Will Legal Action Follow French Shale Ban?
Environment Minister Nathalie Kosciusko-Morizet has confirmed that France faces the possibility of legal actions over legislation banning the exploration of hydrocarbons using the controversial technique of hydraulic fracturing.
Speaking on LCI television, Kosciusko-Morizet said: “There could be court cases.”
Legislators originally proposed the repeal of licenses already granted for shale gas and shale oil exploration. However the government argued that revocation of licenses would likely result in extensive litigation and the requirement of financial compensation. Accordingly, the draft legislation was subsequently amended on first reading by the National Assembly to prohibit only the technique of hydraulic fracturing.
Kosciusko-Morizet's comments indicate the despite the legislation being designed to “minimize legal risks,” the government is anticipating that it could “open the way” to compensation claims.
France's upper house, the Senate, recently adopted the ban, but included a critical amendment to the legislation proposed by the National Assembly, leaving the door open to hydraulic fracturing for "scientific purposes".
The adopted bill stipulates that the current holders of shale exploration permits would have two months to notify the authorities of which technique they planned to employ in extracting unconventional resources. If they were to use hydraulic fracturing (now prohibited) or did not respond within the allotted time frame, the license would be revoked.
France has already granted permits to companies including Toreador Resources Corp., Vermilion Energy Inc., Total SA and Schuepbach Energy LLC for shale oil and shale gas exploration.
Toreador, whose shares have fallen over 70 percent from their highs, did not respond to a Natural Gas for Europe request for its position on possible legal action.
Vermillion, whose permits are mostly held by existing production, commented: "We are striving to work closely with (not against) the French government in forwarding our understanding of the shale oil potential in the Paris Basin and will continue on this positive path. It remains too early in the process to determine if any legal action may be required, but it would be a path of last resort."