 has clearly shown that
the procedure does not enjoy public approval. Meanwhile energy
politics is the concern that is incumbent on each Member State, and
although barring the practice at the European level is unthinkable,
the European Commission can ignore neither the general feeling of the
populace nor the results of the research it has itself commissioned,36
which reveal the need for a clearer regulatory framework, and that
may pass, among other things, through a mandatory EIA while still in
the early exploratory stages and irrespective of the quantity to be
extracted, similar to what was approved by European Parliament's
Environment Committee in July of 201337.
Although there probably will not be a proposal from the European
Commission until at least the end of 2013, nor a definitive decision
until after European Parliamentary elections in 2014, there is an
underground pulse between Commissioner for Energy Öettinger38
on one side, who intends to give hydrofracturing free rein, and on
the other the Commissioners for the Environment (Potocnik)39
and Climate (Hedegaard)40,
who intend to lower expectations for shale gas.
Other Regions
Since the first well was drilled in
2011 in the province of Neuquén by Apache, an American company, on
Mapuche lands, there have been more than 100 wells drilled in
Argentina, which has made shale gas a banner for advancing toward
energy sufficiency, one of the reasons for the nationalization of
YPF-Repsol and the passing of the Law on Hydrocarbon Sovereignty. The
extraction frontier is being extended to provinces that haven't
traditionally been oil-producing, now searching in their shales, and
some, like “Entre Ríos,” are trying to anticipate the issue,
debating in its legislature a fracking ban aimed to protect the
guaraní aquifer, one of the biggest clean water reserves in the
world.
In
May of 2013, on the occasion of the Algerian Minister of Energy and
Mining's visit to London, a group of Algerian citizens held a
demonstration against the lack of public debate regarding fracking in
their home country and against the Algerian government's plans41.
Algeria has some of the best reserves in Africa and is already
offering a tax regime highly favorable for extraction which has
attracted corporations such as Shell, Eni, and Talisman.
China,
with one of the largest reserves worldwide, claims that shale gas
would cover 6% of its energy demand by 2020. Chevron, Shell, BP,
Exxon Mobil and Total are well positioned there42
and whether the growing social protest against environmental
degradation will include fracking is yet to be seen, at least in
densely-populated regions with water scarcity issues like the Sichuan
Basin.
Samuel
Martín-Sosa Rodríguez
International
Coordinator
Ecologistas
en Acción
2
World Energy Outlook 2012, International Energy Agency
http://www.iea.org/publications/freepublications/publication/English.pdf
12
http://www.foodandwaterwatch.org/pressreleases/spying-activities-on-anti-fracking-groups-in-poland-impede-open-debate-about-the-risks-of-shale-gas/
20
http://www.independent.co.uk/environment/green-living/cuadrilla-pr-man-admits-george-osbornes-shale-gas-revolution-wont-cut-energy-bills-8656246.html
21http://fractura-hidraulica.blogspot.com.es/2013/08/solidaridad-internacional-con-los.html
23
http://www.heraldscotland.com/news/home-news/burning-issue-poor-gas-quality-could-end-scots-drilling-plan.20723754
24
http://www.radionz.co.nz/news/rural/138025/fonterra-to-stop-taking-milk-from-farms-with-oil-and-gas-waste
25
http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/10076467/Fracking-could-ruin-German-beer-industry-brewers-tell-Angela-Merkel.html
27http://www.dutchnews.nl/news/archives/2013/09/no_shale_gas_decision_for_18_m.php
29
http://www.bmu.de/fileadmin/Daten_BMU/Download_PDF/Wasser_Abfall_Boden/gutachten_fracking_2012_en.pdf
30
http://www.umweltrat.de/SharedDocs/Pressemitteilungen/EN/CurrentPressReleases/2012_2016/2013_05_PressRelease_Fracking.html
34
http://blueandgreentomorrow.com/2013/07/16/no-fracking-in-france-while-im-in-charge-says-hollande/
35http://fractura-hidraulica.blogspot.com.es/2013/09/actualizacion-de-la-situacion-en-francia.html