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Shale gas and fracking

Published Thursday, April 13, 2017

The regulatory regime for fracking in the UK is covered in this note along with comment on environmental concerns. It also covers the new access provisions and debate on fracking in during the Infrastructure Bill’s passage through Parliament.

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The rapid development of shale gas resources in the US has transformed the world gas-market outlook. Despite this, the consensus was for a long time that shale gas would not be a ‘game changer’ in the UK as it has been in the US. This is because the UK has less land available to drill on and landowners do not own the rights to hydrocarbons beneath their land. Additionally, opposition from local communities and environmental groups is strong.

The current state of fracking in the UK

Shale gas drilling in the UK is still at an exploratory phase – no commercial operations have yet been authorised and a lengthy application process must be completed before commercial drilling could start. However, the recent approval of two planning decisions in Lancashire and North Yorkshire suggest that the UK is getting closer to commercial shale gas exploitation:

  • In May 2016 the first planning approval for fracking in the UK in five years was granted for Third Energy’s application at Kirby Misperton, North Yorkshire. A judicial review of the application brought by anti-fracking campaigners ruled in December 2016 that the planning approval was legal. Third Energy’s application can therefore go ahead onto the next stage.
  • In June 2015 Cuadrilla’s planning application for exploration at two Lancashire sites – Preston New Road and Roseacre – was rejected by Lancashire County Council. The firm appealed against this decision. In October 2016 the Secretary of State for Communities and Local Government Sajid Javid recovered Cuadrilla’s appeal, thus allowing the application to go ahead onto the next stage.
  • Anti-fracking campaigners sought judicial review of the Secretary of State’s decision on the grounds that it was “not fair or lawful”. On 12 April 2017, a High Court judge ruled to dismiss their judicial review actions on the grounds that none of the arguments had been “made out in substance”.

Planning permission is only one of many steps required for commercial fracking operations to begin in the UK. This means that the two events described above do not mean that commercial fracking will necessarily happen in the sites in question. The regulatory regime for fracking applications is described at length in section 3 of this paper.

What is fracking?

The Government and British Geological Survey published raised estimates of the shale gas resource in Northern England in 2012.

Shale gas is extracted from solid rock using a process called hydraulic fracturing, or ‘fracking’. A number of environmental concerns have been raised about fracking, including the potential for seismic events, air pollution, surface and groundwater contamination, and greenhouse gas emissions.

 Environmental concerns

The Royal Society and Royal Academy of Engineering have reviewed the risks associated with fracking. They concluded that the health, safety and environmental risks can be managed effectively in the UK, by implementing and enforcing best operational practice. However, they also made several recommendations, including calling for more research on the carbon footprint of shale gas extraction.

A report on this was published by the then Department for Energy and Climate Change in September 2013, in which shale gas emissions were said to be similar to those of conventional gas and lower than those of coal and Liquefied Natural Gas (LNG), leading the Secretary of State to describe shale gas as a ‘bridge’ to a low-carbon future. However, the Committee on Climate Change concluded in July 2016 that the implications of shale gas for greenhouse gas emissions are uncertain, and that shale gas exploitation on a significant scale will not be compatible with UK carbon budgets unless tests in relation to emissions, gas consumption, and carbon reductions elsewhere are satisfied.

Recent legislation and licensing rounds

The Oil and Gas Authority is responsible for awarding onshore oil and gas licenses, which include but are not restricted to exploratory fracking operations. These licenses are offered to successful applicants during so-called ‘licensing rounds’. The last round – the 14th Onshore Oil and Gas Licensing Round – closed in October 2015 and resulted in the award of 159 blocks. All the licence blocks are mapped out on the OGA’s interactive map.

The Infrastructure Act 2015 includes provisions to streamline the underground access regime, including horizontal or lateral drilling, and make it easier for companies to drill for shale gas. It also provides a number of new ‘safeguards’. On 16 December 2015 regulations were approved by the House that provide some protection against fracking at depths shallower than 1200m in protected areas. Following a consultation, the Government announced in June 2016 that further protections would be introduced through the licencing process.

The Government has legislated for tax incentives for shale gas exploration, and announced community financial benefits. It is consulting on investment in communities hosting shale gas developments, and on direct payments to households

The Scotland Act 2016 devolved shale gas licensing to the Scottish Parliament, and the Wales Bill 2016-17 includes provisions to devolve shale gas licensing to the National Assembly for Wales. The Scottish Government announced a moratorium on fracking in Scotland in January 2015. In February 2015, the Welsh Government issued a Direction preventing local planning authorities from approving developments which included fracking. The Labour Party announced in September 2016 that it would ban fracking.

Commons Briefing papers SN06073

Authors: Louise Smith; Jeanne Delebarre; Elena Ares

Topics: Climate change, Energy, Environmental protection, Oil, petrol and natural gas, Planning, Pollution

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