NGFE Reports – Shale rules & regulations, a view from Austria

Surface use constraints present a challenge for shale gas in ‘old’ Europe

Poland may have vastly greater potential for developing the shale gas industry, but for other countries and players in Europe the issues they face are the same.

For that reason, Marion Kaisinger, Legal Advisor at Austrian energy firm OMV said, “Thanks for being interested in a country smaller than Poland.”

In her talk to delegates at the Global Shale Gas Summit in Warsaw, Poland, Ms. Kaisinger, who is in charge of the environmental and legal aspects of upstream activities at OMV, pledged to speak about the Austrian shale gas experience in regards to Surface Use Constraints & Regulatory Procedures in European Countries.

First, she talked about OMV and its equity in other Central European energy companies like Romania’s Petrom, mentioned OMV’s involvement in the Nabucco natural gas pipeline project, as well as her company’s vast natural gas underground storage capabilities.

Of shale gas drilling operations in Austria and in Europe, Ms. Kaisinger queried, “What does this mean from a regulatory perspective?” This led her to outlining the legal framework in Austria for exploration and production operations.

She proposed, “Let’s try to look at our experiences [in Austria] and see what it could mean for unconventionals.”

Kaisinger said that in this regard Austria has a broad legislative basis in addition to European legislation, that there are pre-EU laws in existence as well as provincial regulation like landscape protection

“The Mineral Resources Law covers all the mineral resources of Austria, which causes problems because it covers conventional mining as well as that of hydrocarbons; it also covers people water and environment, making it a sort of one-stop-shop procedure.”

In addition to noise protection, Kaisinger spoke about water protection laws: “Water enjoys a very stringent protection law that is 50 years old, which is difficult to believe. The authorities must be consulted when large quantities of water are used in mining.”

In regards to local nature protection, she said drilling developments also require permission. Kaisinger added, “There is a chance for a single window approach.”

“Over certain production capacities an environmental assessment must be completed. While there is a one-stop shop approach there, the challenges include the definition of and changes to projects, like stakeholder involvement.”

Ms. Kaisinger also spoke of the surface concerns at a concession where OMV expects a pending shale gas development. “It’s a populated area,” she said, “and you can imagine that the closer you get to Vienna, the higher the population density. It’s also an agricultural area.”

According to her, huge swaths of lower Austria are landscape protection areas.

“One of the main challenges that I see is noise protection – this gets increasingly important the more permanent operations you get in one area. So the industry really needs to look into it. We are looking at rural areas where the present existing noise is low. There are exceptions for short-term developments.”

Emissions restrictions, water protection and waste management must also be considered, according to Kaisinger. While land is owned by individuals, including the right to ground water, ownership excludes the rights to hydrocarbons. She said, “Operators must seek mutual agreements with the landowners.”

“Water supply could be an issue,” she said of shale gas operations, “but due to our strict regulations it would make efficiency and recycling imperative.”

“Service industries must protect groundwater when doing fracing,” added Kaisinger. “We need to reduce the footprint and certain substances might not be usable and we might need to use substitutes.”

Ms. Kaisinger summed up, “I think it’s a challenge for unconventionals to work within the confines of European regulations.”

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