Developments in Unconventional Gasregulation in FranceJanuary 2012
Fracking is currently banned in France due to significantpublic and political opposition, removing the opportunityfor shal...
There are outstanding issues to be resolved which willsignificantly affect the future of shale gas in France              ...
Content• Overview of Regulatory Process• French Administrative Structure• Process for License Award• Taxes and Charges• Pi...
There are many institutions involved in license decision making                     Copyright © 2012 by Strategic Fit. All...
French Administrative Structure                   Copyright © 2012 by Strategic Fit. All rights reserved.   6
Exploration Permit allocation is dependent on national and local bodies                       Copyright © 2012 by Strategi...
Drilling permits must be acquired in addition toexploration or production licenses                   Copyright © 2012 by S...
Agreement must be reached with the owner of the surfacefor production but the State can intervene                 Copyrigh...
Pipeline approval is split based upon the size of the projectand the state can force through pipelines in the public inter...
Taxes must be paid nationally and locally dependent onthe quantity of gas produced                  Copyright © 2012 by St...
National Pipelines in France are operated by two companies butlegislation ensures tariffs are uniformly set for all operat...
Households can choose to receive gas either at a regulatedor free market rate                   Copyright © 2012 by Strate...
In July 2011 legislation was passed explicitly banning hydraulicfracking and rescinding licenses based on this technology ...
Example Cases- Montelimar License previously held by Total                   Copyright © 2012 by Strategic Fit. All rights...
Route of Appeal for Total has several levelsIn France there is a system of “Civil Law” as opposed to the “Common Law” inUS...
An appeal against administrative decisions by the central    government would likely be decided by the Council of State•  ...
There were strong reactions from industry to the Government’sdecision to implement a Fracking ban and repeal licensesChris...
We have extensive experience helping clients withunconventional resource plays.                  Copyright © 2012 by Strat...
For further information, please contact:Adam Mitchell                        Duncan John+44 7876 243 480                  ...
Upcoming SlideShare
Loading in …5
×

StrategicFit - French unconventionals regulation

1,309 views
1,235 views

Published on

StrategicFIt has written the following presentation in response to unconventional gas regulation in France. It provides insight into the recent fracking ban, the structure of relevant regulations and the process for engaging with regulators.

The presentation has been updated following Total's announcement on January 19th 2012 to appeal against the withdrawal of its permit to explore and excavate shale gas in France.

Published in: Business, Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,309
On SlideShare
0
From Embeds
0
Number of Embeds
11
Actions
Shares
0
Downloads
39
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

StrategicFit - French unconventionals regulation

  1. 1. Developments in Unconventional Gasregulation in FranceJanuary 2012
  2. 2. Fracking is currently banned in France due to significantpublic and political opposition, removing the opportunityfor shale gas production• The award of exploration and production licenses is carried out by the Ministry of Ecology, Energy and Sustainable Development with advice from many other local and central bodies.• In addition a drilling permit is required from local authorities and land access agreements must be made with surface owners.• 2011 has seen a complete ban on hydraulic Fracking and rescinding of 3 licenses with Fracking production plans.• An appeal was launched in January 2012 against the removal of one of the licenses by Total.• There is no outright ban on the exploitation of Shale Gas and the importance of it as a resource is recognised however there are not alternative extraction technologies currently available. Copyright © 2012 by Strategic Fit. All rights reserved. 2
  3. 3. There are outstanding issues to be resolved which willsignificantly affect the future of shale gas in France Copyright © 2012 by Strategic Fit. All rights reserved. 3
  4. 4. Content• Overview of Regulatory Process• French Administrative Structure• Process for License Award• Taxes and Charges• Pipeline access• Fracking Guidelines• Example Case - Montelimar License• Legal Structure Copyright © 2012 by Strategic Fit. All rights reserved. 4
  5. 5. There are many institutions involved in license decision making Copyright © 2012 by Strategic Fit. All rights reserved. 5
  6. 6. French Administrative Structure Copyright © 2012 by Strategic Fit. All rights reserved. 6
  7. 7. Exploration Permit allocation is dependent on national and local bodies Copyright © 2012 by Strategic Fit. All rights reserved. 7
  8. 8. Drilling permits must be acquired in addition toexploration or production licenses Copyright © 2012 by Strategic Fit. All rights reserved. 8
  9. 9. Agreement must be reached with the owner of the surfacefor production but the State can intervene Copyright © 2012 by Strategic Fit. All rights reserved. 9
  10. 10. Pipeline approval is split based upon the size of the projectand the state can force through pipelines in the public interest Routes to Access Land for Construction, Infrastructure and transportation of Gas • Construction of a pipeline requires authorisation. For the largest pipelines this involves Ministerial approval, for smaller pipelines then approval can be granted by Prefects. • Approval is subject to meeting conditions relating to: o technical and financial capacities o safety (all aspects including workers) o protection of the environment o compatibility of projects by following principles and missions of public service • Owners of land which is crossed by gas transportation or distribution pipelines can be required to allow construction of pipelines as a public utility. Further they must not hinder the usage and maintenance of the pipeline. • Currently GRTgaz and TIGF are the managers of the distribution network. Copyright © 2012 by Strategic Fit. All rights reserved. 10
  11. 11. Taxes must be paid nationally and locally dependent onthe quantity of gas produced Copyright © 2012 by Strategic Fit. All rights reserved. 11
  12. 12. National Pipelines in France are operated by two companies butlegislation ensures tariffs are uniformly set for all operators Copyright © 2012 by Strategic Fit. All rights reserved. 12
  13. 13. Households can choose to receive gas either at a regulatedor free market rate Copyright © 2012 by Strategic Fit. All rights reserved. 13
  14. 14. In July 2011 legislation was passed explicitly banning hydraulicfracking and rescinding licenses based on this technology Copyright © 2012 by Strategic Fit. All rights reserved. 14
  15. 15. Example Cases- Montelimar License previously held by Total Copyright © 2012 by Strategic Fit. All rights reserved. 15
  16. 16. Route of Appeal for Total has several levelsIn France there is a system of “Civil Law” as opposed to the “Common Law” inUSA and UK. Copyright © 2012 by Strategic Fit. All rights reserved. 16
  17. 17. An appeal against administrative decisions by the central government would likely be decided by the Council of State• Any appeal would likely need to be made to the Conseil D’Etat (Council of State).• The Conseil D’Etat will determine if the government decisions comply with higher sources of law: o The constitution o Higher administrative decisions o the general principles of law o Statutory law o International treaties and conventions• The Conseil D’Etat does not have jurisdiction over acts relating to French Foreign Policy and acts relating to the relationship between the Government and the Legislative branch.• An appeal is initiated by a statement of claim detailing the factual background and the appellant outlining their case.• A formal investigation is then begun with the Government branch giving a statement of defence.• Judgement is made by a sous-section (under department) in small cases however for larger important cases this may be passed up to a section or in very large cases (10 per year) the Assemblée du contentieux (administrative claims assembly) Copyright © 2012 by Strategic Fit. All rights reserved. 17
  18. 18. There were strong reactions from industry to the Government’sdecision to implement a Fracking ban and repeal licensesChristophe De Margerie, Total CEO: “We are surprised and want to see what the real legal reasonsfor stopping this permit [are]. Did we anticipate such a move? No. We did not anticipate it wouldbe such a big event. Everybody knows the way we work.”Bruno Courme, MD Total Europe announcing the appeal against the repeal of licenses: “Our positionis that the law does not justify the withdrawal of our permits.”Gerard Mestrallet, CEO of GDF after the ban was implemented (Note: GDF did not lose any licenses inthe ban): “There are concerns about the environmental impact [of Fracking]. Probably it can beimproved and probably it has to be improved.“Craig McKenzie, President and CEO of Toreador stated Fracking was not needed for evaluation ofexploration licenses but did not comment on production: "It is important to note that our plan toevaluate our exploration licenses does not call for hydraulic fracturing. We will not conducthydraulic fracturing operations within any of our permit areas”President Sarkosy outlined the thought process behind the ban : “Development of hydrocarbonresources underground is strategic for our country but not at any price…[development wouldcome] at the price of fragmenting the soil that would massacre the almost spiritual scenery”Budget Minister Valerie Pecresse seemed to offer a conflicting message after revoking Total’s license:“We had to cancel the permits but research must continue. All big developed countries are tryingto find non-polluting technologies to develop this incredible resource.” Copyright © 2012 by Strategic Fit. All rights reserved. 18
  19. 19. We have extensive experience helping clients withunconventional resource plays. Copyright © 2012 by Strategic Fit. All rights reserved. 19
  20. 20. For further information, please contact:Adam Mitchell Duncan John+44 7876 243 480 +44 7771 562 500amitchell@strategicfit.co.uk djohn@strategicfit.co.uk www.strategicfit.co.uk Simply Insightful

×