Thesis-Anne-Vos-Masters-SBR-and-EU-Law-3

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the EU could produce more gas itself in the future. To make this possible, her capacity needs to grow; both in conventional and unconventional resources. Second, the EU should have diverse sources of import to make sure that she always has gas supply. Currently the main gas sources are Russia, Norway and Algeria. They make three quarters of the EU gas import. 25 Now, some Member States ('MS') are even dependent on one supplier. 26 Also, it should not be forgotten that there are alternatives to the here-mentioned energy resources, namely; renewable energy resources, which are sustainable. However, these resources fall outside the scope of this thesis. On some occasions in this thesis, there will be referred hereto. In the U.S., the development of shale gas production has improved their security of supply. Nowadays, 60% of the gas production of the U.S. comes from unconventional sources of gas. Shale gas is the biggest contributor herein. This percentage may increase up to 74% by 2040. 27 A similar development is also desired in the EU. However, some side notes have to be made. Many aspects of the U.S. that made the growth of unconventional sources of gas possible are not available to the the same extent in the EU. As mentioned in the previous paragraph, the techniques used for shale gas exploitation need a great amount of land. While the U.S. is very widespread, the EU has a high population density. This high density again leads to more public opposition. Moreover, in the U.S. there were also other factors contributing to its development, such as: experience with the techniques, higher availability of needed infrastructure, geological features (shale gas is located deeper in the ground in the EU), energy operators ready to invest, land ownership, gas price formations and regulatory environment (shale gas projects got exemptions from certain pieces of U.S. environmental federal legislation, e.g. the Safe Drinking Water Act). 28 Furthermore, the development of unconventional resources has brought the U.S. many other advantages: the gas price dropped, the availability of jobs, increased competitiveness in gas sector, etc. These advantages for the U.S. did not stay unnoticed in the EU. Due to the self-supply of the U.S., a lot of LNG (liquefied natural gas) became available on the global market (since the U.S. did not imported it anymore to the same extent), which indirectly influenced the prices on the EU market. This price influence was also a consequence of the fact that more coal was exported from the US (since the US did not need this anymore itself), leading to the dropping of prices of coal by one third in the EU since 2011. 29 However, to what extent could the extraction of shale gas really secure the EU energy supply? There is still much uncertainty on the volume of shale gas on European territory and how much of that is actually technically (and economically) recoverable. It is estimated that there is circa 16 trillion cubic meters (Tcm) of shale gas technically recoverable in the EU, which would mean (if also economically recoverable) around 35 years of annual gas consumption (compared to the current level of gas consumption of 2012). It is estimated that Poland and France have the greatest (technically recoverable) amount of shale gas on their territory (resp. 5.1 Tcm and 5.3 Tcm), after which Germany (0.23 Tcm), the Netherlands (0.48 Tcm), the United Kingdom (0.57 Tcm) Denmark (0.65 Tcm) and Sweden (1.16 Tcm) also have a considerable amount. 30 It is however unclear how much of these amounts are also economically recoverable; current technologies are only able to extract 15-40% of shale gas from the geological formations. Exploratory drillings could help to clarify the specifying of the recovery rates. Compared to other parts of the world - such as Asia, the Mideast, North Africa, North and South America - the EU's shale gas resources are very poor. 31 25 Commission Staff Working Document Impact Assessment (2014), part 1/4, pp. 10-11. 26 Commission Communication (2014), p. 2. 27 Commission Staff Working Document Impact Assessment (2014), part 1/4, p. 11. 28 Commission Staff Working Document Impact Assessment (2014), part 1/4, p. 12. 29 Commission Staff Working Document Impact Assessment (2014), part 1/4, p. 12. 30 Commission Staff Working Document Impact Assessment (2014), part 1/4, pp. 13-14. 31 Commission Staff Working Document Impact Assessment (2014), part 1/4, p. 15. 12
Besides doubt on the exact amount of extractable shale gas, there is also uncertainty about the actual security of supply and international competitiveness that shale gas projects could bring. Although the Commission recognises that the EU will not be able to cover her energy use, nor that shale gas extraction would put the EU on a level playing field with the U.S. (regarding energy prices) 32 , the production of shale gas can compensate for the decline of gas production in the last decade and prevent the EU from being even more dependent on import: "in a best case scenario, [the EU would be] able to contribute almost half of the EU’s total gas production and meet about around 10 % of the EU gas demand by 2035." 33 The Commission points out that even a slight moderation of the security of supply should be welcomed. Not only for MS' position (their ability to diversify their energy sources, improve their security of supply and enhance their negotiating position towards external energy suppliers), but also for the consumers and (energy intensive) businesses and industries: "[they] would benefit from any decrease in energy prices (or avoidance of further price increases)". 34 However, as said, shale gas production in the EU will not mean a complete security of supply, since still 60% of the EU gas consumption will come from imports in 2040. This means that the EU gas prices will still be determined by the prices from abroad. 35 However, the establishment of a 'steady 60%' could help to improve "the negotiating position of EU consumers towards external energy suppliers by increasing gas-to-gas competition". 36 Furthermore, it should not be forgotten that the production of shale gas could also have other (in)direct economic benefits, such as investments in infrastructure, incomes from taxes and royalties, and employment possibilities. According to a research conducted by Cuadrilla Resources, the production of three test wells per year would amount to 250 full time jobs (when taken all the tiers of supply chains into account). 37 2.2.2 Clean(er) alternative Another positive effect of shale gas production could be that it might pay a contribution to the environment. However, this would depend on several conditions. First of all, shale gas production should not replace renewable energy resources but only more carbon intensive fossil fuels. Furthermore, the positive contribution depends on the certain fossil fuels with which it is compared. Conventional natural gas is for example considered to have 1-5% less greenhouse gas emissions than shale gas, but with compared to the emissions of coal-based electricity (to which shale gas would produce 41-49% less emissions) and electricity generated from conventional pipeline gas produced outside Europe (to which shale gas would produce 2-10% less) and electricity generated from LNG imported into Europe (to which shale gas would produce 7-10% less emissions), shale gas production could be considered as a contribution to the decrease of climate change by human activities. 38 It should then be ensured that the additional air emissions (compared to the extraction of conventional natural gas) will be limited and properly controlled. 39 2.3 Concerns of shale gas There is many research conducted in order to address the concerns about shale gas. 40 The origin of many research is (North) American, since shale gas extraction already actually occurs there and they thus have more experience. In this paragraph, a stocktaking of the main concerns, addressed in those researches, will be made. The cumulative effect of all those concerns should also be kept in mind; maybe only some air pollution will not be the end of the world, but in combination with 32 Commission Staff Working Document Impact Assessment (2014), part 1/4, p. 61. 33 Commission Communication (2014), p. 4; IEA, Golden Rules for a Golden Age of Gas, 12 November 2012, p. 81. 34 Commission Staff Working Document Impact Assessment (2014), part 1/4, p. 17; Comm. Communication (2014), p. 5. 35 Commission Staff Working Document Impact Assessment (2014), part 1/4, p. 17. 36 Commission Staff Working Document Impact Assessment (2014), part 1/4, p. 62. 37 Commission Staff Working Document Impact Assessment (2014), part 1/4, p. 17. 38 Commission Communication (2014), p. 5. 39 Citizens' summary (2014), p. 1. 40 http://ec.europa.eu/environment/integration/energy/uff_studies_en.htm 13
Page 1: Shale gas extraction: In line with
Page 4 and 5: Index 1 Introduction p. 7 1.1 Shale
Page 6 and 7: 7 Conclusions and Recommendations p
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An important Dutch law which focuss
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follows after the subject is raised
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alance conflicting policies; the me
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prevailing social and political val
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It should be kept in mind, accordin
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concerning energy projects, in whic
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practice this distinction is less v
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national legal system, such as the
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application for sustainable develop
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6 Application of principles to shal
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The second justification concerns t
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Finally, it could also be questione
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Hence, these principles are really
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As set out in Chapter 5, the princi
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On the other hand, it should be rea
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this zone is made available. Also,
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With regard to the second part of t
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7.1 Conclusions Some remarks can be
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Gas is currently in development. In
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national interest and an imperative
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safeguarding of the drinking water,
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• Prechal & De Leeuw (2008) S. Pr
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• Q&A on the shale gas initiative
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• Case C-117/02 Commission v Port
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Websites • http://www.eia.gov •
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