Fracking encounters institutional complexity

While the trajectory from Gasland to the NGOs and green parties in the EU presents a

clear trajectory, the picture is muddied when we look at the other EU institutions and their encounters with the fracking question. The initial engagement in the European Parliament (EP) resulted in a 2011 study on the impacts of shale gas on the environment and human health (European Parliament 2011). This study drew explicitly on the American experience to identify a number of risks and the gaps in European legislation. The study recommended that shale gas and oil activities be dealt with in a dedicated Directive owing to the complexity of the activities. The framing seems consistent with

the Green/NGO “sustainability threat” frame that came out of Gasland, but later in the

EP, it became apparent that two camps had emerged on the shale gas question.

In December 2012, the plenary session referred the question of shale gas to be taken up in two different committees: the committee for Industry, Research and Energy (ITRE), and the committee for Environment, Public Health and Food Safety (ENVI). Both committees worked in parallel on opinion reports about the industrial (European Parliament 2012b) and environmental (European Parliament 2012a) impacts of shale gas, respectively. According to interviewee F1, the plenary session had not been able to agree on which committee the shale gas file belonged, leading to the compromise of granting it to both. This indicates that there was at least two frames in contention in the Parliament at this stage, and that neither had succeeded in dominating the other. The reports agreed on some points, but diverged on others. They agreed that all shale gas activities should undergo an environmental impact assessment regardless of scale or duration and that public consultations and transparency are paramount in ensuring the sustainability of projects. When it comes to enforcement, however, the ENVI committee

called for a harmonized EU legal framework, while ITRE believed that it should be left to the companies to agree on and follow a set of best practices. Both studies asked the Commission to further analyze the issue of shale gas and how to regulate it. The decision to treat fracking in both the ITRE and ENVI committees is highly indicative of the polarization of the issue into staunch anti- and pro-fracking camps.

During 2012, the Commission had begun its information gathering process on shale gas as a background for decisions on possible next steps. The decision to gather information on shale gas was motivated in part by a February 2011 call from the

Council to assess the possibilities of developing shale gas in Europe.28 In September

2012, it released three studies: one on climate impact, one on energy market impacts, and one on risks for the environment and human health. The climate and environment reports were prepared by external consultants for DG Climate and DG Environment, respectively. The Commission’s Joint Research Centre prepared the energy markets report. In a press release, the Commission concludes that while the energy markets report noted considerable uncertainties about recoverable volumes, technological developments, public acceptance and access to land and markets, the environmental report was clear in identifying “the need for an appropriate framework to enable a sustainable shale gas extraction in Europe” (European Commission 2012d).

Under EU law, the Commission has no say in how member states choose to exploit domestic resources and make up their energy mixes. However, EU environmental law has clear Directives on water use, mining waste, emissions and air quality, for example, which would apply to fracking operations. The 2012 environmental study concludes that there are inadequacies in the current body of

applicable EU law “that could lead to risks to human health and the environment not being sufficiently addressed” (AEA Technology 2012, p.119). The environmental threat framing is evident in the report’s use of a risk assessment methodology, and interestingly, the press release reveals a similar assumption about the Commission’s legislative duties going forward: “The studies published today will inform ongoing work examining the need for a risk management framework for shale gas developments in Europe and, if necessary, the form it might take” (European Commission 2012d). The Commission is clearly thinking in terms of risk mitigation at this stage, which is supported by how unconventional fossil fuels were incorporated into the 2013 work program.

The Commission’s 2013 work program included an objective called “Using Europe’s resources to compete better” (European Commission 2012a). The purpose of the objective is to discover better ways of being “more innovative, productive and competitive whilst using fewer resources and reducing environmental damage”. Initiative number 41, a subcomponent of this objective, calls for an “Environmental, climate and energy assessment framework to enable safe and secure unconventional

hydrocarbon extraction”.29 At first glance, it seems that the Commission has lumped the

three different concentrations of its 2012 studies into a single assessment framework, and they view the benefits of such a framework as contributing towards both competitiveness and energy security. Judging from the work program, the Commission intends to cover all its bases. There are elements in this initiative pertaining to the environment, climate, energy, industry and competitiveness. The question, then, is to which DG should the initiative be delegated? The task fell to DG Environment,

although DG Energy would have been an equally probable candidate. The answer lies in the Commission’s changing understanding of how fracking fits within the body of EU law, especially by DG Environment.

In order to trace how the Commission changed its perspective on the regulatory challenges of fracking, it is important to consider negotiations on the Environmental Impact Assessment (EIA) Directive and related studies. This Directive applies to all projects that have a significant effect on the environment, and it lists specific projects in its annex which must carry out a mandatory EIA. In 2011, the Commission issued a guidance note on the application of the EIA Directive to projects related to the exploration and exploitation of unconventional hydrocarbons. In the note, the Commission services are of the opinion that the EIA Directive applies in its current form, but a mandatory assessment is only required for natural gas projects exceeding 500,000 cubic meters extracted per day, which puts unconventional exploration projects well under the limit (European Commission 2011a). Another guidance note from early 2012 by Environment Commissioner Potocnik to the Parliament’s ENVI Committee advises on a number of other environmental laws that already apply to unconventional hydrocarbon projects, in addition to the EIA Directive (Potocnik 2012). The note does not mention or indicate any gaps in EU legislation. Other studies also find the Commission reflecting on its legal duties when it comes to unconventional hydrocarbons. A study for DG Energy by an external law firm from November 2011 looked at the application of EU law in four member states (Philippe & Partners 2011). This study also concluded that an adequate environmental framework was already in place.

In the fall of 2013, the Commission, in particular DG Environment, had completely changed its stance. A study undertaken for DG Environment by an external consultant looked at the regulatory provisions in eight member states and found a number of areas of legal uncertainty and possible limitations (Milieu Ltd. 2013). In a speech in October 2013 at the Financial Times Global Shale Energy Summit, Environment Commissioner Potocnik discussed the need for a “European strategy for shale” and the possible benefits and concerns that have arisen (Potocnik 2013). He concludes that the previous two years of studies have led the Commission to believe that “an EU-wide risk management framework for unconventional fossil fuels extraction, with a view to ensuring that harmonised provisions applying across all Member States, would best address the above concerns”. Also in the fall of 2013, the European Parliament had voted in favor of amendments to the EIA Directive that would include shale gas exploration projects in the list of activities requiring mandatory EIAs (European Parliament 2013). According to interviewee statements, the negotiations on the EIA Directive were “hijacked by shale gas - it wasn't in there originally, but it became a part of negotiations due to the political nature of the debate” (F4).

What had changed between early 2012 and late 2013 was the increasing politicization of the issue, which became apparent especially when the EIA Directive was being discussed in Parliament. “Shale was included into the directive for political purposes, so MEPs could say to their electorates that they were active on shale issues” (F2). Ultimately, shale gas exploration projects were taken out of the annex of projects requiring mandatory assessments due to a blocking minority in the Council (especially the shale gas-active member states of UK and Poland), who threatened to scrap the entire legislation if it stayed in (F1, F4). The EIA Directive negotiations showed that the

shale gas debate had changed markedly since earlier years. It had become “the most contentious battle with the environmental lobby and DG Environment” that the oil and gas industry had seen thus far (F6). It pitted environmental groups drawing on momentum with the public against the oil and gas industry and certain Member States who had a direct interest in developing their shale gas reserves. These high-profile players clashed very publicly right from the earliest mentions of shale gas in the EU, providing a very different policy environment for regulators to navigate. Specifically, it was impossible for first impressions to really set the tone within the Commission owing to the presence of multiple contending frames. However, the agenda-setting power of the Gasland movie and subsequent mobilization by green groups should not be discounted.