Shale gas has emerged as a potentially significant source of new and accessible natural gas reserves. Significant gas shale prospects have been found in a number of jurisdictions including North America, Europe, Asia and Australia. Benefits for these jurisdictions include reducing their dependency on imported energy supplies which are often more costly in terms of exploration, production, processing and/or transportation.

Technological advancements have been essential to the development of shale gas-in particular the use of hydraulic fracking. This involves forcing a mixture of water, sand and chemicals into shale rock formations under high pressure. Fracking has made it possible to unlock natural gas in a cost effective manner that would otherwise be inaccessible using conventional drilling methods.

However, the use of fracking has proved controversial. Concerns with fracking include excessive water usage, ground water supply contamination, uncertainty regarding the chemicals used in the process, and adverse effects on ground stability. Public concerns and negative mainstream media and NGO reports have led various jurisdictions including the United Kingdom, France and various North American states/provinces to place moratoriums on fracking pending further study and inquiry.

In large part, these moratoriums on fracking are the result of regulators needing to examine and understand the new technology related to the fracking process and regulations drafted to appropriately reflect this understanding. In many cases, existing regulations related to gas production do not adequately address new fracking production techniques and related public concerns. This regulatory vacuum results in uncertainty and frustration for shale gas producers, the public and regulators.

Given the current state of affairs, we suggest that industry should take the opportunity to play a lead role in collaborating with governments/regulators, the public and responsible interest groups in the development of sustainable regulatory regimes for fracking and shale gas production. These regimes should balance the need for public consultation with responsible shale gas development and production in a cost effective and environmentally sound manner using up to date technology.

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