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Spain sees new Fracking law take effect tomorrow

Source: Bloomberg - Wed 30th Oct 2013
Spain sees new Fracking law take effect tomorrow

Spain's government set local ground rules for oil and gas drillers to use hydraulic fracturing, or fracking, in an effort to spur shale-exploration projects by endorsing the contested technology that they need.

The 1998 law on oil exploration was changed to specifically include the water-intensive drilling technique in new legislation published today. The measure also modified a 2006 law so that fracking projects nationwide must meet environmental-impact rules. That means they will be scrutinized for potential impacts on aquifers to air quality.

Spain is one of Europe's most energy-poor nations, importing about 99% of its oil and gas needs. While its traditional fields are few with scant output, the advent of finding fossil fuels using fracking technology has sparked interest by drillers from Spain's Repsol to San Leon Energy Plc of Dublin and Heyco Energy Group Inc. of Texas.

"Now, if a regional government prohibits fracking, that would be in conflict with this national law," Abel La Calle, an environmental lawyer and professor based in Almeria, Spain, said in an interview. "Previously you could only imply that fracking was permissible. Now it's expressly legitimized."

The changes give more legal certainty to exploration companies, said an official of one of their industry groups, Shale Gas Espana, who spoke on condition of anonymity as more senior officials weren't available to comment.

70 Licenses

There have been 70 licenses given to explore for oil and gas, according to Shale Gas Espana. The energy companies aren't required to disclose whether they are looking into shale or only at conventional hydrocarbon deposits. Much of the most sought-after shale deposits are north in or near the Basque region.

The national government announced months ago that the rule changes were being drawn up. They were included today in a law that was largely devoted to supplying electricity to Spain's Canary and Balearic islands. The law becomes effective tomorrow.

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