UK Shale: Full Steam Ahead For Fracking?

On 6 October 2016, the UK's Secretary of State for Communities and Local Government, Sajid Javid, overruled local councillors on appeal and approved Cuadrilla's plans to explore for shale gas in Lancashire. Cuadrilla has been granted planning permission, which is subject to certain conditions, to drill and use hydraulic fracturing for four horizontal wells at its Preston New Road site. A second opportunity to drill four further wells at its Roseacre Wood site could soon be granted, subject to Cuadrilla providing further evidence on road safety. As applications for both sites were rejected by Lancashire County Council last year, the decision signifies a shift in the political support for shale gas in the UK, although it remains a highly debated topic.

The approval is only the UK's second, and follows the approval granted to Third Energy in May this year to extract shale gas from an existing well (for more details, please see a previous briefing here).

Regulatory developments paving the way for shale

In recent years, incremental changes have been made to the UK's regulatory regime to progressively remove certain legal and practical hurdles to the development of the UK's onshore petroleum resources.

Prior to the entry into force of the Infrastructure Act 2015 ("IA 2015"), companies seeking to drill onshore for shale gas were required to obtain the consent of multiple landowners to gain underground access, often through protracted negotiations, or risk committing trespass1. The IA 2015 amended this position and permits the exploitation of petroleum or geothermal energy in "deep-level land" (i.e. at least 300 metres below the surface) by operators, without the requirement to obtain prior consent of surface landowners. The operator will still be required to obtain a Petroleum Exploration and Development Licence, planning permission and other necessary consents.

The IA 2015 also contains environmental safeguards which were brought into force on 6 April 2016, namely requiring a well consent to impose a condition prohibiting associated hydraulic fracturing2 at a depth of: (i) less than 1,000 metres; and (ii) 1,000 metres or more unless consented to by the Secretary of State (together, a "hydraulic fracturing consent") . A hydraulic fracturing consent can only be issued by the Secretary of State once certain conditions have been met, which include the meeting of: (i) safeguards relating to environmental impacts and health and safety; and (ii)...