Fracking Issues

6 September, 2013
by: Cripps Pemberton Greenish

Fracking, the process of extracting shale gas using a combination of directional drilling and hydraulic fracturing (pumping water, sand and chemicals deep into the ground at high pressure to create fractures) has been in the news a lot recently.

Concerns have been raised regarding the environmental implications of widespread fracking such as earthquakes, water consumption, water poisoning and greenhouse gas emissions. Reports (from Durham University, The Energy Collective, Department of Energy and Climate Change and The Royal Society and Academy of Engineering) suggest that the public should not be concerned and any environmental impact from fracking is limited. Shale gas extraction is therefore permitted in the UK and it appears that David Cameron is keen for the UK to ‘get behind fracking’.

The Government’s support for fracking was evidenced in a recent HM Treasury paper which included measures to help to get communities behind fracking by approving a scheme to reward communities for their part in the UK’s energy sector. Under the scheme developers would pay £100,000 in community benefits at the exploration phase, per well site, and 1% of revenues to communities that host fracking wells.

A supportive tax regime and improved guidance was also promised and new guidance has already been published by the Environment Agency https://consult.environment-agency.gov.uk/file/2582905 and in relation to planning https://www.gov.uk/government/publications/planning-practice-guidance-for-onshore-oil-and-gas, to clarify the position for potential developers.

Despite the measures to encourage exploration of shale gas, there is currently only one developer (Cuadrilla) that has fracked a well in the UK. Fracking is highly regulated and cannot occur without the proposed developer obtaining a planning permission and several permits and licenses. The legal requirements that a developer must satisfy before it can begin fracking will vary depending on the site and the scale of the operation. Examples of the permissions/licenses/consents that are may need to be obtained are:

· Consents from any landowners whose land would be affected by the exploration (failure to obtain the consent of the relevant landowners can amount to trespass).

  • A Petroleum Exploration and Development Licence.
  • A Planning Permission.
  • Up to nine different Environmental Permits.
  • An Abstraction Licence (if the company intends to obtain water for fracking by extracting it directly from surface and ground water).
  • Written authorisation from the coal authority.
  • Well consent from the Department of Energy and Climate Change.
  • Water Resources Act 1991 notification to the Environment Agency.

Further consents or extensions to the permits are required if a developer then wants to develop and produce shale gas. Fracking is a controversial process – it remains to be seen whether in time, and with the new Government incentives, developers will see a potential in fracking or whether the level of regulation and public opposition to fracking will put off developers from exploring this potential new energy source.

For more information on fracking please follow the links below:- www.environment-agency.gov.uk/business/topics/126689.aspx

www.gov.uk/government/publications/shale-gas-and-hydraulic-fracturing-briefing-note