Shale Gas Boost As Plans For EU Laws Are Scrapped

  • Date: 14/01/14
  • Emily Gosden and Bruno Waterfield, The Daily Telegraph

Britain has seen off the threat of new EU laws that could have strangled the nascent UK shale gas industry at birth, according to European Commission documents seen by The Telegraph.

The EC has shelved plans for a new directive, following lobbying from David Cameron, and is instead preparing to announce guidelines that shale drillers say will not inhibit the push for fracking as they simply echo existing UK rules.

The EC is also preparing to say that shale gas could cap or even cut energy prices and bring economic benefits to Europe, according to a draft copy of its communication, due to be issued later this month.

It argues that while the price effect of shale is likely to be “moderate”, European countries could benefit from “even a moderate decrease or avoided increase in gas prices”.

The EC’s qualified support for fracking, despite bans in some member states, will be a further boost to hopes of a UK fracking boom after French energy giant Total on Monday confirmed a $48.1m (£29.3m) deal to explore for shale in the East Midlands.

Ministers also unveiled plans intended to bolster support for fracking by allowing local councils to keep 100pc of business rates from the controversial process, rather than the usual 50pc.

But they faced fresh warnings from the Local Government Association that the package of benefits offered to communities by shale gas explorers – including a 1pc share of revenues – would be insufficient to win public support.

Some EU countries had been pushing for new laws because, as the EC admits in the draft communication, “EU environmental legislation was not developed to specifically address the risks associated with the ‘fracking’ technique”.

But Mr Cameron had appealed to the EC not to opt for legislation as shale explorers had feared the lengthy process of drawing up new laws would have delayed drilling.

Michael Fallon, the energy minister, said on Sunday that Britain’ hopes for a shale boom could yet be “choked by faceless Brussels bureaucrats” because of the plans for a “cumbersome new EU directive on shale”. “They are proposals that would take years to finalise and would add damaging uncertainty and crippling costs to business,” he wrote in the Sun, adding that “the next few weeks will be critical” in fighting off the plans.

Instead of such a law, the draft EC document adopts a “recommendation” including “key principles which, if fully applied, would contribute to enabling shale gas actitivies, while ensuring that climate and environmental safeguards are in place”.

The EC will “closely monitor the implementation of the recommendation” and report to the Eu Parliament and Council “within 18 months”. Only then “if necessary” would it reconsider legislation.

The recommendations include conducting strategic environmental assessments, monitoring the impact on water, air and seismicity, and providing transparent information about chemicals used in fracking.

Senior industry sources said that all the recommendations in the guidelines were in line with existing UK practice.

Commission officials confirmed that plans for a new EU directive have been shelved indefinitely. “I can confirm that as part of our climate and energy 2030 package in January, the commission will present firm guidance. However, the commission will not propose draft legislation,” said an official.

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