“Risk” and Unconventional Gas Development in Europe
Risk is omnipresent in any resource exploration undertaking.
For E&P players, risk it is firstly associated in terms of the probability of commercial return on rather costly exploratory efforts. To those opposed to the expansion of unconventional gas development in Europe, risk is viewed in terms of potential environmental impacts.
In a recently published report “European Union and shale gas”, Maplecroft, examines the risk and opportunity in relation to shale gas potential in the European Union on a multi-dimensional level, with a particular focus on four key markets – the UK, France, Germany and Poland.
Where other assessments have focused on the prospective resources and environmental impact, Maplecroft, also considers the varying regulatory frameworks and the potential future direction of regulation at the EU and member state level.
“Shale gas exploration is being touted by supporters within the EU as a way to reduce energy dependence on external suppliers – notably Russia. Member states remain divided on the economic benefits, environmental hazards and the need to focus on other forms of energy. The different outlook of member states makes high level policy challenging, with the recognition that individual member states have sovereignty over energy policy,” said Mandy Kirby, Associate Director at Maplecroft.
The risk analysis and mapping company believes that variations in legislation at the national level, resulting from strong lobbying by interest and industry groups, will continue to restrict the scope of EU regulation over unconventional gas. As such more stringent environmental regulation can be expected at the EU level. Even if this takes some time to approve amongst member states, the trend of stricter legislation is worth pre-empting by the implementation of best practice standards in operations.
At the EU level, campaigners for more stringent environmental legislation have been the most vocal, but they are not the most influential players. Drastic interim action such as the French moratorium on hydraulic fracturing in 2011 is less likely in countries such as the UK, as the country cannot fall back on nuclear energy production to the same degree as France.
For more information on the Maplecroft EU Shale Gas Risk Report, please click HERE