Yesterday, the Secretary of State for Energy and Climate Change refused the application for the Preesall underground gas storage project in Lancashire, being promoted by Halite Energy.  This was despite the inspectors recommending that the application be granted.  It was the eighth decision issued for a Planning Act application but the first refusal, issued 12 days before the end of the three month decision period.

This news will send a frisson through current and future project promoters and demonstrates that the benefits are capable of not being sufficiently certain to as to outweigh the adverse impacts of a nationally significant infrastructure project, even when projects of that type are declared to be urgently needed in a National Policy Statement.  It also demonstrates that the government is still prepared to turn down an application even when it is very keen on boosting economic growth through infrastructure provision.

The decision letter can be found here and the examining authority's report can be found here. In a nutshell, the reason for refusal was that insufficient geological assessment of the areas that were to contain the gas storage had been provided with the application.

The examiners thought this could be rectified by means of a requirement (i.e. the equivalent of a planning condition), so that the storage could only take place once a satisfactory assessment had been produced that allowed at least half of the applied-for capacity to be used.  The Secretary of State decided, however, that for the application to comply with the relevant National Policy Statement the geological assessment had to be carried out pre-application.

Paragraph 2.8.9 of NPS EN-4 states: Applicants should undertake, and supply to the [Planning Inspectorate], a detailed geological assessment to demonstrate the suitability of the geology at the site for the type of underground gas storage proposed.

I suppose it doesn't say it has to be pre-application, but it would have to be before the end of the examination to comply with that sentence.  I note in passing that the NPSs are now being hosted on the strange website of whitehall-admin.production.alphagov.co.uk.

The examiners took up this issue during the examination at the prompting of the two local authorities Lancashire County Council and Wyre Borough Council, and asked no fewer than 58 questions on it.  The representations of umbrella protest organisation 'Protect Wyre Group' also seem to have had some effect.

The Secretary of State additionally thought that leaving the assessment until afterwards risked the development not going ahead at all or with a smaller size than envisaged, which had a knock-on effect on realising the benefits of the project.

What lessons can be learned for other projects?  The particular facts in this application were obviously important, but two points seem worth repeating:

  • if there is a National Policy Statement in place, read it carefully and apply it as closely and clearly as you can
  • it may seem that any uncertainties about a project might be able to be removed by imposing requirements on the consent, but if these reduce the chance of the project going ahead, then the benefits of the project as seen at this point of granting consent will be consequently reduced or made less certain.

The usual six-week judicial review period now starts, and it will be up to  Halite to decide whether to challenge the refusal.