Global Fracking Resources
The Scandinavian Alum Shale underlies large portions of Sweden, Denmark, and potentially Norway.1
However, a majority of the Alum Shale is “shallow, thin, and immature.”2 The Alum Shale is normally pressured and is characterized by moderately high clay content and structural complexity, making it a “high risk play.”3 The Energy Information Administration estimates that the Alum Shale formation contains 49 trillion cubic feet (Tcf) risked shale gas in place, with 10 Tcf as the risked, technically recoverable shale gas in Sweden.4
USEIA Report at XIII-37.
Shale gas exploration efforts to date have been primarily focused on the southern part of the Alum Shale, namely in Skåne and south central Sweden.5 The Swedish government granted permission for shale gas prospecting and test-drilling as early as 2008.6 By December 2012, the government had issued seventeen permits for shale gas exploration activities in the Alum Shale.7 However, as the first exploration efforts came to completion in 2011, operators found the reserves to be limited, concluding that production would not be economically viable.8
Beyond the limited reserves, other factors make significant shale gas activities unlikely in Sweden. For example:
- The country’s energy mix includes a limited amount of gas – less than 40 billion cubic feet per year, representing a mere 3.5 percent of the total energy mix in 2012.9
- Sweden’s electricity mix is cleaner than most other countries with approximately 40 percent of the electricity generation provided by nuclear power and the remaining 60 percent by renewables (primarily hydropower).10
- Sweden already gets about two-thirds of its electricity generation from renewable sources, and recently announced additional support for renewable energy, with the ultimate goal of being fossil-fuel free.11
Consequently, there is little need or incentive for Sweden to develop its relatively small shale gas deposits. Moreover, there is a significant anti fracking movement in Sweden. Certain of these groups were founded as early as 2009, and many such groups united to petition the Swedish courts to overturn an early exploration license granted to Shell by the Swedish government.12 Although this petition was unsuccessful,13 a similar scenario may occur in relation to future licenses. Moreover, these groups have sought amendments to Sweden’s Minerals Act that would give municipalities and land owners veto over future shale activities.14
Statutory and Regulatory Framework
Currently, the Minerals Act is the primary law on minerals and hydrocarbons, including permitting and concessions.15 The Mining Inspectorate of Sweden is the official body responsible for deciding matters falling under the Minerals Act, including issuing permits for exploration and mining.16 The Minerals Act bars exploration and exploitation activities in certain areas, such as national parks, churchyards, and certain mountainous areas; the Minerals Act also includes setbacks for such activities from other areas, such as public roads, airports, inhabited buildings, churches, hospitals, schools, hotels, and industrial facilities.17 Anecdotally, operators in Sweden have reported that obtaining a permit to drill is a very straightforward process; for example, one company reported applying for and receiving a permit for shale gas exploration activities in two months.18 There are no restrictions to foreigners obtaining exploration permits and exploitation concessions.19 In addition to permitting obligations, the Minerals Act imposes specific requirements related to access to technical expertise and financial resources.20
Sweden’s Environmental Code, its Planning and Building Act, and its Act concerning Cultural Heritage Management are also applicable to shale gas exploration and extraction.21 For example, in order to comply with the Environmental Code, an Environmental Impact Assessment must be contained in any application for an exploitation concession.22
1 U.S. ENERGY INFORMATION ADMINISTRATION, TECHNICALLY RECOVERABLE SHALE OIL AND SHALE GAS RESOURCES: AN ASSESSMENT OF 137 SHALE FORMATIONS IN 41 COUNTRIES OUTSIDE THE UNITED STATES XXX-33 (Updated June 13, 2013) [hereinafter USEIA REPORT], http://www.eia.gov/analysis/studies/worldshalegas/pdf/fullreport.pdf.
3 Id. at XIII-38.
5 Shale Gas, GEOLOGICAL SURVEY OF SWEDEN [hereinafter GSS Shale Gas], http://www.sgu.se/en/physical-planning/energy/shale-gas/.
6 Shell Completes Drilling Sweden’s First Shale Gas Exploration Well, NATURAL GAS EUROPE (Feb. 9, 2010), http://www.naturalgaseurope.com/shell-completes-drilling-swedens-first-shale-gas-exploration-well.
7 GSS Shale Gas, supra note 5.
8 Andrew Turley, European Fracking Boom ‘Doubtful,’ ROYAL SOCIETY OF CHEMISTRY (Oct. 18, 2011), http://www.rsc.org/chemistryworld/News/2011/October/18101102.asp; GSS Shale Gas, supra note 5.
9 An Overview of the Swedish Natural Gas Market, ENERGIMARKNADSINSPEKTIONEN (June 2012), http://ei.se/Documents/Publikationer/rapporter_och_pm/Rapporter%202012/Ei_PM2012_06.pdf.
10 Nuclear Power in Sweden, WORLD NUCLEAR ASSOCIATION (last updated Mar. 2016), http://www.world-nuclear.org/info/Country-Profiles/Countries-O-S/Sweden/.
11 Anna Hirtenstein, Sweden Boosts Renewables to Become First Fossil-Fuel-Free Nation, BLOOMBERG (Sept. 16, 2015), http://www.bloomberg.com/news/articles/2015-09-16/sweden-boosts-renewables-to-become-first-fossil-fuel-free-nation.
12 HEAVENORSHELL: SJÖBO, http://heavenorshell.se/sjobo (last visited Apr. 8, 2016).
13 HEAVENORSHELL: THIS HAS HAPPENED, http://heavenorshell.se/detta-har-hant (last visited April 8, 2016).
14 HEAVENORSHELL: WHO WE WERE, http://heavenorshell.se/vilka-vi-var (last visited April 8, 2016).
15 Guide to Mineral Legislation and Regulations in Sweden 1-2, GEOLOGICAL SURVEY OF SWEDEN (Feb. 2006) [hereinafter GSS Guide], http://viavasterbotten.se/wp-content/uploads/2012/12/Guide-to-mineral-legislation-SGU-2006.pdf.
16 GSS Shale Gas, supra note 5.
17 GSS Guide, supra note 14, at 3-4.
18 Swedish Uranium Search Leads to Shale Gas Investigations, NATURAL GAS EUROPE (Nov. 16, 2011), http://www.naturalgaseurope.com/aura-3492.
19 GSS Guide, supra note 14, at 2.
20 GSS Shale Gas, supra note 5.
21 Id.; GSS Guide, supra note 14, at 6-7.
22 GSS Guide, supra note 14, at 5.