Review of USА legislation in the field of environmental and legal regulation of shale gas production: experience for Ukraine
Authors: Oleksii Mykhaiskyi 
Published: June 2020

Ensuring energy security has always been one of Ukraine's main problems. Now the level of shale gas production in Ukraine allows to cover only half of the country's needs in this type of fuel. According to the Energy Strategy of Ukraine until 2035, one of the priorities of development in the fuel and energy sector is to increase the level of gas production to 30–35 billion m3 of gas per year, including at the expense of non-traditional hydrocarbons, among which shale gas can be allocated.

However, it should be noted that Ukraine's modern mining industry does not provide an adequate level of environmental protection. This problem becomes even more acute in the context of the possible production of shale gas, which requires state-of-the-art production technologies and a flexible regulatory system. Today, the United States is the most developed country in shale gas production. It is the United States that has the largest experience of shale gas production among all countries of the world, and its legislation has been shaped by the realities of shale gas production since the 1980s.

The article analyzed U.S. legislation in terms of environmental and legal regulation of shale gas production. Consideration has been given to U.S. legislation that regulates the protection of water, air, soil from pollution, as well as waste management legislation and the disclosure of confidential information related to shale gas extraction necessary to protect the environment, as well as human life and health. The US legislative structure is analyzed and it is revealed that federal legislation does not provide the proper level of environmental protection, which is why the environmental and legal regulation of shale gas production occurs mainly at the state level. The main problem of regulating shale gas production at the federal level is the so-called «Halibarton loophole», due to which operations using hydraulic fracturing are removed from the regulation of most federal environmental standards. There is no such norm in Ukrainian legislation, but the Law of Ukraine "On Agreements on Division of Products" is not regulated by the Law of Ukraine "On Oil and Gas," this makes it possible to fix in the agreement on division of products all nuances related to shale gas production. At the same time, this is a significant risk of the occurrence of a case in which the agreement, contrary to Ukrainian legislation, will neglect the interests of the environment. That is why Ukraine needs standards like NAAQS, which also apply to legal relations arising from the signing of a production sharing agreement, which would avoid disregard of Ukrainian legislation when signing a production sharing agreement.

The article also addresses the Fracturing Responsibility and Awareness of Chemicals Act and states that it requires an operator using hydraulic fracturing to provide information necessary for medical diagnosis, treatment or emergency response. In doing so, the operator, once such information has been disclosed to the State or health worker, may require a written declaration of the need for disclosure and a confidentiality agreement as soon as possible after it has been determined by the State or medical institution. It is proposed to develop a similar bill and introduce it into Ukrainian legislation.