France Faces Potential of Compensation Claims on Fracking Ban
The French state could see legal action claiming billions in damages as the result of its revocation of exploration licenses granted for unconventional hydrocarbons.
French industry publication BIP Enerpresse has reported that Schuepbach Energy is asking the French government for 1 billion euros ($1.36 billion) in compensation for the repeal of two exploration permits licenses in Nant (Aveyron) and Villeneuve-de-Berg (Ardèche), should a ruling of France’s Constitutional Court favour its position in a ruling expected on October 11th
These licenses were revoked following the adoption of July 2011 law which prohibits the exploration and exploitation of hydrocarbons by hydraulic fracturing.
The French court, which has the power to annul laws it deems to be unconstitutional, will decide on the ban imposed by the administration of Nicolas Sarkozy, in an appeal launched by the Dallas-based company.
The French government withdrew three shale gas permits granted to Scheupbach and Total SA following the adoption of the law which prohibits the exploration and exploitation of shale gas and shale oil by fracking.
Martin Schuepbach, founder of the company, declined to comment on the compensation figure when contacted by Reuters.
"I hope that shale gas will return to France, because it's environmentally safe, as we saw in the States," he said. "It would make a big difference for the French economy."
Schuepbach first contested the ban in a court of Cergy-Pontoise near Paris. This court forwarded the case to France’s Council of State, which then referred it to the Constitutional Council.
“No study has established that there is any risk linked to hydraulic fracturing,” Marc Fornaciari, the lawyer representing the US company, told the court in a submission last month.
“It has been used 45 times in France and has never caused one problem,” added Fornaciari.
President François Hollande has confirmed the intention of its government to maintain the ban on hydraulic fracturing, despite the pressures to reverse his policy against shale gas exploration.
Le Figaro recently suggested that at a time of rising energy prices, the development of France's shale gas prospects should perhaps be reconsidered, noting that plentiful, cheap shale gas has provided for an economic resurgence in the United States, resulting in a shake up the petrochemical industry worldwide.
However, in a television interview following Bastille Day celebrations, the French President reiterated his position stating: "As long as I am president, there will be no exploration for shale gas in France."
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