Fracking in the Queen’s Speech

This year’s Queen’s speech has now confirmed that Government plans to streamline underground access will, subject to consultation, be provided by a new Infrastructure Bill. The proposals would change access rights for petroleum exploration licence holders to make it easier from them to drill and frack for shale gas beneath other people’s land.

Recovering shale gas by fracking usually relies on horizontal drilling at depth. Gas is released and recovered by pumping water at high pressure into the shale by a borehole. This fractures the rock (hence the name fracking) and gas is released. By drilling out from the borehole horizontally, more of the shale can be exposed to the fracking process and more gas can be recovered.

Under the existing system licence holders do not have automatic rights to drill under landowners’ property and permission should be sought from the landowner before they can do this. If permission is refused then licence holders can apply through the Secretary of State and courts to gain access but the Government considers this route to be too time consuming.

The Government is currently consulting on changes to the current system that would:

  • Grant underground access rights to companies extracting petroleum resources (including shale gas and oil) and for geothermal energy in land at least 300 metres below the surface.
  • A voluntary community payment of £20,000 for each unique lateral (horizontal) well that extends by more than 200 metres laterally. Alongside this will be powers to make such payments compulsory if companies fail to volunteer.
  • A public notification system, under which the company would set out drilling proposals along with details of the voluntary payment.

Infrastructure Bill

The consultation and announcement followed speculation around what a new bill would do for shale gas exploration. On 22 April 2014, the Financial Times reported that an Infrastructure Bill would be included in the Queen’s Speech and would “change trespass laws, allowing companies to drill without permission in return for only minimal compensation to landowners”.  At the same time the Guardian reported on a YouGov survey that found 74% of people opposed changes allowing companies to drill under people’s property without permission. The Government maintains that shale gas can provide a vital contribution to the UK economy and help to provide a secure energy supply.

Amongst other things the Bill would also: provide new controls for invasive, non-native species; change requirements for building zero carbon homes; alter the planning process for major infrastructure; and change the structure of the Highways Agency.

Once the Bill is printed its progress through the House of Commons and Lords can be following online.

Current situation in the UK

The Secretary of State issues Petroleum Exploration Development Licences to recover shale gas through the Petroleum Act 1998. They provide rights to search for, bore for and get hydrocarbons, but do not provide access rights to do this. However, the Petroleum Act allows the Mines (Working Facilities and Support) Act 1966  to be used, which has separate powers so a licensee can acquire other rights, including access, so that shale gas can be recovered. These rights can be granted by the court if it is not practical to obtain them by private negotiation and if this route is used the landowner is entitled to compensation.  The 2011 case of Bocardo SA v Star Energy Ltd established the principles for this.

The House of Commons Library produces a note on Shale gas and Fracking, which provides more background information.

The Government consultation is expected to run until 15 August 2014 and further information on this is available from the following Gov.uk web pages:

Ed White