Hydraulic Fracking Blog: Spain

On December 11, 2013, the Spanish government amended its environmental rules to address the development of shale resources and to limit the environmental review process to six months. Spain’s review process often took three, four or five years to complete a final environmental impact statement. With the shortening of the review process period to six months (four months for review, with the possibility for a two-month extension), Spain hopes to encourage energy companies to develop its resources. While not endorsing hydraulic fracturing, the central government sends a signal that it is willing to consider the process in an objective, timely, and efficient manner. A request for hydraulic fracturing must meet standard review demands, which is the same level of scrutiny given to nuclear power plants.

Hydraulic fracturing is not without criticism in Spain. The shale-rich region of Cantabria banned hydraulic fracturing in April 2013, stating concerns about earthquakes and water contamination. But, with the country’s severe economic downturn marked by high unemployment and the fact that Spain imports more than three-quarters of its energy needs, the central government wants to encourage shale gas development to boost its economy and to decrease its reliance on foreign sources of fuel.

This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.

Earlier today, in an unanimous vote and supported by a strong social movement, lawmakers in Spain’s northern Cantabria region voted to ban hydraulic fracturing on environmental concerns about risks to drinking water. A coalition of Spain’s three parties led by the majority ruling People’s Party joined forces to pass the ban. While the People’s Party in Cantabria favors the complete ban of hydraulic fracturing in the region, due to local citizens’ concerns, on the national level this party supports hydraulic fracturing, believing that the development of shale gas would transform Spain’s economy at a time when the country is struggling with a burgeoning debt, a deep rescission, and high unemployment. Spain also imports 76% of its energy needs The People’s Party could seek to appeal or overturn Cantabria’s ban at the Spanish Parliament level. Early estimates indicate that Spain has large shale gas reserves (1.4 trillion cubic meters), enough to cover the demand from the European Union for about three years.

This post was prepared by Barclay Nicholson (bnicholson@fulbright.com or 713 651 3662) from Fulbright's Energy Practice.