By Don Quijones, Spain & Mexico, editor at WOLF STREET.
In Europe these days, the pace of legislative change is dizzying, as Brussels continues its blitz-like power grab. Last year saw the birth of the banking union. This year, it’s Energy Union. With the European Commission determined to push through an ambitious consolidation of the continent’s disparate energy sectors, the coming months and years promise to be highly lucrative for energy lobbyists – particularly those representing the fracking industry.
For the public, the Commission talks up Europe’s renewable energy credentials. Behind the scenes, it is teasing open the back door to fracking, despite overwhelming public opposition across Europe.
This is the finding of a new report on the European Science and Technology Network on Unconventional Hydrocarbon Extraction, otherwise known as “The Network.” The study was published jointly by Corporate Europe Observatory (CEO) and Friends of the Earth.
The Commission launched the Network in 2014 with the official aim of “bringing together all relevant stakeholders (practitioners from industry, research, academic as well as civil society) to foster a common understanding on unconventional hydrocarbons.” A closer look, however, reveals the Network as a Commission-funded lobby vehicle whose ultimate aim is to drive the industry’s expansion across Europe.
The Fracking Revolution Crosses the Atlantic
As the Guardian recently reported, America’s shale revolution has had a huge impact not only at home but far beyond U.S. shores, including by providing a bonanza for the fracking lobbies in Brussels:
From shale to climate-change policies, from car exhaust rules to renewables, from carbon-capture technologies to carbon-trading schemes, the energy lobby is highly active and successful in Brussels, with companies such as BP and Shell maintaining big operations aimed at shaping policy.
“In a nutshell, the energy-intensive lobbies say they are not competitive, especially vis-a-vis the US, because of shale and the low prices there,” says an industry insider engaged in Brussels lobbying. “They argue that we’re much too focused on renewables and climate change and that we should be much more open [to fracking] like the US.”
The creation of the Network is a far from subtle attempt to promote that agenda. Of the non-European Commission members, fewer than 10% represent civil society, while 40% work directly for the fracking industry – Shell, Total, ExxonMobil, GDF Suez, PGNiG, Encana and Cuadrilla. Another 45% of Network members represent academic and research institutes, of which two-thirds have worked closely with the fracking industry. For example, Susan Sakmar from the University of Houston started her professional career with Chevron and as an academic speaks at multiple industry conferences promoting shale gas, including on topics such as “How Do You Overcome Public Concerns [Over Shale Gas]?”
Of the Network’s five carefully selected working group chairs, two work directly for the fracking industry (Cuadrilla, ConocoPhillips), another two are from pro-fracking governments (UK and Poland), while the last chair represents a fracking industry-friendly body (IFP Energies Nouvelles).
In other words, it’s a classic Brussels stitch-up. The Network’s findings are already a forgone conclusion. In fact they were probably written years ago. Fracking, it will no doubt claim, is just what an energy-dependent and insecure Europe needs to lift itself from the doldrums.
With the Commission’s official stamp of approval, fracking will be foisted upon EU member states, including even countries that have banned the practice such as France and Romania. Indeed, if the transatlantic trade agreement TTIP is signed in its current form, any country that refuses to allow energy companies to frack could end up being sued for lost profits in corporate-friendly arbitration trials.
A PR Exercise
Naturally, the Network’s findings will be couched in terms that are suitable for public consumption. There will be a great deal of talk about the need for energy security – especially with a new Cold War brewing on the Eastern Front. Meanwhile fracking’s potential side effects (poisoned water, polluted air, increased earthquake activity) will be given somewhat less attention. The Network could take a leaf out of a recent report published by the European Academies Science Advisory Council (EASAC), which passionately defended the industry’s safety record in Europe, in particular in Germany where “no hydraulic fracturing is allowed without prior proof of the technical integrity of the well.”
The Network will no doubt ignore a recent study by the Energy Watch Group that warned that the environmental impact of shale gas extraction in Germany and Europe are in no way proportionate to the raw materials gained using this method of drilling. “We should not compare the conditions in Germany with those in the United States,” said Werner Zittel, the author of the study. For one thing, Germany is much more densely populated, he said, increasing the risk for people and the environment near extraction sites.
Nor is the Network likely to dwell on recent revelations that geological conditions and other factors in Europe make fracking more arduous and expensive than in the U.S. And just as had happened in the U.S., assessments provided by the Energy Information Administration had grossly overestimated deposits in Europe. In Poland, for example, the recoverable shale gas estimate recently shrank from 187 trillion cubic feet to 1.3 trillion cubic feet, a 99% drop. To make matters worse, one industry study estimated that drilling shale gas in Poland would cost three times what it does in the United States.
Even in the U.S., where geological and demographic conditions are much more favorable for fracking, the shale gas revolution would have been unthinkable without the help of absurdly cheap debt. As WOLF STREET has consistently warned, without high oil and gas prices, the ability to service that debt collapses – as is now happening across the industry.
A Lobbyist’s Paradise
In a 2013 EU study canvassing popular opinions on fracking, over four-fifths of respondents from France and over half of those in Germany said that unconventional fossil fuels – which include shale gas and oil – should not be developed under any circumstances. In a survey in the UK, a staggering 99% of some 40,000 respondents objected to fracking. Their concerns are understandable: most of Europe has a much higher population density than the United States, which means that fracking would likely take place much closer to population centers.
What’s more, as I reported last year in an article on fracking in the UK, most Europeans do not own the mineral rights to their land and would not get a single cent of compensation.
Given the scale and intensity of public opposition, it’s perhaps no wonder the Commission is adopting a softly-softly approach to new legislation.
In today’s Europe it is the lobbyists who matter. In Brussels, there are at least 30,000 of them, neatly matching the 31,000 staff employed by the European Commission, making it second only to Washington in the concentration of those seeking to affect legislation (read: Full Steam Ahead for the EU Gravy Train). By some estimates, lobbyists influence 75% of legislation. Many are former MEPs or commissioners. In Brussels’ cheap imitation of democracy, it is they and the masters they serve who rule the roost. And their wish — no matter how insane or unpopular — is the Commission’s command and soon our reality. By Don Quijones, Raging Bull-Shit.
Launched to conceal the rising tide of a different type of toxic matter, namely triple-F rated financial junk, “bad banks” are suddenly hot. Read… “Bad Bank” Mania Spreads in Europe
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