Opinion - Scaled-up European shale gas development is likely 10-15 years off as regulations coupled with little infrastructure, higher costs and mounting environmental concerns burden a lengthy licensing process.

U.S. and European shale gas development is a tale of two regulations, one marked by a free-for-all bonanza in some U.S. states which has cut national gas prices and imports and by a welter of legislation across the European Union.

Now the sight of a U.S. public backlash and back-pedalling regulators will only further stall a European rollout of hydraulic fracturing or fracking, the technique of blasting sand and fluids to force pockets of gas trapped in shale deposits deep underground.

The practice is currently banned in France, remains suspended in Britain following a magnitude 2.3 tremor associate with a test drill and is a subject of public debate in Germany.

The slow pace of progress suggests the EU may have erred too much on the side of caution while reflecting the reality of a more densely populated land mass naturally resistant to extensive onshore drilling.

EU states have barely broken ground on shale gas resources estimated at about three-quarters the size of those in the United States, with some 20 test drills compared with more than 25,000 U.S. wells.

The European Union's executive Commission doesn't foresee EU legislation directly regulating shale gas, much as no central directive regulates any other hydrocarbon production, senior European Commission energy official Philip Lowe told an SMi industry conference in London last week.

But that partly reflects existing environmental regulation encompassing water quality, environmental impact, planning permitting and safe use of chemicals which together capture key concerns of groundwater contamination and landscape blight.

A full regulatory picture in Europe must await an avalanche of reports, in true EU fashion, on the existing legal permitting framework (due in late 2011); groundwater contamination (early 2012); the economic impact (early 2012); climate impacts (mid-2012); and environmental impacts (mid-2012).

New regulation will be a last resort in a bloc which has plenty, and given the need for a domestic energy boost which could also strength Europe's arm in price negotiations on gas imports.

Concern

Growing U.S. concern has been for full disclosure of potentially toxic fracking chemicals used in drilling as well as leakage of natural gas.

Fracking caused potentially harmful methane-contamination of water wells near drilling sites in the Marcellus shale formation in Pennsylvania, researchers concluded this year.

Now U.S. regulators plan to force chemicals disclosure regarding drilling on federal lands , and will release next year results of a study on effects on drinking water , adding to plans for rules on wastewater disposal by 2014.

Groundwater contamination ranks alongside other concerns including earth tremors, leakage of greenhouse gases, air pollution, truck movements, landscape damage and water consumption.

In Europe chemicals regulation already requires the registration of chemicals used in fracking, and more diffuse concerns weigh.

France, which has the bloc's second biggest shale gas reserves, last month cancelled fracking licences following an earlier ban given environmental concerns.

In Britain, drilling remains suspended after leading explorer Cuadrilla Resources acknowledged last week that it had caused two small earthquakes.

In Germany one regional moratorium has added to new public discussion. Poland has Europe's biggest reserves and among the least state resistance, so far.

What Next?

EU shale gas uptake has been further delayed by a lack of a U.S.-style drilling infrastructure, which raises costs, while urgency is less given expanding supply options through new planned pipelines from Russia and the Caspian Sea and imports of liquefied natural gas (LNG).

A combination of regulation, public doubts and higher costs implies a realistic timetable for scaled up European production from about 2025, and then still far below U.S. levels now, according to consultants Wood Mackenzie and Nexant.

New York state may provide a regulatory example, meanwhile. In proposed new rules for drilling, which would end a fracking suspension, it has imposed off-limits buffers around waterways. European public will likely demand additional buffers encompassing widespread protected areas.