Michael Schuetz Policy Officer Indigenous Fossil Fuels [email protected] Unconventional Gas and EU Energy Policy Brussels, 14 th April 2011.

Michael Schuetz

Policy Officer Indigenous Fossil Fuels

[email protected]

Unconventional Gas and EU

Energy Policy

Brussels, 14th April 2011

Disclaimer: This presentation is a working-level input on unconventional gas and not an official position of the European Commission. Should you wish to obtain a political statement or for media related purposes please contact the Commission's press service or the Commissioner's spokesperson.

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Gas in EU Energy Mix

Source: Eurostat

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100

80

60

40

20

GASOIL

2005 2008 2020 2030 2005 2008 2020 2030in %

82,4%

84,3%

92,7%

94,1%

57,7%

62,3%

75,9%

82,8%

EU-27 Import Dependency

(based on 2009 baseline scenario)

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The January 2009 Gas Crisis and its Impact (6-20 January 2009)

> 75 %

50 - 75 %

25 – 50 %

< 25%

0%

Ukraine

% of missing gas supply – 300 mcm/d for 14 days

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.Initial Commission assessment:

Unconventional gas could strengthen domestic production and contribute to security of supply

EU will still have to import most of its gas

.Further presentation:

» Commission energy policy priorities and their relation to unconventional gas

» European Union legal framework for unconventional gas projects

» Specific activities of the Commission on unconventional gas

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Commission Energy Policy Priorities

. Focus on implementing agreed policies (internal energy market, security of gas supply, energy efficiency, Renewables Directive)

.Energy Strategy 2011 – 2020

.Energy Infrastructure Package

.Energy Efficiency Action Plan

.Communication on External Energy Relations

.Energy Roadmap 2050

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Third Internal Market Package

.Non-discriminatory access to networks is an essential condition to allow fair competition between suppliers

» Regulation on conditions for access to the natural gas transmission networks (Gas Regulation)

» Regulation establishing an Agency for the Cooperation of Energy Regulators (ACER Regulation)

» Directive concerning common rules for the internal market in natural gas (Gas Directive)

.Regulations took direct effect on 3 March 2011

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Energy Infrastructure Package

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. November 2010: Communication on

Energy infrastructure priorities for 2020 and beyond

Challenges faced in each sector (electricity, gas, oil, CCS)

Strategic planning and proposal for set of tools

. 2011: Legislative proposal to create a facilitating environment for private and public investments in energy infrastructure

Unconventional Gas and EU Energy Policy, Michael Schuetz, 14/04/2011

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European Infrastructures PrioritiesGas and Oil 2020

Southerngas corridor

Baltic energy market inter-connection plan

South-North gas interconnections in Western Europe

North southgas & oil interconnectionsin Central & South East Europe

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Energy Roadmap 2050

. Support transition to low-carbon energy system in 2050

. Focus on energy security, competitiveness as well as decarbonisation, throughout transition

. Identify European-wide perspective

. Support from scenario analyses – but scenarios cannot be read as policy options

» Low Carbon Economy Roadmap came first (8 March)

» Conclusions on energy policy challenges will be in Energy Roadmap 2050

» Public consultation until 7 March

» Informal Energy Council 2-3 May

» Adoption planned for end of 2011

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Principles of EU Policy and Legislation

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. Member States have right to determine exploitation of energy resources and energy mix (Art. 194 TFEU)

. Member States are free to set more stringent environmental protection measures than required by EU-legislation (Art.193 TFEU)

. Subsidiarity

. EU-Directives transposed and implemented by Member State.

. Often EU-Directives set objectives, but means are up to the Member States

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Legal Framework on EU Level

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. Existing legislation covers all hydrocarbon exploration and production (conventional and unconventional)

» Hydrocarbon Directive

» Water Framework Directive, Groundwater Directive

» Environmental Impact Assessment

» REACH (Chemicals)

» Natura 2000

» Other (waste, noise…)

Within this framework Member States have to ensure appropriate licensing and permitting regimes

Unconventional Gas and EU Energy Policy, Michael Schuetz, 14/04/2011

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Assessing the Potential

. “In order to further enhance its security of supply, Europe’s

potential for sustainable extraction and use of conventional

and unconventional (shale gas and oil shale) fossil fuel

resources should be assessed.”

[European Council 4. Feb. 2011]

. Economically recoverable potential ?

» Following ongoing projects

» Explorations in EU just started

. JRC literature study focusing on economic impact

» Review of the evidence

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Assessing Environmental Impact

. Exchange with US

» Agreed at EU US Energy Council Nov. 2010

» US only country with extensive experience

» First activity: conference on 14 March 2011http://www.acus.org/event/european-unconventional-gas-developments

. Legal Study

» Evaluate appropriateness of EU legal framework

• Including environment issues

» Based on cases in selected Member States

» Possible good practices

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Conclusions

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. Best use of indigenous (fossil) fuels important

Economically viable potential unclear

. Other security of supply policies remain necessary

. Environmental concerns: credible answers needed

. EU has legal framework in place

Member States have to ensure appropriate licensing and permitting regimes

. Important: Innovative companies

EU Commission works on further improving gas market conditions and gas infrastructure