Proposals to grant underground access rights to operators extracting Gas, Oil or Geothermal Energy at least 300 metres below the surface level were the subject of a Government Consultation from 23 May to 15 August 2014 (endnote 1).  The responses to that Consultation were published on Friday 26 September 2014, along with draft amendments to the Infrastructure Bill to enact the Government's preferred solution.

While acknowledging that there is opposition to hydraulic fracturing and the use of fossil fuels in general, the Government Response states that the consultation was not intended to address this wider issue.  Driving the proposed changes is the Government's desire to improve upon the current statutory system for acquiring access rights and to cut the delay caused by the need to negotiate with each landowner.

The new 'right to use'

For relevant energy undertakers, a right to use 'deep-level land' (land more than 300 metres below the surface) for purposes connected with the exploitation of petroleum or deep geothermal energy, including:

  • searching;
  • assessing feasibility;
  • preparing for exploiting;
  • decommissioning; and
  • other consequential activity.

Rights granted and liabilities attached will be the same as if the rights had been granted voluntarily.

Payments

There will also be a power for regulations to require relevant energy undertakings to make payments for the new rights.

As currently drafted the legislation will allow regulators to set up a regime:

  • requiring payments to be made to landowners or to other persons for the benefit of the area in which the relevant land is situated;
  • specify the amount(s) of payment; and
  • require relevant energy undertakers to provide specified information to the Secretary of State about the exercise of the right and the making of the payments.

Notification

Regulations may also provide for a notification scheme to:

  • provide for energy undertakers to give notice to specified persons;
  • display notices; and
  • publish notice of the proposed right of use or its exercise, together with information on the application of any Payment Scheme.

The regulations may also require relevant energy undertakers to notify the Secretary of State about the proposed exercise of the right of use.

Enforcement measures may also be provided for, including financial penalties for breach of requirements.

Devolution

The proposals are stated to apply to England, Scotland and Wales. However, the original consultation took place before the Scottish Independence referendum, which has been followed by proposals for further devolution of power to Scotland, Wales and England.

The Scottish Government opposes the idea that the removal of access rights should be a decision for Westminster and so may yet seek to have such power devolved as part of Lord Smith of Kelvin's proposals for further devolution.  The 2015 General Election may also bear on Government policy.

If the proposed amendments are confirmed then before making regulations the Government will need to enter into further consultation.  While the industry has responded with various proposals to the Government's call to provide voluntary schemes for acquisition of access rights, we will need to await the next set of regulations for further detail of the statutory provisions.