Shale gas: increasing intervention by local authorities

In most countries, unconventional gas production (as is the case with most natural resources) is of national interest. The production of shale gas, tight gas and coal seam gas through hydraulic fracturing is considered an important source of revenue and an important element in the nation’s energy policy. The big national interests at stake with unconventional gas production put local governments under pressure. Local governments usually are concerned with protecting the local environment for the benefit of present and future generations. Often, these concerns have a legal basis, either in the constitution, in the public trust doctrine, or in domestic legislation in the field of land use and planning and/or environmental protection.

In several shale gas rich countries around the world, we see attempts by local governments to challenge hydraulic fracturing (fracking) using various legal pathways.  Examples are popping up everywhere, now almost on a monthly basis. In the US, in December 2013, the Pennsylvania Supreme Court declared an Act that sought to eliminate zoning authority from municipalities over shale gas extraction, unconstitutional because it infringes the municipalities’ duty under the state’s constitution (Environmental Rights Amendment), to act as a trustee of natural resources. In 2014, the shale gas richest province in the south of the Netherlands and several of the municipalities in this province, banned exploration and production of shale gas altogether, using various legal instruments in the field of environmental law and land use planning law.

Although local authorities do not have competences in the field of mining law, they do have responsibilities and associated powers under planning law. Local zoning and planning is always done at the local level, and hence, municipal authorities may set restrictions or conditions to any new activity so as to fit in this activity within the existing land use. These powers can be very far-reaching, even rendering the use of a production permission entirely impossible. Should, for instance, a local zoning plan prohibit mining activities at a certain location, or prohibit the issuing of a construction license to mining constructions on that location, then no mining can take place there, even after the competent authority for the mining operations granted all necessary permits.

Both in the Netherlands and the United States, however, central governments have legislated in order to have the regulatory tools to intervene in local decision-making when needed to ascertain that mining activities go ahead. In the case of shale gas, local governments and local communities increasingly pursue legal pathways to block or at least hinder shale gas operations. In the example of Pennsylvania,  the state authorities used their legislative power to overrule local decision-making. Courts, however, seem to be willing to limit or even block such intervention because it infringes on the constitutional right to a clean environment and the public trust doctrine, also laid down in the constitution, according to which governments have to protect the environment for present and future generations.  

In the Netherlands, instruments to overrule local decision-making in the field of environmental protection and spatial planning are in place, but have not been applied yet. The debate on the constitutionality of such intervention has not arisen yet. Should intervention take place, it is likely to be argued that this is unconstitutional, not just because of the alleged infringement of the right to a healthy environment (somewhat similar to Pennsylvania, laid down in the Dutch constitution in the form of a basic duty for the government), but also because of the principle of decentralized governance that forms the basis of the Dutch public governance system.  It remains to be seen whether such reasoning is going to be successful, as the Netherlands does not have constitutional courts, nor the possibility to have legislative acts of the national legislature tested against the constitution.  Even without these opportunities, however, it is clear that Parliament will scrutinize any attempt by the Cabinet to overrule local rules and regulations as this will be considered to undermine future collaborations with local authorities on which the central government in almost every policy field depends for the execution of their policies. In a previous attempt in the Netherlands, to impose national decision-making upon an unwilling municipality (the selection of a location for an onshore carbon capture and storage demonstration project), huge public uprising occurred, ultimately leading to the abandonment of the project. 

In Germany and France, by contrast, public protests, mainly at a local level, have strongly influenced decision-making at the national level, more or less by-passing local governments. This probably is due to the fact that in these countries, local authorities have little power to stop or regulate shale gas exploration and production. Hence, protesters –with much success– aimed at national political institutions rather than at local authorities. In France, opposition was especially fierce because of the lack of public consultation. Both countries imposed a moratorium on the exploration and production of shale gas through hydrofracking with the use of chemicals.

The above brief assessment of the role of local governments in the hydrofracking debate shows that the local level plays an important role indeed. Simply ignoring or legislating local governments and local communities out of the picture will be counterproductive, as the local level has legal and political cards to play out, and, constitutionally, perhaps even has to play out these legal cards to protect the environment for present and future generations. It seems, therefore, that local communities determine the success of unconventional gas development and should be taken seriously by central governments that plan to support hydrofracking. Transparency and meaningful involvement of local communities should be pursued, allowing for any kind of outcome, including the outcome of a moratorium or ban. It can be expected that at the EU level, where legislation is currently being prepared, focus will be on such important procedural issues.