EC "Recommendation" on Fracking Could Be a Precursor to Binding Regulations

The United States is not the only place where the regulation of hydraulic fracturing is a major issue of concern.  It is also a hot topic in Europe, as demonstrated by the European Commission's recent promulgation of a "Commission Recommendation" on "minimum principles" for high volume hydraulic fracturing.

The EC issued the Recommendation on January 22, 2014.  It applies to "high volume hydraulic fracturing," which for purposes of the Recommendation means injecting 1000 cubic meters or more of water per fracturing stage or 10,000 cubic meters or more of water during the entire fracturing process.  Among the principles included in the Recommendation are:

  • Strategic planning- The Recommendation urges member states to prepare a strategic environmental assessment before beginning to grant licenses for high-volume hydraulic fracturing.
  • Site selection- The Recommendation calls on EC members to require operators to conduct a risk assessment of potential drilling sites to ensure that high volume hydraulic fracturing at the site will not result in ground water pollution or disrupt other activities around the site.
  • Baseline study- Member states are to ensure that operators conduct a baseline study of the environmental status of a drilling site before operations commence and report the results to the proper regulatory authority.
  • Operational requirements- Member states should require operators to employ best practices in carrying out their operations, including development of site specific water management plans, testing to ensure well integrity, and immediate reporting of incidents.  Member states are also called upon to ensure that operators minimize water consumption and the use of chemicals to the extent feasible.
  • Monitoring- Operators should be required to monitor the well site and the surrounding area before, during, and after high volume fracking occurs, using the baseline study as a reference point.
  • Financial guarantee- The Recommendation directs member states to require operators to post a financial guarantee to cover potential liability for environmental damage before commencing operations.
  • Information- Member states should require operators to provide the public with information concerning the chemical substances and volumes of water used in fracking.  The Recommendation also states that public authorities should publish certain information, including numbers of wells completed and planned, names of operators, permit conditions, baseline studies conducted, monitoring results, and results of inspections.

The Recommendation "invites" member states to put the minimum principles spelled out in the Recommendation into effect within six months.  It also contemplates that member states will provide annual reports on the measures they have put in place, with the first report due by December 2014.  The EC will create a publicly available "scoreboard" to compare the situation in each member state.

The fact that the EC's action on high-volume fracking took the form of a recommendation and not a legal mandate has been a source of controversy.  Environmental activists and officials in some European Union member states had pushed for legally binding regulations on fracking.  The creation of voluntary recommendations is seen as a victory for European shale-gas leaders like the UK, Poland and the Czech Republic, which lobbied against the imposition of binding regulations.  Not only are the principles set out in the Recommendations non-binding, but they are generally stated in broad terms, allowing member states a measure of flexibility in determining how they will be implemented.

The fight to impose binding, Europe-wide regulations on fracking is far from dead, however.  The Recommendation states that the EC will review the Recommendation's effectiveness eighteen months after its publication (i.e., in June 2015).  As part of that review, the EC will determine what additional measures — including binding legislation — might be needed.  The promised review may well prompt member states with active shale gas industries to make a serious effort to implement the Recommendation's provisions and/or impose additional state-specific laws.

The English-language version of the Recommendation is available here.

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