Fresh threats to Europe’s shale industry as lawmakers draw up regulations

Fresh threats to Europe’s shale industry as lawmakers draw up regulationsEuropean countries could be subject to wide-ranging new regulations that would undermine the continent’s plans to follow the US, where shale wells have sharply reduced the price of gas, reports The Times (subs required).

According to the paper, the European Commission plans to announce in January tighter guidelines for companies involved in the shale gas industry. As part of its 2030 energy and climate-change strategy, the group would argue that the industry would benefit from clearer environmental standards requirements firms would ill have to meet.

With UK shale companies already dealing with environmental opponents, some of which are reportedly looking to leverage nuances in planning and trespassing laws, analysts believe the move could result in a major setback for blossoming industry in Europe, far less developed than in the U.S.

Companies are already required to make an environmental review before drilling a natural gas well. But the new rules would require a full environmental assessment before start fracturing in shale deposits, which critics complain would add more red tape to European business at a time when the bloc is seeking a way out of the economic crises that hit its members in the last five years.

Studies by the British Geological Survey suggest that the small island nation has abundant shale deposits and is home to the world's larges shale gas field, the Bowland Shale located underneath Lancashire and Yorkshire.

The UK has been a net importer of gas since 2004 and the current government is looking to mirror the U.S.'s success in reducing net imports with domestic hydraulic fracturing.

However, a recent report by the U.S. Energy Information Administration (EIA) estimates the shale geology of the UK is “considerably more complex” and costs would be “substantially higher” than in North America. Although the UK’s resources appears substantial, commercial levels of production are “yet to be established”.

While the U.S. has drilled 150,000 shale gas wells, the UK has only done so in about a dozen of them, with only one having a detailed geological examination.

Experts say a fair amount of more drilling needs to be completed to fully assess the viability of shale prospects in the UK and that this will take time.

Last week the British government's health agency said the risks to public health from emissions caused by fracking for shale oil and gas are low as long as operations are properly run and regulated.