Policy Briefing: Arrangements for fracking operations clarified

The recent Infrastructure Act should provide greater legal certainty for the emerging shale gas sector. Anthony McNamee explains.

A shale gas fracking rig in the US
A shale gas fracking rig in the US

Q What implications does the Infrastructure Act 2015 have for the nascent shale gas industry?

A The act gives operators in England and Wales the means to access shale resources in "deep level land" at least 300 metres underground as an alternative to the largely unused system under the Mines (Working Facilities and Support) Act 1966. It does so by creating a right to use deep level land to exploit petroleum or deep geothermal energy.

Q How is the planning process for shale gas extraction changing?

A While the act makes no specific changes to planning procedures, a last-minute amendment imposes conditions on fracking in England and Wales. Fracking now needs a formal consent from the secretary of state for energy and climate change.

A consent cannot be issued unless a scheme to provide benefits, financial or otherwise, for the local area is in place, irrespective of permission. To grant consent, the secretary of state must be satisfied that 13 specific conditions on environmental matters and information are met. This can be evidenced by documents in the planning, environmental and health and safety permitting systems.

Regulations may also be made to require notification of the proposed or actual exercise of the right to use deep level land, as well as notification via the planning system.

Q What planning obstacles face applicants for shale gas rigs?

A In its report The Economic Impact on UK Energy Policy of Shale Gas and Oil, the Lords economic affairs committee pointed to population density, estimation of economically recoverable resources and public acceptability as potential obstacles.

The government is addressing public resistance on the one hand through legislative changes to ensure that the country has the most robust environmental and health and safety regulatory framework to prevent harm, and on the other by seeking financial and other benefits for affected communities.

Q What do local planning authorities have to consider when processing applications?

A Planning authorities need to treat fracking applications like any other and avoid any predetermination of issues. While elected members may indicate a predisposition for or against, their decisions must clearly be made on merit.

Authorities need not be concerned with the regimes of the Environment Agency, the Scottish Environment Protection Agency or the Health and Safety Executive, and should assume that these agencies will carry out their own robust assessments.

Instead, planning authorities should be concerned with whether or not the development is acceptable given the relevant development plan and any other material considerations.

Q What planning grounds are objectors using, and how can they make their case effectively?

A Grounds for objection include the potential for well failure, visual impact and amenity issues, highways disruption, water pollution and the potential for seismic activity. An effective objection has to be grounded in the development plan and relevant material considerations.

Q What benefits are landowners and communities entitled to, and how influential might these be?

A The act sets out a framework for future regulations on payments to communities and landowners. Until these are in force, the UK Onshore Operators Group has committed to providing communities hosting shale developments with a minimum of £100,000 in community benefits per well site at the exploration stage and one per cent of revenues at production. Operators are required to publish information annually on how they have fulfilled their commitments.

One developer, INEOS, has gone further and publicised its intention to support affected landowners and communities with a four per cent share of production revenues for landowners whose deep level land may be required, and two per cent of revenue for communities living within 100 square kilometres of wells. Whether these will be influential depends on the characteristics of each potential host community.

Anthony McNamee is a solicitor at law firm Bond Dickinson

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