As part of the UK Government's support of the onshore shale gas industry in England and Wales new initiatives and regulations continue to be published. In September 2015 steps were taken to require councils to hit targets for determining planning applications or face determination by the Government. The first performance data on this has now been published and we have provided an update on this below. The Government has also sought to clarify the position on shale operations in or near protected areas which we also explore.
First oil and gas performance data published
The Government has made it clear that it intends to remove further obstacles to shale gas exploration. Greg Clarke's Written Ministerial Statements (WMS) of 16 September 2015 provided further clarification on the non-statutory designation process for onshore oil and gas by which the Government would take steps to identify local authorities that 'repeatedly' fail to determine oil and gas applications within the statutory timeframe, as well as the recovery criteria for appeals. For more information on this process read our briefings here: Written Ministerial Statements confirm process for shale gas and oil developments (September 2015) and What does the Government's Policy Paper mean for shale gas and oil developments?(August 2015).
As part of Government plans to identify 'repeatedly failing' authorities, Department for Communities and Local Government (DCLG) on 22 September 2015, for the first time, published a table (P155) setting out local planning authority performance on their speed of decision-making, specific to onshore oil and gas applications.
The new Table P155 gives an indication of how local planning authorities' performance measures up against new criteria, which would see councils identified as underperforming should they have decided 50 per cent of oil/gas applications or fewer within the statutory determination period (within 13 weeks, or 16 weeks if an environmental impact assessment is required, unless otherwise agreed with the developer). Councils will not be identified as underperforming if they have decided no more than two such applications over the assessment period. However, where they are underperforming the Government will wrestle control of the process.
Fracking operations and associated surface activities in protected areas
During the passage of the Infrastructure Act in January 2015 the Secretary of State declared that, "we have agreed an outright ban on fracking in national parks, sites of special scientific interest and areas of outstanding natural beauty” (official report, 26 January 2015). Subsequently it became clear that the Government would permit fracking underneath the protected areas; DECC was reported to have stated that "it would be impractical to completely rule out drilling in SSSIs".
When section 50 of the Infrastructure Act is brought fully into force, the Petroleum Act 1998 will be amended to restrict hydraulic fracturing (as defined in the Petroleum Act), from the surface to a depth of 1,000 metres anywhere in England and Wales. The section further stipulates that no hydraulic fracturing can take place within "Protected Groundwater Source Areas" or "Other Protected Areas". A statutory duty was imposed on the Secretary of State to lay draft regulations by 31 July 2015 setting out these definitions. The Onshore Hydraulic Fracturing (Protected Areas) Regulations 2015 (Protected Areas Regulations) (the draft Protected Areas Regulations), were laid in Parliament on 16 July 2015.
The draft Protected Areas Regulations would have the effect that fracking would be allowed under, but only at depths below 1,200 metres, National Parks, the Broads, AONBs, and World Heritage Sites, and Source Protection Zones (SPZ) 1 (areas close to a drinking water source where the risk of associated with groundwater contamination is greatest). The definition did not include SSSIs unless already covered by other designations.
At the same time as the draft Protected Areas Regulations were laid in Parliament, a statement was made announcing the Government's commitment to ensuring that hydraulic fracturing cannot be conducted from wells that are drilled at the surface in specified protected areas and stating that more information on this was to follow shortly (endnote 1). The draft Protected Areas Regulations were widely criticised for omitting any implementation of this commitment.
Debate in the Delegated Legislation Committee
The draft Protected Areas Regulations and the level of protection given to special areas of the English countryside from the impacts of fracking were debated on 27 October 2015 by a cross party committee of MPs, including two members of the SNP.
Andrea Leadsom (Minister of State, DECC), opened the debate by outlining the intended effect of the draft regulations. She stated that the regulations "can relate only to subsurface activities".
She said that the government "(…) will, as soon as possible, make a statement regarding the areas on ground level – the surface drill level – in which activity will be banned. We will be making announcements shortly, but that is not for today".
She also stated that the draft Protected Areas Regulations flow from the Infrastructure Act's requirement to specify the protected areas within which subsurface hydraulic fracturing cannot take place. She stated, consideration of the surface activity was outside of the scope of the draft Protected Areas Regulations.
The draft Protected Areas Regulations and the Minister saw criticism in the course of the debate, including calls for the draft Regulations to be withdrawn.
In response the Minister stated that "I confirm that we will make clear, as soon as possible, the specific policy on banning surface drilling in our most valuable and precious areas, and that will include national parks and areas of outstanding natural beauty." (…) "To clarify, all those rules will apply to hydraulic fracturing", not the onshore oil and gas drilling industry.
Barely a week after the debate DECC issued a consultation on the proposed restrictions on surface development through the Petroleum Exploration and Development Licence (PEDL) (URN 15D/513) dated 4 November 2015.
The Consultation states that the Infrastructure Act 2015 and the draft Protected Areas Regulations address hydraulic fracturing which occurs underground. It acknowledges that the Government has indicated that safeguards should also be applied to associated surface activities in specified protected areas and that it has committed to ensuring that hydraulic fracturing cannot be conducted from wells that are drilled at the surface in specified protected areas (also noting that this is not intended to impact on conventional drilling operations).
The Consultation proposal is that a licence condition would be included in all new PEDLs in England, to be awarded from the 14th Onshore Licensing Round onwards. The proposed condition would prevent "associated hydraulic fracturing" operations (defined in section 4B(1) Petroleum Act 1998, as inserted by the Infrastructure Act 2015), from taking place from new and existing wells that are drilled at the surface in specified protected areas.
In relation to existing PEDLs in England the proposal is that the Government would make a policy statement that the Secretary of State is minded not to approve any proposed programme of works which includes carrying out of hydraulic fracturing from new or existing wells drilled at the surface in specified protected areas.
The Consultation proposes that the surface restrictions would apply to the areas defined in the draft Protected Areas Regulations and to additional sensitive areas, meaning that the surface restrictions would apply to National Parks, the Broads, AONBs, World Heritage Sites, Source Protection Zones (SPZ)1, and additionally to SSSIs, Natura 2000 sites and Ramsar sites.
In relation to the specified areas the Consultation states that all the sites "are already afforded strong protections by the existing regulatory and planning system", and invites "views on the areas within which surface development should be restricted".
If these proposals are taken forward then drilling will still be permitted from outside the boundaries of these specified areas, but fracking could only take place below 1,200 metres. Note however, that the Consultation states that the proposals will not apply to drilling for conventional hydrocarbon resources and "also [will] not apply to the production of other unconventional resources, such as coal bed methane, which do not use high-volume hydraulic fracturing."
What happens next?
On the same day that the Consultation was published, a question on the draft Protected Areas Regulations was put to the Leader of the House of Commons:
"Will the Leader of the House ensure that there is a proper debate in the House? Will he tell us where the measure has disappeared to? Will he explain why the Department yesterday announced publicly a consultation on the very subject that is theoretically mid-passage through this House but did so without even bothering to tell this House?"
The draft Protected Areas Regulations are still in draft form. Although they have been considered by the Second Delegated Legislation Committee, the affirmative resolution procedure still requires for them to be approved on the floor of both Houses of Parliament, which was intended for this Autumn. To date this is still outstanding, but we understand it is imminent and that the motion is likely to be tabled shortly after the current recess which ends on Monday 16 November. The future Business of the House of Commons shows the draft Regulations under business 'not yet scheduled for a specific date'.
In theory it is possible that the draft statutory instrument might not be approved, but the last time that happened was in 1969, so statistically it is unlikely that the draft Protected Areas Regulations will not be approved.
The proposals set out in the Consultation, which closes on 16 December 2015, are not dependent on the regulations. However, the draft Regulations could be approved before the outcome of the current Consultation is known.
That means that currently, all that is clear and definite about the Government’s position on hydraulic fracturing is that it will not be permitted in protected areas at depths of up to 1,200 metres.
The legislation and draft Protected Areas Regulations give rise to questions of interpretation, also demonstrated by the disagreements over interpretation seen in the Committee debate. We will have to await further developments, hopefully to achieve greater clarity.
Please do get in touch if you have any questions on the matters covered by this briefing.