The Government consultation confirms that it believes that a statutory right of access would be an appropriate solution to current difficulties to moving these developing industries forward. The proposals will principally apply to shale gas and oil but also geothermal energy extraction. The proposals are not intended to apply to coal bed methane or underground coal gasification development.
- Right of underground access to land below 300 metres (circa 1000 feet) from the surface to companies exploring and/or extracting oil, gas or geothermal energy.
This proposal is to grant a right of underground access to companies extracting petroleum (as defined under the Petroleum Act 1998 – including gas or oil) or geothermal energy in land at least 300 metres below the surface. This is intended to remove the current legal position that underground access, without necessary landowner consents, will constitute trespass.
The right to access would only apply to companies seeking to extract energy, in the form of petroleum or naturally-occurring heat, from land below 300m.
The consultation confirms that the right to access would not be dependent on a company having obtained all necessary permissions. Any company looking to develop shale gas and oil or geothermal energy would still need to obtain all the necessary environmental, planning permissions in order to commence drilling lawfully, but the right to access would exist independently of these necessary permissions.
- Payment in return for Access
The Government supports the industries' voluntary offer for a payment system to involve a £20,000 one-off payment for each unique lateral (horizontal) well that extends by more than 200 metres laterally. Where lateral drillings vertically coincide payment is to be made only once. Payment would be to a relevant community body (as agreed between the operator and the community itself), and not split between individual landowners.
The consultation confirms that the Government expects industry to come forward with details of this payment offer during the consultation period.
The Government believes that a voluntary system, in contrast to a statutorily defined payment, will be more flexible and allow for a more tailored approach to each community and at a community level.
Alongside the voluntary payment a legislative reserve power to enforce payment through regulations if the industry voluntary scheme is not honoured is proposed. The consultations states that if the reserve power were used, such regulations would be subject to a separate consultation.
- Voluntary notification system for the community
The community would be informed via a voluntary public notification delivered through the same industry voluntary agreement as the payment, rather than set out in statute. The company would outline matters such as the relevant area of underground land, coupled with details of the payment that will be made in return for the access. The consultation states that notification would not be a mechanism for an individual or community to object to the project.
The consultation could have proposed that the statutory procedure be applied to the industries, which is currently available under section 3(2) of the Mines (Working Facilities and Support) Act 1966. But, judging that procedure to be too lengthy and costly the Government has made the more industry friendly proposals outlined above.
Considering the proposals, Uisdean Vass, Partner at Bond Dickinson, comments: "The current legal framework is the cause of considerable frustration and delay to companies seeking to proceed with larger scale shale development so that these proposals for a statutory access right will be welcomed by the industries.
The British Geological Survey published to coincide with the consultation reveals a potential for 4.4 billion barrels of oil-in-place, in the Weald Basin. The Basin already has PEDLs in place and existing history of hydrocarbon exploration. The potential of the Weald, which can only be confirmed by large scale exploratory drilling, illustrates just how important these proposals are in facilitating the transition to a low carbon economy and ensuring energy security for the UK."