Prof. Dr. Alexander Roßnagel, Dr. Anja Hentschel, Andreas Polzer, LL.M., University of Kassel
The task of the law in respect of the unconventional extraction of natural gas is (1) to restrict the risks for every individual production project to an acceptable level, (2) to enable compensation to be paid in the event of risk occurrence and (3) to control the planning of every aspect as well as the infrastructure of all the production projects.
1. Risk management
The legal system contains no regulations that directly address the risks of fracking.
However, there is a clear intention expressed by several general laws, to protect ground water and drinking water (resources), as well as health and the environment in general.
Mining law encompasses not just the sub-surface facilities, but also the surface installations that are needed for mining purposes. Under the Federal Mining Act (Bundesberggesetz / BBergG) four requirements must be met: (a) The required precautionary measures must be taken against dangers to life and health and for the protection of real assets in line with the generally accepted rules of safety technology; (b) No “harmful effects”, such as changes in the quality of the ground water, must be expected; (c) No “overriding public interests must stand in the way” of the mining operations; (d) “Waste incurred during operations must be used or disposed of in a proper manner.” Requirements (b) and (c) refer to judgments in other fields of law;in case of possible degradations of the ground water,to Water Law. . In respect of ground water, this requires the avoidance of any “changes in the properties of water that are detrimental to the public good, especially the public water supply.”, Installations erected and operated above ground must comply with the provisions of the Immission Control Law for facilities that do not require official approval..These facilities must be constructed and operated in such a way that, according to the state of technical knowledge, deleterious but avoidable effects on the environment are prohibited and unavoidable effects are kept to a minimum.
In some cases these requirements have been defined more precisely in ordinances and administrative provisions. Taking due account of these, there must be a case-by-case review and assessment of whether the protection objectives stated in the legislation have been achieved. To this end a deterministic approach is adopted to examine whether plausible “predicted major accidents” can be safely handled. It is sufficient for “enveloping” accidents to be recorded. The scenarios developed and calculated in the contribution by Dr. Uth can be assumed to be predicted major accidents.
As regards surface risks, precautionary measures must be taken that satisfy the state of the art and fulfil the required protection objective. These requirements can be met by means of the redundant, diverse and stage-by-stage measures to protect against accidents that Dr. Uth called for in his contribution. Short and long-term precautionary measures must be provided for to limit any damage. As a precaution no drilling should take place in trinking water conservation areas.
To avert sub-surface risks the cap rock, which serves as a protective zone for layers carrying ground water, must be sufficiently thick and watertight and not have any continuous and permeable fault zones. Redundant protective layers must seal the wellbore off from the layers carrying ground water. Here, too, precautionary measures must be in place to limit any damage.
The lack of any Environmental Impact Assessment (Umweltverträglichkeitsprüfung) and the non-involvement of the general public are detrimental facts for a consideration and assessment of the risks. The stage-by-stage nature of the decision-making procedures means that the key risks are often only reviewed after several positive decisions have been taken and investments made.
2. Compensation for damage
Compensation claims for damage to individual objects of legal protection can be lodged under the Federal Mining Act (BBergG), for damage by water pollution under the Water Resources Act (Wasserhaushaltsgesetz) and for damage to environmental goods under the Environmental Damage Act (Umweltschadensgesetz). All three acts provide grounds for liability regardless of fault. However, the injured party must prove that the damage was caused by the gas production company. In reality it is extremely difficult to furnish such proof. Clarification of causality is alleviated if monitoring measures are carried out on the condition of houses and ground water catchments that might be affected. Section 120 of the Federal Mining Act provides for presumption of damage caused by mining operations as a means of easing the burden of proof. However, there is some controversy as to whether this is limited to the underground exploration and extraction of mineral resources or whether it also applies to the exploration and extraction of natural gas. A neutral board of arbitration should be set up to avoid any long drawn-out court proceedings and to provide injured parties with a risk-free assessment of their claim.
In Germany, the Mining Damage Compensation Fund (Bergschadensausfallkasse) pays for any possible claims in the event of a corporate insolvency. Consideration should be given to whether provision for sufficient cover should be introduced. Personal liability insurance generally provides insurance cover as “basic liability” for personal injuries and damage to property. However, it is “standard practice” for mining damage to be excluded from insurance cover. Cover against ground water damage must be provided by means of environmental liability insurance. In all cases there must be a very precise description of the risk. Hazard scenarios, for instance, must provide unambiguous information if insurance cover is to be provided.
3. Planned control of the overall effects
A large-scale extraction area with hundreds of well sites and the connecting infrastructure comprising processing plants, production and waste water pipelines and roads has a considerable spatial impact on the economic and settlement structure, the landscape and nature conservation. If conservation areas, nature reserves and water protection areas are already designated as such, they provide the areas concerned with fundamental protection against any such uses. This protection may only be contravened in exceptional circumstances. To avoid or reduce negative impacts caused by huge, uncoordinated projects on other undeveloped land, planning must be carried out on various levels at an early stage to ensure that allocation of the space for competing purposes rests on clear political priorities. This can be achieved by having a clear designation in state, regional and development planning of areas in which unconventional gas extraction is undertaken, to be made possible or prevented. A sub-regional ‘gas extraction’ plan would be suitable for this purpose.
