The Network on SSRN: Joanna Glowacki and Christoph Henkel on Hydraulic Fracturing in the EU

Network member Christoph Henkel (Mississippi) has posted a new article on SSRN, co-authored with Joanna Glowacki, entitled "Hydraulic Fracturing in the European Union: Leveraging the U.S. Experience in Shale Gas Exploration and Production."  The article is forthcoming in the Indiana International & Comparative Law Review.  The abstract is below and the full article may be downloaded here.

* * *

Hydraulic fracturing has been the subject of much debate recently, both in the United States and increasingly in Europe. Advances in hydraulic fracturing technology have led to a shale gas boom in the United States, significantly lowering natural gas prices, and causing some foreign businesses to move manufacturing plants from Europe to the United States. In the United States, approximately 11,000 new wells are “fracked” each year, adding to the currently existing 35,000 wells. When compared to these numbers, European shale gas exploration remains in its infancy and commercial scale gas extraction has yet to be established. At the same time, many Member States in the European Union consider the exploration of unconventional fossil fuels essential for their energy security and independence from Russian gas.

While natural gas is a cleaner burning fossil fuel than oil, the fracking process itself, as well as its requisite infrastructure, brings with it numerous environmental and health concerns. As shale gas exploration progresses further and is commercially developed, many previously unrecognized and underestimated concerns have become more prevalent. The use of fresh water during the process of fracturing and the potential for pollution of surface and groundwater are only two examples of such concerns. In fact, a clear picture of the types and quantities of chemicals being used as additives in fracking fluids injected into the ground and the risks they may pose for the environment or human health has been lacking. In the United States, under the Safe Drinking Water Act, a permit is required only if diesel fuels are used as additives in fracking fluids. Yet, there is no definite clarity with respect to whether operators are actually using diesel fuels as additives or how much is being used.

With little or no experience in shale gas development, Europe is looking toward the United States as a potential model for its nascent regulatory framework. While there is a patchwork of EU directives that address fracturing, there are specific shortcomings due to the fact that shale gas development has not been pursued in Europe. The European Commission and the European Parliament continue to evaluate the impact of fracturing on the environment and human health, and have already released numerous studies and reports. It is the objective of these initiatives to ensure that the environmental risks arising from shale gas projects and cumulative developments are adequately identified and managed in Europe. In addition, the European Union is attempting to establish a common regulatory approach allowing for a comparable and coherent regulatory environment across the European Union and all its Member States.

This article analyzes the existing regulatory frameworks in the United States and European Union as they relate to hydraulic fracturing of shale gas. It is argued that while the United States’ experience may serve as an example for the European Union, the shale gas boom in the United States has raised a host of environmental and health concerns that need to be addressed. At the same time, the United States may be well advised to consider some of the developments in Europe, where, for example, mutual non-disclosure agreements regarding damages to the environment and human health may not be allowed.