UPDATE 1-UK's Cameron to EU: Don't stifle fracking with new laws

Tue Dec 17, 2013 9:50pm IST

* EU Commission to propose climate and energy measures

* Shale gas measures will be guidance only

LONDON Dec 17 (Reuters) - British Prime Minister David Cameron has warned the European Commission not to propose European Union-wide legislation to regulate the nascent fracking industry, saying such a move could create uncertainty and stifle investment.

Rising energy bills are a big issue ahead of a 2015 election and Cameron is keen to tap Britain's large resources of shale gas to shore up the country's energy security as its North Sea oil reserves decline.

In a letter to European Commission President Jose Manuel Barroso released on Tuesday, Cameron said the European Union could derail investment in British shale gas extraction, or fracking as the process is known, if it chose to legislate.

"I am not in favour of new legislation where the lengthy timeframes and significant uncertainty involved are major causes for concern," Cameron wrote in the letter dated Dec. 4. "The industry in the UK has told us that new EU legislation would immediately delay imminent investment."

Cameron's demarche fits into his broader strategy for reform of the EU. He has been pushing for a reduction in red tape, arguing that EU regulations are stifling economic growth and costing the continent billions of euros.

In January, the European Commission, the EU executive, is expected to publish a package of proposals related to its 2030 environment and energy strategy. These are expected to cover shale gas.

However, an EU official, speaking on condition of anonymity, said it had been decided the guidance on shale gas would not involve new binding law. Some 17 pieces of EU legislation already exist to govern shale gas operations.

"There will be no new legislative proposal on shale gas or fracking rules under this mandate," the official said, referring to the current Commission, whose term of office expires in October.

"The Commission will, however, table robust guidance to set out how member states should interpret and enforce the existing EU rules."

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