On October 10, 2017, the French National Assembly took the first step to adopt an energy-related bill that would phase out conventional and unconventional oil, gas, and coal exploration and production on French territory by 2040, if ultimately adopted after review by the Senate. This initiative is part of France's greenhouse gas reduction effort under the Paris Agreement and calls to "leave fossil fuel in the subsoil" in order to help reduce the consumption of fossil fuels in France.
No Issuance of New Permits
A law dated July 13, 2011, repealed the permits that had been granted for the exploration and production of unconventional hydrocarbon using hydraulic fracking techniques, and currently prevents public authorities from granting new permits for these activities. If adopted, the new law would extend this framework to all exploration and/or production techniques and all hydrocarbons, whether conventional or unconventional, with the exception of mine gas (an extremely minor activity with only one small site in the North of France). The law would also prohibit granting permits for applications currently under review. In contrast, the permits already granted for the exploration or production of conventional oil and gas could be prorogated until January 1, 2040, under certain conditions. As a result, the exploration and exploitation of hydrocarbons and coal would be phased out.
A Progressive Implementation
It should be noted that the original language of the bill was amended from the "ban" of oil and gas exploration and production to refer to a "phase out." Such amendment should preserve the rights of existing permit holders to have their permits prorogated if needed, thereby avoiding having the new law be struck down by the Constitutional Court. The French government believes that the increased predictability of the new framework should prevent potential compensation claims, which cannot, however, be entirely ruled out.
A Broad Territorial Scope
The new law, if adopted, will apply to the French territory (including the subsoil of land territory, internal waters, territorial sea), as well as the soil and subsoil of the exclusive economic zone. It would apply in most overseas territories, with the exception of French Polynesia and New Caledonia, which have jurisdiction to adopt legislation regarding mining activities whether on land or marine territories, and also the exception of marine areas around the French Caribbean islands of Saint-Martin and Saint Barthélemy. However, for the avoidance of doubt, this new law will only apply to fossil fuel produced on the French territory. France will actually keep importing fuel produced abroad, which represents 99 percent of oil and gas consumption in France.
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