PARIS (AP) -- France's constitutional council upheld a ban on the energy extraction process known as fracking on Friday, two days after the European Parliament voted to require full environmental reports from companies that want to establish hydraulic fracturing sites.
The decision comes the same day the International Energy Agency predicted the United States would overtake Russia next year to become the world's largest oil producer outside OPEC, renewing questions about Europe's ability to compete in a shifting energy landscape.
French President Francois Hollande had promised to maintain the ban imposed by his predecessor in 2011, even though France had been named among the most promising European countries for shale gas extraction. The French, who rely largely on nuclear energy, fear the environmental costs of hydraulic fracturing are too steep.
Laszlo Varro, head of the International Energy Agency division that monitors hydraulic fracturing, said fears in Europe were overblown but added that it was too early to predict the effects of the European Parliament regulations.
"You can have an environmental assessment framework which is the functional equivalent of killing the industry" or it could be one that ensures protections while letting industry flourish, he said.
How does fracking work?
A high-pressure mixture of water, sand and chemicals is blasted deep into shale, splitting it open and allowing oil and gas to flow. Improved technology has given energy companies access to stores of natural gas underneath states from Wyoming to New York in the U.S. In Europe, Poland is considered the most promising location.
Fracking is hard on the environment and has triggered minor earthquakes. It consumes enormous amounts of water and leaves chemicals behind. France banned fracking in 2011. In Britain, where permits may be granted in the next two years, the prospect has touched off protests. A September U.S. study found that drilling and fracking don't seem to spew immense amounts of methane, strengthening a big selling point for natural gas -- that it's not as bad for global warming as coal. That study didn't address concerns about potential air and water pollution.
Europeans pay among the world's highest energy prices. Americans pay about a third as much wholesale, and analysts say the low prices -- and the U.S. economic recovery -- are largely attributable to fracking. In France, the average annual household energy bill is $3,120 (2,300 euros), compared with $2,024 (1,495 euros) and falling in the U.S., according to the Energy Information Administration.