Fracking – Fast Track to Frack

Fracking

Following on from their first article “Fracking-Has it got your backing?” Tim Coplestone, partner and head of real estate at The Wilkes Partnership, and Karen Maddox, assistant solicitor in the real estate department, explore how UK property law will have to adapt to accommodate the process of fracking, highlight potential environmental issues and consider how this could affect us locally in the West Midlands.

As outlined in our previous article, if a third party interferes with the land on or beneath a property without the owner’s permission, this would be a trespass. The dictionary definition of trespass is: “A wrongful direct interference with another person or with his possession of land or goods.” Trespass of land is to enter land without the owner’s permission.

It is stated in the introduction to the government consultation on proposals to reform the procedure for gaining access to oil or gas deposits and geothermal energy ‘Underground Drilling Access’, (https://www.gov.uk/government/consultations/underground-drilling-access) “We believe that underground horizontal drilling at the depths relevant for shale or geothermal would not have any negative impacts on the landowner’s use of the land. We consider that in addition to the planning system, the environmental and health & safety regulatory regimes provide the necessary protection for individuals, not the existing law related to underground access rights concerned here.”

At present drilling companies must seek permission from all the owners of the freehold interests above mining operations (including horizontal shafts) for rights of access for underground drilling, even though the works are carried out far beneath the surface level. Karen comments: “The fundamental issue with the current legal system is that it gives a single freeholder the power to delay or even prevent a potential fracking site, regardless of how the rest of the community feel, even though the drilling and use of the underground wells may not affect their enjoyment of the land.”

But, proposed changes to the law announced by the Department of Energy and Climate Change (DECC) will allow drilling companies to access horizontally below land without the owner’s permission. A date has not been stated yet for the changes to come into effect– but it is believed that it will be pushed through as soon as possible to enable companies to start fracking early next year. Companies will still need to seek permission of the land owners to gain access at the surface for the footprint of vertical drilling operations, but once this permission has been obtained, companies can then drill horizontally without the requirement of the permission of the freeholders. The time and cost savings for drilling companies are obvious. But, this fundamentally changes the landscape of freehold land in the UK where the owner owns the surface, the airspace above and the ground below.

Tim comments: “Surface activities are likely to create disruption to the residents of the local area to the fracking site. It isn’t just the mining operations to consider, but the infrastructure to support such activity, increased road traffic, perhaps even new pylons and power connections local to the site.” For this reason it has been proposed that local communities affected will be entitled to £20,000 in the form of a one-off compensation payment. This would be on top of the £100,000 per site previously announced and is specifically designed for those living above horizontal pipes. In return for the payment, access to the ground under properties within that area for each horizontal well over 200 metres in length will be granted. Drilling companies have already confirmed that they are to give 1% of revenues from any successful wells to local communities. How that works in practice remains to be seen.”

The Government announced on 28th July 2014 that licences would only be issued for beauty spots, National Trusts and Areas of Outstanding Natural Beauty in “exceptional circumstances”. Karen comments: “The Government has not defined what an ‘exceptional circumstance’ would be. It is questionable whether they have used this ambiguous phrase so they can circumvent the issuing of such licences if they see fit. For example, would the mere fact that large quantities of shale rock be present at one of these sites be deemed to be an exceptional circumstance? ”

There are concerns for the environment of the areas surrounding the sites. There have been reports of water contamination around fracking sites in the USA, together with the uncontrolled release of methane gas. There is also a need to treat and dispose of the water used in the fracking process as it may contain pollutants. These could lead towards nuisance claims being brought against the exploration company, due not only to the nuisance of escaped gas or other contaminates, but also noise or vibration. In the USA it is being argued that not enough is known about the potential harm to health from fracking. A further issue is the risk of depleting water supplies in drought-prone areas, due to the high volume of water required during the process. As we are well aware, fracking has caused a number of protests within the UK that have halted works; moreover, a number of countries have decided not to use fracking, including France, Germany and Tunisia.

Dart Energy, one of the key players in the UK fracking industry, believes that from a technical perspective the West Midlands is not an attractive area for fracking to take place, as their studies have revealed that it is unlikely the area will be a significant player in the production of unconventional gas.

Karen comments: “So far, councils in the West Midlands have not received applications for fracking. Staffordshire County Council has stated that they would be open to applications. For an application to be granted, the normal channels for planning permission must be adhered to. It is, therefore, imperative that land owners keep up to date with local planning applications so they can object to the application.”

The pursuit of energy security has been and will continue to be a major goal for the governments of the future. And, it is without doubt a political hot potato that parties of all persuasion will jostle with. The lines are being drawn between the economic arguments: wealth, energy and job creation, and the environmental argument. The Government has made the economic argument and changed UK land law to empower drilling companies and put them on the fast track, yet at the same time keeping one foot in the environmental camp with its concession on Areas of Outstanding Natural Beauty.

If you would like to discuss fracking and how it could affect you, please call Tim Coplestone on 0121 233 4333 or email tcoplestone@wilkes.co.uk.