Shale Gas: Schuepbach challenges French Ban
The Texas-based oil company Schuepbach Energy has won a partial legal battle to review the current ban on hydraulic fracking in France and challenge the revocation of its two shale gas exploration licenses, a development being intently watched by supporters and opponents of shale fracking.
(Minister of Ecology, Delphine Batho, was sacked from her cabinet post Tuesday July 2 after publicly criticising planned cuts to her departmental budget. In a press conference two days later Delphine Batho claimed she had been fired because, “the French government has given in to shale gas and nuclear lobbies who wanted my head. These lobbies did not accept the targets I set for the policy of French energy transition, especially with regards to shale gas and a reduction in the amount of energy France will generate from nuclear power”, she said. She was replaced by Philippe Martin a Socialist deputy and expert in energy matters.)
According to Le Monde reporting June 27 Schuepbach was awarded the licenses in southeast of France in 2010. They were revoked in October 2011 after the Loi Jacob (Law of 13 July 2011) introduced by the conservative government of Francois Fillon prohibited fracking in France. The company took its case to the Administrative Court of Cergy-Pontoise and Suzanne von Coester, public rapporteur to the Council of State (Conseil d’Etat) has now agreed to refer the matter to the Constitutional Council to determine whether the Law of 13 July 2011, is consistent with the Constitution.
This Loi Jacob — so-called because it was tabled by Christian Jacob president of the UMP group in the French Assembly– bans the exploration and exploitation of gas and oil through hydraulic fracturing. It also provided for revoking permits for research and exploration on projects that employed the technique. The law is very clear: fracking is banned in France says Thomas Porcher author of the book “The Mirage of Shale Gas” (Le mirage du gaz de schiste)
According to the Atlantico website he said: “ Normally this message would be very clear to everyone and this attempt to find a loophole in the law strikes me as a form of aggression by Schuepbach Energy, especially since the latest polls show that the French are strongly against the exploitation of shale gas.”
Fewer than one in three of those polled (30%) and fewer even among French business leaders, one in four (23%) consider the exploitation of shale gas “compatible” with issues related to the policy of energy transition, according to two polls by Harris Interactive and the European Foundation for Climate published on June 12 Le Monde reported.
The Atlantico report went on: “The arguments advanced by Schuepbach Energy are that the Jacob law exceeds the “precautionary principle” allowed for in Article 5 of the Charter of the Environment(Charte de l’environnement); fails to take into account the principle of equality by banning hydraulic fracturing in the search for shale oil and gas but not its use in the search for geothermal sources (Editorial note: This argument was set out in detail here: France’s geothermal ‘fracking’ conundrum and see earlier French News Online reports); focuses excessively on protecting the environment at the expense of economic development contrary to Article 6 of the Charter of Environment and, finally, that the repeal of the company’s exploration licenses, by interfering with property rights, contravenes the principle of Article 17 of the Declaration of the Rights of Man and of the Citizen.
The Atlantico report concluded: If the law were to be considered unconstitutional, it would end the ban on hydraulic fracturing as it is not possible to appeal against the decisions of the Constitutional Council.
The Americans face apparently implacable opposition from Minister of Ecology Delphine Batho who told Le Monde: “The shale gas lobby will not get from this legal battle a result that goes against the outcome that followed citizen mobilization and protest”, referring to the numerous mass protest events launched in 2010 in south-eastern France and the Paris region. “If necessary, the government will not hesitate to re-table an amended bill in the National Assembly, but we’re not there yet.”
However there is not a united anti-fracking front in the government. Arnaud Montebourg the controversial and outspoken Minister of Industrial Renewal, has never hidden his opposition to the Jacob Law, and has voiced support for industry wishes to be able at least to research and explore French resources to assess the level of oil and shale gas reserves.
Meanwhile Christian Bataille (PS) and Jean-Claude Lenoir (UMP) two French parliamentarians — the former socialist the latter conservative — have tabled an interim report urging government to rethink the fracking ban. While Delphine Batho in a debate, June 5 on RTL reiterated government opposition to shale gas fracking, the parliamentarians report, released on June 6, defended “controlled” operation of shale gas. Delphine Batho debating with Laurence Parisot president of the employers association MEDEF said: “The reality is that the cost of mining for shale gas in the United States does not take into account the environmental damage caused” and “environmental dumping […] is neither possible nor desirable” in France. But the Bataille/Lenoir interim progress report of the Parliamentary Office for Evaluation of Scientific and Technological Choices (Opecst) — released June 6, says: “hydraulic fracturing is the most effective technique and better controlled to extract unconventional hydrocarbons, and (…) solutions exist to allow it with an acceptable impact on the environment, provided certain rules are followed, recalling that the technique has been used at least 45 times in France, between 1980 and 2011, and that “no damage has been reported.”
Discussing the economics of shale Thomas Porcher noted: “We know that the price of gas in the United States dropped to $3 (per million BTU) allowing U.S. companies to have low-cost energy and the exploitation of shale gas has created 600,000 direct and indirect jobs through the drilling of 500,000 wells. We also have American scientific findings on the impact of the exploitation of shale gas on neighbouring communities. Research by the NBER (National Bureau of Economic Research) showed that real estate lost 24% of its market value in a perimeter of 2000m around each well. Researchers from the University of Colorado showed that there was an increased risk of cancer in a radius of 805 meters around each well , and researchers from Duke University (Robert Jackson et al.) have shown that the exploitation of shale gas in Pennsylvania had resulted in pollution of groundwater.”
Defending the industry Jean-Louis Shilansky, president of the French Union of Petroleum Industries told Le Monde: “We must allow exploration in France. In theory, this can be done initially without recourse to hydraulic fracturing. But as in practice, no exploration permits have been issued, we at present face a situation where effectively any exploration is prohibited. To be able to test the marketability and the importance of reserves, we need to be able to frack. This does not mean that such operations will then be permanently allowed. All the government has to do is to refuse to issue permits …! But from the moment the level of reserves becomes known, it will be a different conversation. France is the only country with shale gas that refuses to allow exploration for potential reserves.”
However some wonder if Europe is coming to fracking just as its advantages wear thin. The Climate Crocks website carries this report on the current economics of shale in the US: “Last year independent petroleum geologist Art Berman, while reviewing the financial wreckage of the once flourishing, but now fallen shale gas drillers, noted that the industry was based on: an improbable business model that has no barriers to entry except access to capital, that provides a source of cheap and abundant gas, and that somehow also allows for great profit. Despite three decades of experience with tight sandstone and coal-bed methane production that yielded low-margin returns and less supply than originally advertised, we are expected to believe that poorer-quality shale reservoirs will somehow provide superior returns and make the U.S. energy independent.
“As Berman noted back then: “Improbable stories that great profits can be made at increasingly lower prices have intersected with reality.” The industry proceeded to abandon shale gas plays in favor of tight oil plays which have proven to be profitable with oil prices consistently crisscrossing $100 a barrel in the last two years. Apparently, price does matter when it comes to natural gas. And so, it seems natural gas won’t be endlessly cheap in America after all.
“As Berman foretold in an earlier piece, prices would have to rise to between $5 and $6 to make currently paid-for leases profitable from this point forward and between $7 to $8 to make new leases worth pursuing. For comparison, back in the heyday of cheap natural gas, the decade of the 1990s, the average annual U.S. price was $1.92 per mcf, according the U.S. Energy Information Administration.”
Further ammunition for those opposed to shale in France came on August 25 2012 when a group of doctors issued a health warning about shale fracking: “Shale gas drilling poses risks to human health, French environmental health association ASEF said. ASEF, which is comprised of 2,500 medical doctors, highlighted the use of numerous “toxic” chemicals which are pumped deep underground in the controversial hydraulic fracturing, or fracking, method used in shale gas exploration.
“Hundreds of chemical products are used in the exploration techniques, which are for the most part toxic or even carcinogenic,” said ASEF President Pierre Souvet.
“In addition, the fractured underground rocks also emit toxic substances such as heavy metals or natural radioactive substances. These pollutants can filter into groundwater supplies, contaminating the water that we consume and therefore affecting our health. Added to that is the question of the treatment of used water which returns to the service and which we do not know how to treat,” Souvet said.
Story: Ken Pottinger
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