Shale gas and other hydrocarbons

Unconventional hydrocarbons are resources found in reservoirs with geological characteristics and locations different from those where oil and gas are usually produced. They include natural gas from shale formations (shale gas), natural gas from coal seams (coalbed methane), crude oil from shale formations or other formations with low permeability (tight oil or shale oil).

Extraction and fracking

Unconventional hydrocarbons can contribute to the EU’s security of supply and competitiveness. There are however public concerns over their extraction since it is generally more difficult than extracting from conventional sources. 

The extraction of shale gas, for instance, requires the drilling of additional wells and is using techniques such as hydraulic fracturing, also called “fracking”. It opens up fissures in the  rock by using large quantities of water under high pressure, mixed with sand and other additives in order to release the gas. The EU is working to ensure that such extraction is done with proper environmental and climate safeguards.

EU countries have adopted different policies towards shale gas, ranging from the banning of hydraulic fracturing in France and Bulgaria to explanatory drillings and hydraulic fracturing tests in Poland. Although some countries have previously expressed a strong interest in exploring shale gas resources, the United Kingdom is the only country in Europe where companies pursue such efforts. 

Future potential

Shale gas is widely considered to be the unconventional fossil fuel with the greatest development potential in Europe. To further explore, the European Commission and the Geological Surveys of Europe conducted a pan-European assessment, which also included Ukraine, of unconventional gas and oil resources.

The project, called the European Unconventional Oil and Gas Assessment (EUOGA), took place from September 2015 to March 2017. By identifying and bridging gaps from previous assessments, the project provides a broad European scale of basin-by-basin resource potential to help make informed decisions at the social, political and industrial level.

A key result from the EUOGA project shows that estimates of shale gas resources amounts to 89 trillion cube meters. The corresponding estimate for shale oil is set to 31 billion barrels. The researchers used a so-called P50 estimate to determine these estimates. P50 is a median value that indicates at least 50% probability that the existing resources would be equal to or exceeds the best estimate.

Shale gas has not been widely used for commercial purposes in the EU, so it is uncertain how much of the estimated resources can be recovered. The Joint Research Centre (JRC) published a full report on the resource assessment of shale gas and shale oil in February 2017, within the framework of the project.

Environment and climate concerns

The European Commission is committed to the environmental integrity of unconventional hydrocarbons, and has undertaken a series of measures to ensure that extraction is done in a safe, responsible and environmentally friendly way.

In January 2014, the Commission issued recommendations  for EU countries when creating or adapting legislation related to hydraulic fracturing. The recommendations were accompanied by a communication outlining opportunities and challenges stemming from shale gas extraction in Europe and an impact assessment on the socio-economic and environmental impacts. 

To further address concerns, the European science and technology network on unconventional hydrocarbons was established in 2014 to collect, analyse and review results from shale gas exploration projects in the EU, including the development of technologies used in unconventional oil and gas projects. The network concluded its work in 2016.

Guidance on hydrocarbons 

In February 2019, the Commission published a guidance document on hydrocarbons. It includes 13 onshore and 10 offshore activities of the oil and gas extracting sector that have the potentially highest impact on the environment and human health. The documents identifies best practices that can help organisations engaged in hydrocarbon activities and guide regulatory/permitting authorities.  

Oil refining in EU

Refineries process crude oils into finished products by breaking them down into their components and selectively reconfigurating them into new products, such as fuels and lubricants for automotive, ship, and aircraft engines. Refining by-products can also be used in petrochemical processes to form materials, such as plastics and foams.

According to the BP Statistical Review of World Energy 2018, the EU has a refining capacity of more than 14 million barrels a day, representing around 14% of the total global capacities, implying that the EU is the third largest refining market after the US and China.

EU Refining Forum

The EU Refining Forum discusses planned regulatory proposals which may impact the refining industry and the EU’s secure supply of petroleum products. It brings together representatives from the industry, EU countries, the European Parliament, and the European Commission, as well as other stakeholders.

The forum was created in 2013 and it is a key follow up to the previously held EU refining roundtable. 

EU Refining fitness check

As part of its better regulation policy the Commission initiated a programme for Regulatory Fitness and Performance (REFIT) in 2012. This is a continuous process, affecting the whole policy cycle – from the design of a piece of legislation to implementation, enforcement, evaluation and, where justified, revision.

One of the actions possible under REFIT is a ‘Fitness Check’ which provides an evidence-based critical analysis of whether EU actions are proportionate to their objectives and delivering as expected. A fitness check pays particular attention to identifying any synergies (e.g. improved performance, simplification, lower costs, reduced burdens) or inefficiencies (e.g. excessive burdens, overlaps, gaps, inconsistencies and/or obsolete measures) within the group of measures which may have appeared over time, and help to identify the cumulative impact of the interventions covered, covering both costs and benefits. The oil refining fitness check evaluated how the EU petroleum refining sector is affected by ten of the most relevant pieces of EU legislation in the fields of environment, climate action, taxation and energy. The analysis covered a wide range of important aspects including five key evaluation criteria (effectiveness, efficiency, coherence, relevance and EU added value). Consideration was also given to the sector’s competitiveness position from 2000 to 2012 and issues, such as excessive regulatory burden, overlaps, gaps inconsistencies or obsolete measures.

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