Press articles and reports

In May 2014, the Kosciuszko Institute released a “brief programowy” publication about the so-called “Package of shale gas laws” and their impact on the process of exploration and production of shale gas in Poland. The authors of the paper are Adam Wawrzynowicz (managing partner, W&W law firm) and Izabela Albrycht (a political scientist and President of the Kosciuszko Institute, and editor-in-chief of the International Shale Gas & Oil Journal).
“Is the package of Shale Gas laws a response to the expectations of the Polish shale gas sector?” covers the ongoing legislative process since 2012. This includes the draft amendment of the Geological and Mining Law, the creation of a new law on the Special Hydrocarbons Tax, the amendments of the Law on Mineral Extraction Tax and certain other laws (“the shale gas package”). The authors present the most important legislative solutions and summarize the results of the public consultation and the opinions of representatives from the hydrocarbons prospecting, exploration and production sectors within registered lobbying reports. In a brief summary of the current state of play, an analysis is made of how their adoption in their present shape will affect the economy and if the proposed solutions will be an incentive for investors.
Published as part of the Kościuszki Institutes ongoing project “What are the opportunities for unconventional gas for Poland and Europe?”
“Is the package of shale gas laws a response to the expectations of the Polish shale gas sector ?” is available on our internet site in a ,pdf version. You are encouraged to read it!

The authors argue that, to this day, implementing regulations to the amended Act have not been issued, which, in the opinion of the administrative organ, justifies the continuing maintenance of the present procedural arrangements with ZUD, based on existing regulations and the transitional provisions of the above amendment.
The article assesses the validity of the above position.
“Regulations for the location of the proposed network utilities – the main obstacle to the rate of investment in energy” appears in “Nowa energia” (1(37)/2014).
The full version of the article can be viewed using PDF icon below.
More information on the availability of documents can be found at www.facebook.com/wawrzynowicziwspolnicy

The author focuses, in particular, on one of the instruments for gas market liberalization – the exchange obligations. The primary responsibility related to the implementation of the obligations in the gas market is based on Article. 49b paragraph 1. According to this provision, an energy company engaged in the trade of gaseous fuels is required to sell no less than 55% of high-methane gas introduced in a given year to the transmission network.
The article offers an opinion in the discussion on the appropriateness and necessity of introducing exchange obligation, which raises significant concerns, owing to the fact that the implementation of the obligations will in practice be very difficult to carry out.

The article appears in the bi-monthly publication “Energetyka cieplna i zawodowa” (3/2014). You can read it here:
https://www.facebook.com/wawrzynowicziwspolnicy

User traffic and the operation of the distribution network play a particularly important role in the Polish gas market. The article discusses the changes that were introduced in the new TNC, the most important of which are: to establish a distribution area, the implementation of new rules for balancing customer distribution services, introducing the possibility of distribution services on the basis of continuous feedback, standardization of services for distribution security policies for all customers through the introduction of the institutional Gas Security Code, as well as the introduction of the provisions for the preparation and implementation of the new unification of all company operations, and the establishment of the standard contract for the provision of distribution services.

The details on the changes are presented in the article.

On January 22, 2014, the European Commission published the following documents in order to ensure the proper protection of the environment and climate from intensive hydraulic fracturing:

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT on the exploration and production of hydrocarbons (such as shale gas) using high volume hydraulic fracturing in the EU ( COM (2014) 23 final)
Commission Recommendation of 22 January 2014 on minimum principles for the exploration and production of hydrocarbons (such as shale gas) using high-volume hydraulic fracturing (2014/70 / EU)

In the body of the Communication, the Commission notes the high potential for shale gas production in the European Union. Although gas from shale formations, according to the Commission, is unable to provide the Union self-sufficiency in the supply of gas, it certainly can, at least partially, reduce the dependence of the EU on its imports. Potentially, shale gas may also lead to a moderate decrease or at least avoid an increase in gas prices, as well as strengthen the negotiating position over non-EU gas suppliers. The Communication also looks at the economic benefits for local communities and even the environmental benefits related to a lower emissivity of energy produced from gas in proportion to the energy produced compared to carbon intensive fossil fuels (subject to appropriate emission controls).

Above all, however, the Commission in its Communication focuses on the issues of environmental risks associated with the identification and extraction of gas from shale formations, in particular related to the contamination of groundwater and surface water from chemical substances contained in the fracturing fluid or leaking from the ground in the process of fracturing. In this context, the Commission emphasizes the need to communicate and address the risks and social concerns relating to the safety of shale gas extraction, and adopted a Recommendation laying down principles of operation to enable the extraction of gas from shale formations while protecting the climate and the environment.

The Recommendation invites Member States, when applying or adapting their legislation applicable to hydrocarbons involving high volume hydraulic fracturing, to ensure that:
– a strategic environmental assessment is carried out prior to granting licenses for hydrocarbon exploration and/or production;
– a site specific risk characterisation and assessment is carried out, related to both the underground and the surface, to determine whether an area is suitable for safe and secure exploration or production of hydrocarbons involving high volume hydraulic fracturing;
– baseline reporting (e.g. of water, air, seismicity) takes place, in order to provide a reference for subsequent monitoring or in case of an incident;
– the public is informed of the composition of the fluid used for hydraulic fracturing on a well by well basis as well as on waste water composition, baseline data and monitoring results. This is needed to ensure that the authorities and the general public have factual information on potential risks and their sources;
– the well is properly insulated from the surrounding geological formations, in particular to avoid contamination of groundwater;
– the application of best available techniques (BAT) for exploration and production, in order to prevent the occurrence of any threats.

According to paragraph 16.1 of the Recommendation, Member States having chosen to explore or exploit hydrocarbons using high-volume hydraulic fracturing are invited to give effect to the minimum principles set out in the Recommendation and to annually inform the Commission about the measures they put in place in response to the Recommendation.

The Commission will monitor the implementation of the Recommendation in order to improve transparency and as a comparison of the implementation of the recommendations in the Member States and will review the effectiveness of the Recommendation 18 months after its publication. The Commission shall submit a report to the European Parliament and the Council, and will decide whether it will be necessary to submit proposals. In this context, the Communication and Recommendation are potentially a prelude to future legislative initiatives undertaken at the level of the European Union, which may complicate the establishment of a sector involved in the exploration and exploitation of hydrocarbons from shale formations and thus slow down the pace of the “Polish shale revolution”.

The provisions of the energy “Tri-pack” have also resulted in further strengthening the independence and unbundling of the gas system operators into: transmission – TSO, distribution – OSD and storage – OSM, as well as other activities, in particular, involving transmission activities.