Countries Approach Fracking With Interest and Caution

, New York Law Journal


Stephen L. Kass

In my last column ("Keystone and Fukushima: Balancing Needs and Risks," Sept. 18, 2013), I pointed out the significant environmental risks from both Canada's oil sands and Japan's nuclear facilities and concluded that, after balancing their respective benefits and risks, neither represented a desirable model for either the United States or the international community to meet their future energy needs. Those needs are expected to grow substantially as developing countries strive to improve their standards of living and the world's population grows from seven billion to more than nine billion people.

Where is that new energy going to come from? While the first choice, especially in the United States and other developed countries, must surely be conservation, energy efficiency and renewable energy sources (solar, wind, geothermal and tidal), those are not sufficient for most developing countries, where average consumption is much less than in the United States, renewable options are often fewer and the additional infrastructure required for renewable energy makes it an unrealistic foundation for national energy policy. Indeed, even in the United States, conservation, energy efficiency and renewables are seen as part of a comprehensive energy mix, not as a complete substitute for fossil fuels until at least 2050.

That leaves coal, oil and natural gas as the most realistic base energy choices for many developed and developing countries. While coal is recognized as a major source of greenhouse gases (GHGs) and other environmental impacts, its low cost and wide availability continue to make it attractive to China, India and many other countries. Oil contributes less than coal to climate change, but it too is a major source of GHGs and is often tied to politically unreliable regions (the Middle East) or governments (Russia, Venezuela).

Vastly increased, and less expensive, natural gas from hydraulic fracturing ("fracking") is therefore attractive to economists seeking to stimulate development, to national security officials seeking independence from unreliable oil suppliers and to those environmentalists who believe (as I do) that substituting natural gas for coal and oil is necessary if the world is to have any chance of avoiding runaway GHG emissions from developing countries. Such emissions already threaten to overwhelm any efforts to hold global warming to "only" two degrees above pre-industrial levels, a goal unlikely to be achieved absent a significant slowdown in future GHG emissions from China, India, South Africa and other emerging economies that now rely heavily on coal.

This column describes the current fracking debate in Europe and several Asian, African and Latin American countries, including the extent to which the resolution of concerns about fracking's environmental impacts in the United States may affect policy decisions abroad.

The U.S. Fracking Debate

Much has been written about fracking in the United States, where fracking now accounts for about 25 percent of domestic natural gas (a figure expected to rise to 50 percent by 2035). In addition to lowering domestic energy costs, fracking is widely credited with reducing U.S. "carbon intensity" and GHG emissions in 2012 by substituting gas for coal in energy production. Nevertheless, fracking has been subject to intense attack, particularly in the Northeast, by environmental organizations and neighborhood groups concerned with potential impacts on local and regional water supplies, contamination of homeowners' wells, industrial traffic in rural or recreational areas, disposal of untreated fracking fluids in local wastewater treatment plants, potential methane releases during well development or operation, water availability in drought-affected areas and the oil and gas industry's arrogant refusal to disclose the composition of its fracking fluids. Some recent studies have also suggested that, unless methane releases from fracking are strictly controlled, the GHG advantages of natural gas over coal could be significantly reduced.

These concerns have lead the Natural Resources Defense Counsel, EarthJustice and other environmental groups to demand a halt to further fracking in New York, Pennsylvania and other nearby states. These campaigns, echoed by many grassroots groups in the Northeast, have persuaded both New York State's Department of Environmental Conservation and the U.S. Environmental Protection Agency to extend their already lengthy environmental reviews of fracking, during which further natural gas development in the Northeast is effectively on hold, even while fracking and natural gas exploitation proceed rapidly in the western United States.

EU Search for a Unified Policy

Natural gas is still largely a localized commodity. It is in gas form at normal temperatures and pressures and thus difficult to transport globally.1 While gas can be converted into liquefied natural gas (LNG), the technology involves specialized equipment and transport infrastructure, which are only starting to be developed on a large scale in the United States. Other countries with ample natural gas reserves similarly cannot export their natural gas until the necessary pipelines and LNG terminals have been constructed. This has led the European Union (EU) to consider how its member states can secure the benefits of expanded natural gas through domestic fracking without the environmental risks raised by U.S. environmentalists.

Like the United States, Europe relies on natural gas for approximately a quarter of its energy needs, but virtually none of that comes from fracking within the EU. Instead, many EU states rely on natural gas from Russia, a reliance that makes them (and others) anxious to find alternative sources of supply independent of President Vladimir Putin's continued good will. Despite this strategic concern, most EU states, and the EU itself, have been reluctant to embrace fracking because of the widespread public perception that it is environmentally harmful or, at the very least, risky and thus contrary to the "precautionary principle" that is a fundamental feature of EU environmental law.

At the same time, however, European coal consumption has continued to increase, and Europe saw a 3 percent increase in total carbon emissions in 2012. It seems likely, therefore, that EU policymakers will in the future reconsider their current stance on fracking, not only on strategic and competitiveness grounds, but also to meet their own reduced GHG targets under the Kyoto Protocol (to which the EU remains committed), provided the emissions benefits of fracking can be confirmed and its environmental impacts satisfactorily mitigated.

First, however, Europe's regulatory framework would need to be reformed. Most EU members rely on general mining or environmental laws to regulate fracking, resulting in sometimes conflicting laws and multiple permit requirements for a single project.2 In an effort to deal with this multiplicity of sometimes conflicting regulations, in November 2012, the EU, after refusing to approve a complete moratorium on fracking, embarked on its own effort to develop a coherent European policy for this new technology and in October 2013 voted to require energy companies to conduct environmental audits before fracking.3 As the EU search for a unified policy continues over the next year, it is useful to consider how several EU countries are approaching fracking in the interim.

France: In 2011, France, which relies largely on nuclear power, banned fracking entirely because of its perceived environmental risks. In October, 2013, the French Constitutional Court upheld the ban as constitutional.

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