Written
by Chloe Marie – Research Fellow
The
Global Shale Law Compendium series addresses legal developments and other
issues related to the governance of shale oil and gas activities in various
countries and regions of the world. Our first article highlighted governance
actions within the European
Union generally. In this, the second article
in the series, we will discuss legal, policy, and governance issues related to
shale gas development in France.
According
to the U.S. Energy Information Administration (EIA), France is one of the
European countries with the highest potential for developing shale gas, with
reserves estimated at 136.7 Tcf. Despite these promising reserves, development
has not yet happened, primarily due to public concerns about the technique of
hydraulic fracturing and skepticism about the ability of the existing
legislation to address these concerns.
The
controversy over shale gas development in France began in early 2010 when the
French government granted three exclusive licenses for the exploration of shale
gas, without any public participation, to the French energy company Total and the
multinational Schuepbach Energy. The French Mining Code provides for two types
of mining titles, namely an exclusive permit for the exploration phase and a
concession for the exploitation phase. The
French government was criticized quite broadly for acting with a lack of
transparency and for failing to comply with the provisions of the French
Environmental Code in the granting of these exploration licenses.
Generally,
public participation is required in regard to all decisions that could have a
potential impact on the environment pursuant to the Charter for the Environment
of 2004 contained in the French Environmental Code. The principles and aims of
the Environmental Code, however, are not explicitly expressed within the
provisions of the Mining Code. Thus, the French government relied solely upon
the Mining Code to grant licenses without any public participation or
consultation. Due to a public outcry about the lack of public participation and
expression of public concerns that the risks associated with the use of
hydraulic fracturing had not been fully identified, the French government
withdrew the three exploration licenses issued to Total and Schuepbach Energy
companies and enacted the Prohibition Act in July 2011
forbidding the use of hydraulic fracturing. The French government announced
that the ban would remain in place until a comprehensive body of evidence
relating to the environmental risks associated with shale gas development had
been submitted to the government.
Interestingly,
the Prohibition Act of 2011 does not forbid shale gas extraction itself, but
merely the use of hydraulic fracturing. As a result, with hydraulic fracturing
being the only technology currently used to fracture into underground shale
formations, the Act functions as a de
facto prohibition on shale gas development. The Prohibition Act does
provide that exploratory research for scientific purposes is allowed in order
to determine the effects of hydraulic fracturing on the environment. In
addition, the Act provided for the creation of a National Commission on the
Orientation, Monitoring and Assessment of the Exploration and Exploitation
Techniques of Liquid and Gaseous Hydrocarbons. The purpose of this Commission
is to define the conditions under which exploratory research would be
envisaged. To date, however, the Commission has not been established.
In
January 2013, Schuepbach Energy challenged the Prohibition Act, arguing that
the Act was contrary to the French Constitution by infringing upon economic
freedom, affecting guaranteed property rights protection, and ignoring
important principles of the Charter for the Environment of 2004. In a decision dated October 11, 2013, the
French Constitutional Court upheld the Prohibition Act as a valid means of
protecting the environment.
Since
the enactment of the Prohibition Act, the government has consistently expressed
a negative opinion towards the development and production of shale gas, through
the use of hydraulic fracturing, in France. There have been some political
figures, however, including the President of the French Republic, François
Hollande, who have indicated an interest in shale gas production if alternative
techniques could be developed to replace the use of hydraulic fracturing. In
this regard, two recent reports have reignited the debate on whether the
exploration and exploitation of unconventional hydrocarbons could be done in an
environmentally sound way. In November 2013, the French Parliamentary Office
for Evaluation of Scientific and Technological Options issued a report addressing alternative
techniques to hydraulic fracturing for the development of unconventional
hydrocarbons. In this report, the Office recognized that, if improperly
performed, hydraulic fracturing for the exploitation of unconventional
hydrocarbons could have dramatic impacts on the environment. It states,
however, that new technologies are now available to improve and further control
hydraulic fracturing operations. The Office therefore openly maintained that
French shale gas reserves should be exploited and pointed out that
“technological choices are . . . primarily political choices . . . but research
must nevertheless follow its course, without prejudging its results.”
Another
report,
dated April 2015 and commissioned by former French Minister of Industrial Renewal,
Arnaud Montebourg, recommended the safe exploitation of shale gas resources using
fluoropropane, a non-flammable gas generally used in extinguishers. This method,
which was developed by the American energy company eCorp International, LLC, as
an alternative to hydraulic fracturing, does not require the use of water nor
does it require chemical additives. This report was at the center of a scandal that was
uncovered by The Figaro, a French newspaper, alleging that the French
government – still firmly opposed to shale gas development – had purposely buried
the report in an attempt to avoid commenting on the merits of its conclusions.
The
pending reform of the French Mining Code, proposed in January
2017, may reinitiate discussion on the subject of shale gas development. The
purpose of this long-awaited reform – undertaken in 2012 – is to strengthen
access to information and public participation in addressing the granting of
mining permits pursuant to the Charter for the Environment of 2004. Interestingly,
the Reform makes no mention of shale gas development in its text, and opponents
to such development fear future flexible arrangements from the government. As a
result, the Chairman and Rapporteur of the French National Assembly’s
Sustainability Commission, Deputy Jean-Paul Chanteguet, introduced an amendment
to the Reform to completely prohibit shale gas development on French territory.
At
the end of February, the French Parliament suspended its session as a result of
the upcoming May election without adoption of the Mining Code Reform. This
leaves some room for speculation as to whether the ballot results will impact
the adoption of the reform text. Stay tuned!
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