Making Fracking Easier

MAKING FRACKING EASIER: A RECENT CHANGE IN ENGLISH PLANNING LAW By Paul Stafford Introduction On 13 January 2014 government regulations simplified the process for granting planning permission to energy companies for fracking operations. This was a significant change to the law but appears to have received little scrutiny in Parliament because the legislation in question was effected by statutory instrument: The Town and Country Planning (Development

Management

Procedure

and

Section

62A Applications)

(England)

(Amendment No. 2) Order 2013 (S.I. 2013/3194). The Order does not apply to Wales.

Paragraph 2(4)(b) of the Order dealt with amendments to the Town and Country Planning (Development Management Procedure) (England) Order 2010 as follows: In the case of an application for planning permission for development consisting of the winning and working of oil or natural gas (including exploratory drilling) – (a) the applicant is not required to serve a notice under paragraph 2(a) [of Article 11 of the 2010 Order] in relation to any land which is to be used solely for underground operations.

The reference to paragraph 2(a) of Article 11 of the 2010 Order was to a notice which had to be served on an owner or tenant ‘of any of the land to which the application relates.’ That notice no longer has to be served.

Planning and property law in the light of Cuadrilla’s operations at Balcombe The background to this change comes from the experience of drilling operations at Balcombe in Sussex in 2013. The energy company, Cuadrilla, had a government licence to explore for, 1

win and work oil and for that purpose applied for planning permission in January 2010 from the West Sussex District Council to drill an exploratory borehole. The boundary of the original planning application covered an area of 1.36 acres, which was the above ground drilling site. The exploratory process involved drilling up to a depth 4,700 feet, washing the well to clear it of debris and then flushing the well. Modern drilling technology provides not only for vertical drilling but also for directional drilling where the pipe, sunk vertically to a particular depth, is then directed laterally towards the point where it is believed that oil (or gas) is located. It is the directional drilling, which may extend several miles or more, which takes the pipe on its underground journey away from a location immediately beneath the drilling site and beneath land owned by others. Those others, who are the immediate and more distant neighbouring landowners, may not have given consent for drilling operations beneath their land and may not even be aware of them.

At the time of Cuadrilla’s application of January 2010 the law stood on the basis of the Court of Appeal’s decision in Bocardo v Star Energy [2010] Ch 100, which held that the freehold title of the surface owner to land did extend downwards to strata in which deep drilling for oil took place. That drilling therefore amounted to trespass but the damages payable for trespass in those circumstances were nominal because the oil itself was vested in the Crown and because the enjoyment and use of the land by the surface owner remained unaffected.

Since planning law is public law, the view could be taken for planning application purposes that if a neighbouring owner’s use and enjoyment of land is unaffected by deep-drilling operations, then there is no need for him to be notified of possible or intended operations as part of the planning process. However, as a matter of private law, the surface owner will have suffered a trespass if drilling has occurred beneath his land without his consent, and he may be entitled to an injunction from the court to prevent the trespass. If he knows in advance that the trespass is likely to occur because he is aware of a planning application for exploratory drilling on neighbouring or nearby land, then he may decide on pre-emptive action by asking 2

the energy company for an undertaking not to drill beneath his land failing which, he may say, he will apply for an injunction. Such a request puts the energy company in a difficult position because geo-engineering technology has not yet reached the point where the location of a 6 to 12 inch borehole several miles below ground can be identified with pinpoint accuracy. Depending on the size of his plot, an individual owner may have difficulty in proving that there is likely to be or has been a trespass beneath his land; but a group of owners acting together should have less difficulty provided the general direction of the lateral drilling is known.

Cuadrilla was unfortunate at Balcombe in that it was prospecting for oil, not gas, and there seems to be no evidence that the exploratory process had reached the stage where it had made an operational decision for fracking. However, the fracking which certainly had taken place during its exploratory drilling for shale gas in Lancashire in 2011, and which had apparently resulted in two minor earthquakes measuring 1.5 and 2.2 on the Richter scale, was enough for protesters to think that fracking was on its agenda at Balcombe. After a summer of protests, Cuadrilla announced on 3 September 2013 that it had decided to submit a new planning application ‘to cover the flow testing of the horizontal oil exploration well’ with revised planning boundary lines showing the extent of the horizontal well being tested. It added that ‘it is not planned to include additional drilling or any hydraulic fracturing’. The decision to make this new application, Cuadrilla said, ‘is to resolve any potential legal ambiguity around how the planning boundary should be drawn for a subsurface horizontal well’.

The government’s proposal to change planning law The Explanatory Memorandum to SI 3194 says that for a horizontal well which involves directional deep drilling it is often not possible to identify exactly the drilling route so that the proposed area of development necessarily has to be drawn widely to ensure it is broad enough to cover any potential route the pipe may take. ‘A widely drawn area would necessarily require the notification of significant numbers of owners.’ What the 3

Memorandum does not say but what is implicit is that such drilling in residential areas would mean that hundreds if not thousands of property owners could have pipes running beneath their land. Notification to those owners by letter from the local authority that such an application had been made would invite comments on the proposal, the majority of which would probably be hostile.

No doubt with this last point in mind, the government in September 2013 published a consultation paper setting out its proposals for revised requirements relating to planning applications for onshore oil or natural gas. The paper invited comments on its proposed approach to notice requirements for planning applications for underground operations for onshore oil and gas extraction. There were 162 responses. Those in favour of the proposed changes were largely from industry and other private sector organisations. Those against were from NGOs, local authorities (of whom no more than 9 responded), and individuals who felt that the proposal would risk landowners being left unaware of sub-surface activity beneath land they owned and would encourage trespass.

Following the consultation, the government decided that the form of notification for deep underground development does not need to be given by individual notices to each landowner.

It would be sufficient if notification were given by a notice in a local newspaper or on a local site notice in each parish in which the land is situated. Hence the change in law effected by SI 3194.

Implications of the change While the rationale behind the change is clearly one of administrative convenience for central government in trying to speed up the planning process for onshore fracking, there remain serious doubts about both its effectiveness and its wisdom.

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(1) Transparency

First, it undermines the transparency of the planning application process. It does not make the process secret; but, by restricting the scope of notification, it requires property owners to be perpetually vigilant in looking out for planning applications. Once those applications are seen and understood, there is a probability that they will generate a degree of objection whose extent will depend on the number of people affected and where antagonism will be fuelled if inadequate notification has been given. In those circumstances, the protests so far seen at Balcombe may turn out small beer.

(2) Local Authorities

Second, SI 3194 has major implications for local authorities. If a local authority receives a planning application for an oil or gas development involving fracking which it does not put to those whose land may be subject to trespass if the application is approved, it is likely to be criticised by its taxpayers and constituents. That criticism may take legal or illegal form.

Where legal, an application could be made for judicial review on the basis that those whose land would be subject to trespass by drilling or fracking operations were given no adequate opportunity to state objections and provide information before the application was approved.

Where illegal, direct action in the form of popular protest is expensive for local authorities because of policing costs – reported in the case of Balcombe to be about £2.5m.

What is striking about the change of law contained in SI 3194 is that it is permissive and not mandatory. ‘The applicant is not required to serve a notice….’ This is different from saying that the applicant is required not to serve a notice. It leaves local authorities able, if they wish, to take such measures as they think fit to notify property owners of the application.

Where, as here, the law provides discretion, it will be the policy of the local authority – i.e. councillors taking into account the advice of senior management – which will determine how 5

the discretion is exercised and whether property owners are individually notified or not. Other persons who could, and perhaps should, be notified include lords of the manor who may not own land but own mineral rights beneath it which could be affected by fracking operations.

Next change – the law of trespass?

It is important to see SI 3194 in the context of a continuing policy of government support for onshore gas development through fracking as a means towards achieving UK energy security.

Recent reports in the press have stated that the government is considering the introduction of proposals to amend the law of trespass. The issue of trespass remained live in Bocardo when it went on appeal to the House of Lords. The energy company argued that the property rights of a surface owner did not extend so far beneath the surface of the ground that trespass was caused by deep drilling operations under his property. But the House of Lords disagreed: see [2011] 1 AC 380. Lord Hope asked whether English law had any place for the latin tag: ‘cuius est solum, eius est usque ad coelum et ad inferos’ (the owner of the land is entitled to the surface itself and to the sky above it and everything below it.’ He thought the tag retained value, although it had ceased to apply to the use of airspace above a height which may interfere with the ordinary use of land. The common law rights of property owners as explained in Bocardo and the law of trespass are central to the legal basis for objection to planning applications involving directional drilling and fracking. Any future proposal to legislate amendments to those rights or to the law of trespass is likely to prove hugely controversial.

Paul Stafford is an equity lawyer with a chancery and commercial practice which has an emphasis on litigation and includes a substantial amount of advisory and drafting work. He is highly regarded for his expertise in manorial rights and fracking matters. www.tenoldsquare.com clerks@tenoldsquare.com 020 7405 0758

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