A new stage in the UK Government’s campaign to remove potential obstacles in the way of shale gas developments was reached last week following a debate in the House of Lords. Clauses on access to “deep-level land” for petroleum extraction and deep geothermal energy projects are now part of the Infrastructure Bill currently before Parliament.
Since English law recognises no lower vertical limit to landowners’ rights, the new clauses should prevent landowners from seeking to obstruct projects on the grounds that e.g. the drilling of lateral wells 1km underneath their property would be a trespass against them, or alternatively demanding an exorbitant price for agreeing to such use of “their” land.
The new clauses begin: “A person has the right to use deep-level land in any way for the purposes of exploiting petroleum or deep geothermal energy”. Land here means “onshore” land, and “deep-level” means at least 300 metres below the surface. In Scotland, the right so far only applies to geothermal electricity generation projects.
The right of use would include all phases of a shale gas or geothermal project: exploration, development, production and decommissioning. The clauses refer explicitly to “drilling, boring, fracturing or otherwise altering deep-level land” and “passing any substance through, or putting any substance into, deep-level land or infrastructure installed in deep-level land”. They also allow developers – as a matter of private law – “to leave deep-level land in a different condition from the condition it was in before an exercise of the right of use (including by leaving any infrastructure or substance in the land)”.
Although existing legislation provided scope for developers to override landowners’ objections to the use of their land to extract petroleum by statutory means, the Government concluded that the procedures involved were too burdensome. The new clauses were introduced following a consultation which ran from May to August 2014 and was discussed in an earlier post on this Blog. The consultation met with an overwhelmingly negative response, but largely from respondents opposed to fracking per se on a range of environmental grounds.
The new statutory right of exploitation removes a potentially time-consuming and expensive obstacle to development. Those opposed to individual developments that involve the use of “deep-level” land will now have to rely on public law licensing, planning and environmental processes, rather than the exercise or enforcement of their private law rights, if they wish to try to stop projects going ahead.
The Bill does not otherwise change the position in relation to rights and liabilities as between developers and landowners. If developers cause damage or harm during their operations, they are likely to be liable for remediation costs and to pay civil damages to any third parties adversely affected. Landowners could also potentially incur liability for environmental damage caused by developers using the new right in certain circumstances such as the insolvency of a developer. This position is likely to continue to focus commercial and other strategies, including possibly the imposition of some form of security for decommissioning / remediation costs as a condition of planning permission.