Spain expands constitutional challenge to allow fracing

3/21/2014

Spain expands constitutional challenge to allow fracing

TODD WHITE and NICK LEIBER

MADRID, Spain (Bloomberg) -- Spain’s government will seek to overturn a ban on fracing in the wine-making region of La Rioja, relying in part on the European Union’s January guidelines for the drilling technique.

The cabinet voted today to file a constitutional challenge to La Rioja’s prohibition on the water-intensive method used to explore for oil and gas. The ban wrongly strips authority from the national government to regulate prospecting and runs contrary to Spanish law and preliminary EU rules that endorse fracing, the cabinet said in a statement.

The decision widens a policy to wrest control from regional governments over fracing. The cabinet this year voted to appeal a similar ban on fracing in Cantabria, a region that like La Rioja is in the north and is relatively rich in water resources.

The move today is a “logical step” given that Spain had previously acted against Cantabria, Juan Klimowitz, co-owner and general manager of exploration consulting firm Gessal in Madrid, said today in an interview. “It makes sense since the regions went outside the national law that covers hydrocarbon exploration.”

The central government began requiring environmental impact assessments on all fracing projects last year before deciding on permits for those that passed. It says allowing environmentally safe prospecting is necessary in a country dependent on oil and gas imports.

Wine has been cultivated for more than 1,000 years in La Rioja, which is home today to more than 500 vineyards including Marques de Riscal SA and Ramon Bilbao SA.

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