IN THE FACE of growing global demand for energy, there are serious economic and geopolitical implications from energy dependence, as we have seen in recent weeks with a very high proportion of Europe’s gas requirements coming from Russia via Ukraine. Currently 85 per cent of Ireland’s energy is imported, over 90 per cent of which is fossil fuels. It is essential that Ireland, along with other EU countries, becomes both more energy efficient and energy independent. Unconventional shale gas extraction, often referred to as ‘fracking’, is an option that requires serious discussion in this context.
Fracking consists of drilling and the injection of large volumes of fracking fluids at high pressure to create fractures in layers of impermeable rock to release the shale gas contained within. As a result, it has a considerably larger environmental footprint and uses greater volumes of water than conventional gas drilling and extraction methods.
In terms of benefits, various reports conclude that fracking can have positive impacts in terms of jobs and economic activity, and also that fracking can assist with the transition towards a low carbon economy. For there to be any climate benefits, however, two conditions must be met. Firstly, naturally occurring methane must be captured during the process, as methane is a potent greenhouse gas. Secondly, the gas produced must replace imported coal and gas, not lower carbon, renewable options such as onshore and offshore wind and biomass, or domestic gas supplies.
Security of energy supply
While unconventional gas has reduced gas prices in the US, it is unlikely to have as much of an impact on gas prices in Ireland and across the rest of the EU. The most significant potential economic benefit of fracking from an Irish perspective is security of energy supply.
For many, the jury is out when it comes to developing and extracting our shale gas reserves through fracking. There are a number of gaps in the Irish and EU regulatory framework at present which will need to be addressed before Ireland takes any further steps in the direction of fracking.
The EU Commission had promised a Directive on Unconventional Gas Exploration and Extraction, but at the end of January it published a Recommendation and Communication which will act as a guide to regulators and decision-makers, but is not binding legislation. The Commission has promised to keep the situation under review and introduce legislation after 18 months if it becomes necessary for the protection of the environment and human health. On 12 March 2014 the European Parliament formally dropped the requirement for mandatory Environmental Impact Assessment for all unconventional gas exploration and extraction activities, under pressure from countries such as the UK and Poland.
Domestically, Ireland has quite strict standards with regard to the requirements for Environmental Impact Assessment and Appropriate Assessment of projects which may have a significant effect on the environment and on protected habitats and species, but it is probably fair to say that the system for granting exploration licences and leases for the extraction of gas is not fit for purpose when it comes to fracking, and there are also gaps in the planning and environmental licensing processes.
Fracking is a wholly new consideration
For example, the Petroleum and Minerals Development Act 1960 has been subject to a number of amendments, but none of those amendments envisaged fracking. The impact on local landowners from fracking is far more significant than it would be under conventional methods of extraction. Rights of access to privately owned lands on the grant of a petroleum lease may be deemed unconstitutional if exercised in the manner envisaged under the 1960 Act in relation to large areas of land in private ownership. The regulatory system for the abstraction of surface and ground waters must also be updated, and must provide for charges which reflect the full economic and environmental cost of the water use.
The Environmental Protection Agency, on behalf of the Department of Environment, Community and Local Government, the Department of Communications, Energy and Natural Resources and the Northern Ireland Environment Agency are commissioning an extensive research programme on the environmental impacts of unconventional gas exploration and extraction, including identification of regulatory gaps and best environmental practices. In the meantime, a number of companies have expressed interest in securing permission to carry out exploratory drilling and extraction, assuming shale gas reserves prove commercially viable.
One of the difficulties is that, to date, there has been a lack of coherent national energy plan in which the various energy options, from oil and gas, nuclear, wind energy and other renewables, interconnection and energy efficiency are identified, described and assessed in an integrated manner against key objectives, to include security of supply, sustainability, affordability, decarbonisation, competitiveness, environmental protection and human health.
According to a new report ‘Saving water with wind energy’ published by the European Wind Energy Association in March 2014, the use of water must be factored into energy planning, with wind energy having the least impact on valuable water resources when compared with nuclear and thermal electricity generation. Energy planning must also take into account the concept of intergenerational equity, ie the impact on today’s population as well as future generations, as required under the Aarhus Convention.
The lack of a plan-led approach has led to ad hoc decision-making at a national and local level, and a lack of Strategic Environmental Assessment of the various options, in line with EU law. This in turn can lead to an information vacuum, loss of trust and anxiety on the part of the public and uncertainty for investors. The focus naturally turns to local issues, local politics, nimbyism and a lack of vision in terms of national interest.
There are a myriad of issues to be investigated and resolved before fracking could be developed in Ireland, but at some point in the very near future a choice must be made on Ireland’s energy mix. Unless we have an open and honest discussion on the limited number of choices available to us and the risks and rewards of each option, we will remain entirely at the mercy of global forces for almost all of our energy requirements.
Alice Whittaker is a partner in Philip Lee Solicitors, and head of the firm’s Environment and Climate Group. Clients include the SEAI, Irish Offshore Operators Association (oil and gas), offshore and onshore wind farm developers, biomass companies and local authorities. Follow her on Twitter @WhittakerAlice