1. Skip to navigation
  2. Skip to content
  3. Skip to sidebar

UK fracking: the pursuit of safety

Further changes to the Infrastructure Bill have now addressed the potential problems for the UK unconventionals industry introduced by a Labour amendment two weeks ago, but the approach of Scottish and possibly Welsh Ministers is less encouraging for would-be shale developers.

Infrastructure Bill

At the last substantive debate on the Infrastructure Bill in the Commons, an amendment was inserted providing that “any hydraulic fracturing can not take place” unless 13 conditions are fulfilled.  As we pointed out in an earlier post, the drafting of this “safeguarding” provision (which can be seen here at amendment no.21) left considerable scope for doubt as to when some of these conditions would be satisfied.  Such uncertainty inevitably assists those who want to delay or obstruct fracking operations.

The House of Lords has now replaced the Commons’ amendment with some much better drafted provisions (see amendment 21B here) that provide a clear and practicable route to satisfying each of the safeguarding requirements proposed by the Commons.  Although the Labour spokesman, Lord Tunnicliffe, raised a number of points of detail which he suggested had been lost in translation from the Commons’ amendment to the Government’s version (see column 1079 of the Hansard report), it seems possible that there will be no further changes when the Bill returns to the Commons for the next stage of the so-called ping-pong process.

In the meantime, here are ten points to note about the new clauses:

1      The new clauses insert two new sections (4A and 4B) into the Petroleum Act 1998, under which oil and gas exploration, production and development licences are granted.

2      The standard conditions of licences for onshore development (the model clauses) provide that the licensee may not commence drilling of any well or borehole without the Secretary of State’s consent.  In future, any such “well consent” must contain a condition prohibiting fracking at a depth of less than 1000 metres and a condition requiring the licensee to have the Secretary of State’s consent for any fracking at a depth of 1000 metres or more.

3      Under new section 4A, the Secretary of State may only issue a “hydraulic fracturing consent” if he is satisfied that 12 conditions are met.  These conditions reflect the Commons’ 13 pre-conditions for permitting fracking, but they are expressed more clearly and 11 of them are accompanied by a description of the documents whose existence will be sufficient for the Secretary of State to be satisfied that the relevant condition is met – although the legislation explicitly states that he may also consider them to be satisfied without reference to such documents.

4      The 12th condition is “that a scheme is in place to provide financial or other benefit for the local area” – slightly wider than the equivalent Commons drafting.  The Commons’ 13th condition was about not fracking at less than 1000 metres: this is subsumed into the well consent itself, rather than being a condition for issuing the hydraulic fracturing consent.

5      The new conditions avoid imposing the Commons’ requirement to notify “residents in the area on an individual basis”, substituting a requirement for the local planning authority to confirm that the applicant has self-certified its compliance with publicity requirements under the planning regime.  Baroness Verma, speaking for the Government, pointed out that it would be difficult for the Secretary of State to be satisfied that all residents had been individually notified.

6      The picture is not yet quite complete.  Draft regulations are to be laid before Parliament, by 31 July 2015, to clarify the burning issue of exactly which “protected groundwater source areas” and “other protected areas” will be off-limits to fracking.  Unless the current Government (or its successor) means to beat that deadline by a wide margin, it may be Autumn before these important details have been clarified and we know whether Greenpeace’s analysis of the extent of the protected areas is unduly optimistic from an anti-fracking point of view.

7      Government has made a lot of statements and published guidance about the inter-relationship of the various different consenting regimes that apply to fracking, but new section 4A for the first time “joins the dots” between the different regimes in legislation.  So, for example, the condition on environmental impact assessment is linked to a notice from the local authority; the requirements about methane monitoring are linked to conditions in the environmental permit; and the requirement on well integrity is linked to an HSE certificate.

8      The decision to permit fracking in each case rests with the Secretary of State, but if everything is working as it should, he will issue the consent on the basis of work that is already required to be done under the existing planning and other regulatory regimes. Presumably for that reason, applications for hydraulic fracturing consents are not required to be published or consulted on.

9      A hydraulic fracturing consent may be issued subject to conditions.  Failure to comply with the conditions of a hydraulic fracturing consent, or with the prohibition on fracking at less than 1000m, could lead to revocation of the underlying licence.

10    Once the new sections are in force, the requirement to apply for and obtain a hydraulic fracturing consent before beginning to frack will apply whenever a licensee seeks a new well consent, regardless of when the licence under which the consent is sought was granted.

The provisions about hydraulic fracturing consents link to another change made to the text of the Bill as it left the Commons.  This relates to reporting by the Committee on Climate Change on the impact that greenhouse gas emissions from the use and extraction of gas from onshore sources may have on the UK’s ability to meet its Climate Change Act emissions reduction targets.  When such reports are produced (on 1 April 2016 and every 5 years thereafter), the Secretary of State will be obliged either to legislate to terminate the right of use of deep level land for petroleum and deep geothermal exploitation or to produce a report explaining why he has not done so.  But if the right of use is terminated, it will only be removed in respect of projects that have not already made use of that right.

Scotland and Wales

While for the Coalition Government in Westminster, a safety-first approach to fracking may be achievable simply by means of some deft legislative drafting, the politics in Edinburgh and Cardiff are different.  Both Scottish and Welsh Ministers have recently taken a less positive stance on fracking.

The negative noises from Ministers in the devolved governments come in the context of debates about further devolution of energy-related powers and against the background of the awkward split between the oil and gas licensing regime (currently administered by the Secretary of State for all of Great Britain, but a potential candidate for further devolution, particularly in Scotland)  and the planning regime (where Welsh and Scottish Ministers are, or can be, the ultimate decision-makers).  Any unconventional development will need both a Petroleum Act licence and planning permission.

On 28 January 2015, Fergus Ewing, the Scottish Energy Minister, announced that the Scottish Government’s “cautious, evidence-based approach” to fracking and its desire to hear “the voices of the communities…likely to be most affected…in a formal and structured way” meant that “it would be inappropriate to allow any planning consents in the meantime” and he announced ” a moratorium on the granting of planning consents to unconventional oil and gas developments…until such time as the work I have referred to has been completed”.  Scottish Ministers have also directed the Scottish Environment Protection Agency not to issue any “controlled activity regulation licences” during the moratorium (see page 17 of the report here for the full debate).

On 4 February 2015, there was a vote in the National Assembly for Wales in favour of both the devolution of energy consents and a fracking moratorium.  Discussion of fracking, ranging as far afield as New York and New South Wales, dominated the debate: the party lines on the subject in Cardiff are not the same as those in Westminster.

It seems that Welsh and Scottish Governments have made the political calculation that it is best to let England lead the way in building the UK evidence base on fracking.

, , , ,

UK fracking: the pursuit of safety

UK Parliament votes against moratorium on fracking – but there may be a catch

Perhaps unsurprisingly, yesterday afternoon’s House of Commons debate on the Infrastructure Bill did not result in the introduction of the explicit moratorium on further attempts to develop a UK shale gas industry that had been proposed by a number of MPs opposed to fracking.  However, two significant changes have been made to the Bill’s provisions on shale gas exploitation in the UK.

Pre-match build-up

The debate was at the Bill’s “Report” stage in the Commons: this is the first opportunity that the full House, rather than the Committee which has done most of the line-by-line scrutiny work, has to vote on changes to a Bill.  (It is also the last such opportunity, unless the House of Lords subsequently disagrees with changes made by the Commons.)  A large number of amendments had been tabled, mostly seeking either to restrict fracking in some way or requiring further investigation of and reporting on its impacts on climate change, for example as a result of fugitive emissions of methane from fracking sites.  Whilst both the Government and the official Labour Party lines are that fracking should be allowed subject to proper safeguards, there are differences of view as to how far existing legislation and institutions provide sufficient protection for the environment.  And there are a number of MPs of all parties who disapprove of fracking in any circumstances.

This strain of opposition to fracking in principle was demonstrated when the House of Commons Environmental Audit Committee (EAC), which has been considering fracking, chose to publish its report on the morning of the debate.  The report puts the case against developing a UK shale industry on the grounds that it would inevitably be inconsistent with the UK’s climate change emissions reductions targets to do so.  The EAC argue that the Government is wrong if it argues that shale gas is good because it will displace coal as a fuel for electricity generation and so reduce emissions.  They believe that a flourishing shale industry would be bound to breach the UK’s carbon budgets, set under the Climate Change Act 2008.  Essentially, they see the UK’s apparent shale reserves as a prime example of “unburnable carbon“.  The Committee also express concern about the uncertainty surrounding some other impacts of fracking, e.g. on water, and cite “a lack of public acceptance” for the technology.  They conclude that “a moratorium on the extraction of unconventional gas through fracking” is required to “allow the uncertainty surrounding environmental risks to be resolved”.

By a further happy coincidence, The Guardian simultaneously published a leaked letter from George Osborne to Cabinet colleagues on fracking.  The letter demonstrates in some detail the extent of the efforts being made by central Government to ensure that it does everything that it can properly do to facilitate consent for fracking through processes that it does not entirely control (because planning and other consents are administered by local government or the Environment Agency).

Finally, in the days between the end of the Committee sessions and the debate, there was a slow drip-feed of anti-fracking amendments being published and trailed in the media – and Vivienne Westwood and others turned up to protest outside Parliament on the day.

The main event

In the end, as often happens, the debate itself was something of an anti-climax.  The Government used its control of the House to confine the debate to less than two hours, which was followed by votes on a more or less representative sample of the amendments.  Some of the debate generated (in participants’ own words) more heat than light.  Attention was paid to the fate of a report by Defra on the impact of shale gas on the rural economy, which has so far been published only in redacted form.  Some suspect that the Government is suppressing unwelcome analysis.  Ministers have done little to dispel this by saying that the report should not have been produced, is not analytically robust and would not help the debate.  A fair amount of time was also devoted to the question of whether or not MPs had received a copy of a letter from a Minister following up on an earlier debate.

But there was also a considerable amount of substantive discussion.  For example, the arguments from the EAC report were rehearsed, and rebutted by a number of speakers, who pointed out the continuing importance of gas to our heating, as well as electricity generation needs, and that the life-cycle carbon emissions of LNG (on which we are likely to depend in the long-term if we do not find new sources of indigenous gas) have been found to be higher than those associated with shale gas.

The question of further devolution of powers to Scotland was also raised: if legislative competence for the licensing of onshore oil and gas exploration and extraction is to be devolved to the Scottish Parliament, as the Government has proposed following the recommendations of the Smith Commission, should the Government not wait before awarding further licences in Scotland?  Unsurprisingly, Ministers were not persuaded by this view.  After all, they are not proposing to devolve the actual granting of licences to the Scottish Government.

If you don’t want to know the result, look away now…

In the end, only two substantive amendments have been introduced into the Bill in relation to shale gas as a result of yesterday’s debate.

  • A Government amendment requiring the Secretary of State to request the Committee on Climate Change (CCC) to provide advice on the impact which “combustion of, and fugitive emissions from, petroleum got through onshore activity” is likely to have on the Secretary of State’s ability to meet the Climate Change Act duties to reduce greenhouse gas emissions by 80% by 2050 and to meet each of the carbon budgets set under the Act in the meantime.  Future Governments will be obliged to report on the conclusions they have reached after considering the advice of the CCC – a sort of “comply or explain” mechanism.
  • As was expected, the Government allowed a Labour front bench amendment to pass.  The intention of the new clause it introduced is said to be: “to ensure that shale gas exploration and extraction can only proceed with appropriate regulation and comprehensive monitoring and to ensure that any activity is consistent with climate change obligations and local environmental considerations”.  Politically, accepting the new clause was clearly the expedient course.  From a legal point of view, it may cause more problems than it solves.

The new clause lists 13 things that must happen before “any hydraulic fracturing activity” can take place in Great Britain.  The list is a mixture.  Some of the pre-conditions it sets reflect existing legislation – for example requirements to carry out an environmental impact assessment; for planning authorities to consider the cumulative impact of fracking proposals in a given area; and to seek Environment Agency approval of fracking fluids.  Others include monitoring of the site for 12 months before fracking begins; “site-by-site measurement, monitoring and public disclosure of existing and future fugitive emissions”; independent inspection of well integrity; avoidance of groundwater source protection zones; a statutory requirement for the kind of community benefit schemes the industry has already promised; bans on fracking in “protected areas” (undefined), or at depths of less than 1,000 metres; and notification of residents in the area “on an individual basis”.

The House of Lords will now have an opportunity to consider the amendments made by the Commons.  Unless some changes are made to clarify the less tidy parts of the new clause’s drafting, uncertainties over what it requires may lead to a moratorium on GB fracking by the back door if and when the new clause comes into effect.

, , , , , , , ,

UK Parliament votes against moratorium on fracking – but there may be a catch

Devolution of energy consents proposed for Wales

The Silk Commission, set up to consider possible changes to the powers of the devolved government in Wales, have recommended a new division of responsibilities between UK and Welsh Ministers as regards the consenting of energy projects (click here for their report).  The Commission propose that “responsibility for all energy planning development consents for projects up to 350 MW onshore and in Welsh territorial waters should be devolved to the Welsh Government”.  This would bring Welsh Ministers closer to parity with their Scottish counterparts in energy consenting: they have long complained that there is no good reason why proposed generating stations with a capacity of more than 50 MW should be determined by UK Ministers if they are Wales, but by Scottish Ministers if they are in Scotland.  Although the proposal is not tied to particular technology types, sub-350 MW schemes are always likely to be renewables projects.

As in many parts of the UK, new renewable developments are not always popular in Wales.  In Wales there have been particular problems as a result of the relevant Welsh Government planning policy document, TAN 8, which encouraged developers to focus their proposals for wind farms on a number of designated areas.  So, in Powys, for example, a conjoined public inquiry is currently being held (on behalf of the Secretary of State for Energy and Climate Change) into five proposed wind farms with a combined capacity of several hundred MW.  As well as being unpopular with local residents, this kind of concentration of development in a given area presents major logistical problems for developers: the capacity of the road networks to cope with the large numbers of outsize loads that would need to be transported on them to build the wind farms is severely constrained in the largely rural areas involved.

Under the Commission’s proposals, Welsh Ministers would have to deal with the consequences of TAN 8 as decision-makers on individual applications.  But UK Ministers have so far been very reluctant to give up their decision-making powers over larger Welsh wind projects, even though the objections to them are not confined to Wales itself: the proposed line of pylons that would carry power from mid-Wales wind farms to the Grid in England would pass through Shropshire and has excited plenty of opposition on the English side of the border.   Whilst the Commission’s overall plan is for new primary legislation on Welsh devolution by 2017, they point out that the competence of the Welsh Assembly could be expanded by secondary legislation on a shorter timescale.  However, it seems unlikely that any action will be taken that would result in Welsh Ministers, rather than the Secretary of State, determining the five Powys applications.

The Commission also recommend giving Welsh Ministers the power to approve “associated development” such as roads and substations as part of a development consent order for a “nationally significant” generating station under the Planning Act 2008.  At present, absurdly, this can currently be done for English, but not for Welsh projects, meaning that the supposed “one-stop shop” provided by the 2008 Act for consenting complex projects is nothing of the kind in Wales.

In a politically charged area where there are probably no perfect solution, the Commission’s proposals deserve serious consideration.

, , ,

Devolution of energy consents proposed for Wales