France Follows Through With Draft Ban from 2040
France's ecology minister Nicolas Hulot presented his draft law to cabinet on September 6 to ban petroleum production in France from 2040.
The draft puts flesh on the announcement he made July 6 to halt all oil and gas production on French soil by 2040, including in its overseas territories. Existing oil and gas production concessions would not be renewable beyond 2040. The draft needs to go before the French parliament, but most deputies there belong to the political party of the president Emmanuel Macron, who is Hulot's boss.
A statement from France's ministry for ecological and sustainable transition said that the first priority of the bill is therefore to halt the search for hydrocarbons, and that no new hydrocarbon exploration permits will be issued as soon as the law is published.
Existing operating concessions would not be renewable beyond 2040, putting a limit on production operations. It said the situation of many requests put on hold by the previous government will be clarified: new exploration permits may be refused, but legally acquired rights will be respected while complying with the new objective of ending renewals in 2040. It added that no shale gas development or production will be possible in France.
The ministry said that ending oil and gas production in France by 2040 is consistent with its objective of reducing the consumption of fossil fuels by 30% by 2030, with a view to achieving carbon neutrality by 2050.
Less than 1% of French oil and gas supply is produced in the country, and imports will be permitted post-2040. However the ban from 2040 could impact Total, which has offshore licences in French Guyana, and particularly smaller producers like Canada's Vermilion Energy active in France, and coalbed methane (CBM) pioneer La Francaise de l'Energie which this year began producing CBM with 'green gas' production subsidies from the government.
The draft law also contains miscellaneous provisions, including rules to “allow regulation of underground gas storage infrastructure to better guarantee gas availability in the winter.” This may be a response to the limited storage capacity, especially in southern France, which led to extremely high spot gas prices in that region in December 2016/January 2017 after LNG imports from Algeria were disrupted by an outage there.
Mark Smedley