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Spain’s fracking plans called into question

03 July 2017

The Basque Country and Cantabria regions in the north of Spain contain a shale gas supply potential equal to 70 years of consumption, according to a 2013 report commissioned by the Spanish Association of Hydrocarbon Research, Exploration and Production (ACIEP). A number of companies became involved in early efforts to develop these resources, but low gas prices and strong local opposition have thwarted those plans.

Stock image
Stock image

At the beginning of the decade, the conservative government in power at the time - the Popular Party (PP) – was strongly supportive of efforts to create a shale gas industry. At a time when domestic hydrocarbon production was declining, exploiting these reserves by hydraulic fracturing - fracking - was seen as a way to counter the decline.

The potential value of shale gas reserves in Spain was put at €700 billion, according to ACIEP, and five companies set up a pro-fracking lobby group called Shale Gas España: BNK; Heyco; R2 Energy; San Leon and Sociedad de Hidrocarburos de Euskadi (SHESA).

But increasing opposition to fracking amongst environmental groups found fertile ground among the populations where exploitation would have taken place and despite government support, several regional assemblies, including those of Cantabria and the Basque Country, supported anti-fracking regulations. This included legislation that places such high environmental demands on operators that most shale projects would be non-viable.

But in a rare victory for the industry, in June Spain’s Constitutional Court threw out a law against fracking in the northern region of Cantabria, saying the matter was up to the central government.

In March 2016, with the PP no longer in a majority position, congressional groups presented an initiative calling on the government to ban the practice. By then, companies were already pulling out of Spain, partly because of a global drop in gas and oil prices.

SHESA , a public corporation owned by the Basque government, has ceded one of its five licenses, covering fracking rights on a section of land known as Angosto 1 and extending over Cantabria, the Basque Country and the region of Castilla y León. It has four other licenses, but plans to use conventional techniques there.

Of the other companies, BNK gave up on its two licenses in 2016, and San Leon did the same with its six. When the PP lost control over the regional government of Valencia in 2015, R2 Energy announced it would not use fracking under its three licenses there. And Heyco was working in association with SHESA.

With a lack of success in Poland due mainly to geological problems, this leaves the UK as the only EU country still interested in developing large scale shale gas resources via fracking.

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