European Commission sues Poland over fracking-friendly law

By bne IntelliNews April 29, 2016

The European Commission will take Poland to court over its rules for drilling for oil and gas, which breach EU law, the EU executive said on April 28.

Until 2014, Poland had hoped it would benefit from reportedly large resources of shale gas so as to reduce dependence on imported Russian gas. In an attempt to facilitate exploration, Poland changed its law so that exploratory wells drilled to a depth of no more than 5,000 metres would not require environmental impact assessments (EIAs). However, Poland's shale gas dream has all but dried up; tests failed to reveal commercial flows.

Given that Polish shale deposits are rarely deeper than 4,000 meters, the change exempted all exploratory drilling from EIAs, which raised eyebrows in Brussels. While the combination of falling oil prices, prolonged procedures and – last but not least – worse than expected geology, ultimately rendered Polish shale gas effort fruitless, Poland did not revoke the law. That has prompted the EU to act.

“Under EU law, deep drillings need to be assessed, in particular for the waste they produce, their effects on water and soil, use of natural resources, the risk of accidents, and any cumulative effects they may have with other similar projects or activities,“ the Commission said in a statement.

At the peak of Poland’s shale gas exploration effort in 2012 and 2013, dozens of companies had plans to drill for shale gas on more than 100 concessions. As oil prices fell and drilling did not yield expected results, companies started to retreat.

Today, virtually only shale gas exploration is carried out by state-controlled PGNiG and PKN Orlen. The former’s plans to frack – pressure-pump water with additives into rock to force gas out – two wells in 2016 are seen as the ultimate make or break for Polish shale gas, for the meantime at least.

Poland is estimated to have 350bn-780bn cubic meters of gas in its shale rock. No well has yet produced shale gas in commercial quantities, however.

 

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