Bulgaria's Cabinet decided on January 17 to amend the licence awarded to US oil firm Chevron, explicitly banning the use of hydraulic fracturing (fracking) technology in the exploration of potential shale gas reserves in the country's northeast.
The Cabinet awarded the exploration permit for the Novi Pazar area in June 2010, but did not specify at that time what technology the company could use. The January 17 decision now limits Chevron to drilling conventional wells only.
After the Cabinet meeting, Economy Minister Traicho Traikov said that Bulgaria would could allow use of fracking once it was clear that it held no risks for the environment.
On January 14, several thousand people gathered at protest rallies in Bulgaria's largest cities and towns to protest against shale gas extraction and the use of fracking. Apart from Sofia, there were protests in Plovdiv, Varna, Veliko Turnovo, Shoumen, Pleven, Bourgas, Kazanluk, Dobrich, Smolyan, Rousse and Blagoevgrad, while according to Capital Daily, Bulgarians living in London and Copenhagen also held protests.
Protesters called for Parliament to put a moratorium on exploration and extraction of shale gas and for a legislative ban on fracking.
Lawmakers obliged on January 18, passing an indefinite ban on highly-pressurised hydraulic fracturing (at more than 20 atmospheres) with a vote of 166 in favour and only six against, all of them from right-wing Blue Coalition.
Summarising the opposing view, Blue Coalition co-leader Ivan Kostov said Bulgaria should explore its options. "We must know whether there is an industrial possibility to extract shale gas," he said during Parliament debates.
Kostov said that ruling party GERB and other opposition parties tried to use the rallies against fracking for their own purposes, going beyond what the protesters were asking for.
It was irresponsible to ban exploration of alternative energy sources because Bulgaria needed to diversify, he said. "We buy gas from Russia for $420 a 1000 cubic metres, while prices in gas-producing countries, like the US and Russia, are four times lower."
But even Kostov's closest ally and co-leader of the Blue Coalition, Martin Dimitrov, backed the moratorium, saying that he was "opposed to experiments done on Bulgaria. The time will come when the technology is safe or its risks are clarified."
Other supporters of the ban, including former environment minister Djevdet Chakurov of the predominantly ethnic Turk Movement for Rights and Freedoms and former economy minister, socialist Roumen Ovcharov, said that Bulgaria was better off waiting for other countries to conclude their environmental risk assessments before allowing shale gas exploration to proceed.
In hydraulic fracturing, oil and gas companies induce fractures in rocks to speed up the release of fossil fuels by injecting highly-pressurized fluid, but the practice is not universally accepted, as it holds the potential risk of groundwater contamination and air pollution, as well as cause earth tremors.
In Bulgaria's case, the fears are exacerbated by the fact that the area covered by Chevron's licence has some of Bulgaria's most fertile land and has long been described as the country's "bread basket".
During the Cabinet discussion that preceded the decision to amend Chevron's exploration permit, Prime Minister Boiko Borissov said that "it was a mistake that the necessary wide public debate on this topic has not happened, so that it is explained to people what [fracking] means."
"If people are not convinced that this is the right thing, my reasoning is that we should stop [fracking] and start the public debate now."
Potential investors should persuade public opinion that shale exploration is profitable and safe, Borissov said.
The European Union is yet to discuss the issue in depth, although some countries have already issued dozens of shale gas exploration permits. Bulgaria would return to the issue once it is on the EU agenda, Traikov said after the Cabinet meeting.
In reply, Chevron told Bulgarian weekly Capital that it hoped to assuage Bulgarian fears concerning environmental risks, but did not commit to continued exploration activities in Bulgaria.
US ambassador to Bulgaria James Warlick, appearing on Nova Televisia channel, said that the company could provide millions in investment and create jobs. "Chevron has no other interests in Bulgaria besides shale gas and would be forced to leave the country if its opportunities are curbed," he said.
Without exploration, however, it was not clear just how big Bulgaria's shale gas reserves were. According to Economy Ministry estimates, these could range between 300 billion and one trillion cubic metres, enough to satisfy domestic demand (now at about four billion cubic metres a year) for decades.