On 9 October 2013, the European Parliament narrowly voted in favour of an amendment to the EU's Environmental Impact Assessment Directive (EIA Directive) which would require environmental impact assessments (EIAs) to be performed for hydraulic fracturing for coal bed methane, and in shale and formations with shale-like permeability and porosity. If the amendment becomes law, the amended EIA Directive would require all private and public shale gas and many other unconventional exploration projects involving hydraulic fracturing in the EU to undertake an EIA. The effect of this change would be to remove the discretion that EU Member States currently have as to whether or not to require a full EIA as part of the permitting process for certain projects. A full EIA can take up to a year to complete and can be costly. However, EIAs provide a thorough and detailed survey of the aspects of the environment that are likely to be significantly affected by the relevant activity, enabling informed assessments to be made during the permitting process and in respect of the project generally. Current EU law Currently, under the EIA Directive, an EIA is mandatory in the EU for projects listed in Annex I of the Directive. In relation to oil and gas projects, Annex I provides that an EIA is required for projects involving the extraction of petroleum and natural gas for commercial purposes where the amount extracted exceeds 500 tonnes/day in the case of petroleum and 500,000 m³/day in the case of gas. Annex II of the EIA Directive lists other types of projects which must be subject to an EIA if it is determined, either on a case-by-case examination or on the basis of thresholds and criteria set by the relevant EU Member State, that they are likely to have significant effects on the environment. Those include matters such a deep drilling and surface industrial installations for the extraction of coal, petroleum, natural gas and ores, as well as bituminous shale. The amendment The proposed amendment adopted by the European Parliament amends Annex I by providing that the following activities require an EIA: "14a. Exploration, limited to the phase involving the application of hydraulic fracturing, and extraction of crude oil and/or natural gas trapped in gas-bearing strata of shale or in other sedimentary rock formations of equal or lesser permeability and porosity, regardless of the amount extracted. 14b. Exploration, limited to the phase involving the application of hydraulic fracturing, and extraction of natural gas from coal beds, regardless of the amount extracted." The effect of this amendment is that it removes the discretion that EU Member States currently enjoy as to whether or not to require an EIA for such activities that fall below the 500 tonnes/day (for petroleum) or 500,000 m³/day (for gas) thresholds. If this amendment becomes law, all EU exploration activities involving hydraulic fracturing (including private and public projects and including both vertical and horizontal wells) falling within these new paragraphs 14a and 14b of Annex I will require an EIA. When might it become law? The EIA Directive was originally adopted following the EU's ordinary legislative procedure, i.e. by a co-decision of the European Parliament and the Council of the European Union. As a consequence and following the European Parliament's approval, the amendment to the EIA Directive now requires the approval of the Council of the European Union before it can become law. Should the amendment become binding EU law, each EU Member State will have a certain period of time to implement the amendment into their national legislative frameworks. There is currently no fixed timeframe for the Council to consider and vote on the amendment but the Member of European Parliament (MEP) with the mandate to enter into discussions with the Council and Commission in respect of the amendment has said that he hopes the amended EIA Directive will be in force by 2016. The U.K. The U.K. has large shale resources but the development of those resources is in its infancy. The U.K. Government is committed to encouraging the establishment of a shale gas industry in the U.K. It is doing so through tax incentives and seeking to streamline the permitting process. The Government has established an Office of Unconventional Gas and Oil which states that its aim is to "promote the safe, responsible, and environmentally sound recovery of the U.K.'s unconventional reserves of gas and oil". Current EU law is implemented in respect of onshore activities in the U.K. by various statutes including The Town and Country Planning (Environmental Impact Assessment) Regulations 2011 and The Town and Country Planning (Environmental Impact Assessment) (Scotland) Regulations 2011 which apply to England and Scotland respectively (there are differences which apply to Wales and Northern Ireland, although the regulations are substantially the same). The regulations set out the types of activities which require EIAs in the U.K. There are two separate categories:
- "Schedule 1 development," for which EIAs are mandatory; and
- "Schedule 2 development," for which EIAs are only mandatory if the particular project is considered likely to give rise to significant effects on the environment by virtue of factors such as its nature, size, or location (i.e. if it is located in a "sensitive area").