A Low-Carbon Economy Still Europe's Top Priority, Says Commissioner

Europe needs to find its way to converge on a common long-term strategy on shale gas, said European Commissioner for Environment Janez Potočnik.

Speaking at the FT Global Shale Energy Summit in London, he explained that a continental framework would not exclude a high degree of national differentiation both in terms of energy mix and approach to shale gas, adding that the European priority is to remain "consistent with our long-term strategy of a low carbon, resource-efficient economy." 

Potočnik also confirmed that the European Commission would come up with a legislative proposal by the end of the year, not providing more details on the schedule.

TECHNICAL FRAMEWORK WOULD GRANT A SOCIAL LICENCE TO OPERATE 

The Commissioner said that member states have the right to define their own energy mix, which would not be affected but rather promoted by agreed technical practices.

“The Commission believes that an EU-wide risk management framework for unconventional fossil fuels extraction … would best address the concerns. Our objective is to put in place a framework that would reap the potential economic and energy benefits of shale gas, and ensure that extraction activities using fracking are carried out with proper climate and environmental safeguards,” said Potočnik.  

According to the European Commissioner for Environment, a common framework would address health and environmental risk. Doing so, it would allow the shale gas industry “to gain its social licence to operate.” In other words, public concern could be calmed down by a central intervention.

“The fact that there is very limited experience in Europe does not help reassure people. Any fracking related incident linked to insufficient preventive measures would lead to further public concern and distrust. It would have a serious effect on the image of the industry and public authorities involved,” Potočnik argued. 

CLEAR AND FLEXIBLE FRAMEWORK

Apart from the need to tackle public opposition, he outlined other three principles that are guiding the EU institutions in their effort to promote a European strategy on shale gas.

Firstly, the law has to shed light on the “fragmented and complex operating framework.” In this sense, the European intervention needs to be clear and simple. 

“As shale gas exploration activities progress, member states have started to interpret, sometimes in different ways, the EU legislation, and some are developing specific national rules. This may result in differing requirements from one member state to another, with a fragmented and complex operating framework within the EU,” said Potočnik.

Secondly, the law has to grant a certain degree of flexibility.

“We are indeed well aware that local features matter a lot, as many of the risks depend on the geological and geographical features of a project, for instance the proximity of an underground water reservoir, a natural reserve or a densely populated area.” 

WHAT’S THE VIEWPOINT OF THE INDUSTRY? 

If the first points made by Potočnik are straightforward, the European Commissioner raised a more controversial issue, claiming that the industry is asking Brussels' intervention. 

“There is a risk of national interpretations becoming legally challenged and of the internal energy market being jeopardised. Once again, member states and industry itself are asking the Commission for clarification,” said the head of the EC for the Environment. 

This argument was probably not as consistent as the others. Question marks are licit.

Indeed, given the European elections in May 2014, political patterns in Brussels could soon change. Some exponents of the industry even doubt that a law could be passed in the next two-three years. In this sense, if the intervention of European institutions could help member states, the parallel uncertainties in the business environment do not work in favour of companies and countries willing to go for shale gas. 

“The law could be passed in 2016 or later, but the timing is not appropriate. It creates confusion. We would prefer to have something before. Investors would be better off,” an official of a European country told Natural Gas Europe on condition of anonymity. 

LONG-TERM STRATEGY OF LOW CARBON 

Potočnik concluded that the top European priority is to promote an environmentally friendly financial recovery. 

“Just as we must do everything necessary to sustain and improve our global European competitiveness, we must also do everything necessary to live within the limits of our planet. There is simply no reasonable alternative,” he said, also mentioning that it is difficult to foresee the future of shale gas in Europe. 

Given the fact that the volumes of economically recoverable gas are not know, he argued, the effects on gas prices could be rather modest. And the convenience for the industry could be not much bigger.  

“Whether shale gas becomes a success story in Europe or not, whether it is profitable or not, we need to remain consistent with our long-term strategy of a low carbon, resource-efficient economy,” remarked Potočnik.

Sergio Matalucci