Fracking: Has it got your backing??

Fracking

There has been a lot of media interest regarding fracking and, while most people will have heard of the term, they may not be aware of exactly what it means. In this, the first of two articles, Karen Maddox, assistant solicitor and Tim Coplestone, partner and head of real estate at The Wilkes Partnership explain fracking and why it is hitting mainstream consciousness. In the second article they will explore how UK property law will have to adapt to this new process and how it may affect landowners.

There is considerable pressure on the government to protect UK energy security and it is actively exploring different methods of sourcing energy, including renewables and other resources. It has been estimated that 10% of the UK’s gas needs could be met from the collection of the shale gas found below the UK and, in turn, thousands of jobs would be created. Fracking is something that cannot be ignored. But it brings with it a peculiar interaction with UK property law, which boils down to who owns and is entitled to what.

The exclusive right to the recovery of shale gas belongs to the Crown, as stated in section 2 of The Petroleum Act 1998. However, this right does not extend to the land above or surrounding the gas, which belongs to the land owner.

Karen explains, “Currently, if a land owner decides it wishes to search for and extract shale gas, there is at present nothing to stop them as far as vertical or horizontal drilling on their own land is concerned. Case law confirms that the owner of freehold land owns the surface of their land and everything below and above but, as the benefits of such activity would belong to the Crown, there is no incentive to frack.”

If a third party interferes with the land on or beneath your property without permission this would be a trespass. The Mines (Working Facilities and Support) Act 1966 allows mineral, oil and gas extractors to gain access to private property via a court order,but this is costly.

However, a change in the law is afoot. Tim comments: “On 22 May 2014 it was announced that the Government has identified a number of possible sites in southern England and that energy companies will be allowed to frack under homes without the home owner’s permission. This will be achieved by changing the existing laws in place in relation to trespass to give energy companies the right to frack beneath homes, regardless of whether persmission has been given.”

The Department of Energy and Climate Change issued a consultation paper in May 2014, and in the introduction to ‘Underground Drilling Access’ states “given the potential benefits for energy security, decarbonisation and economic growth, enabling these industries to proceed with exploration is in the national interest.”

So, the lines are being drawn, the Government is proposing to change the law relating to trespass to allow the practice of fracking to proceed without infringing private rights, in so doing dramatically cutting the cost and time to achieve that goal.

It is of little surprise that fracking is controversial.

In the next article, we will analyse how the law might change following consultation, how this may radically change the concept of what “freehold” means and how it could affect you.

If you would like to discuss matters relating to fracking further, please call Tim Coplestone on 0121 233 4333 or email tcoplestone@wilkes.co.uk.

Fracking, the background

Hydraulic fracturing, the correct term for fracking, is a term used to describe the extraction of shale gas from sedimentary shale rock. Sedimentary shale rocks are formed by the accumulation of sediments over many years. Fracking was first tested in the USA in 1947. The process involves drilling holes into the shale rock, first vertically then horizontally, sometimes up to 100 metres from the vertical hole. Fluids are then pumped at high pressure into the rock which creates channels for the gas to flow through into the main vertical hole where the gas is then captured. The UK has been using the technique off shore for approximately 40 years.

One of the key companies involved with fracking, Cuadrilla, argues that as fracking involves the extraction from 300 metres below the surface it will not cause any inconvenience to the land owner. In 2011 an area near Blackpool was used to conduct fracking. During the initial exploration, earthquakes measuring 2.3 and 1.5 were recorded. Other countries who use fracking have also reported similar findings. However, as earthquakes of this magnitude would not normally be felt by the public, it was decided that the UK should continue looking into the use of fracking.

It was announced in early February 2014 that two sites have been identified as key areas for fracking to be carried out within the UK. Planning permissions have been applied for together with consultations with local residents. It is believed that if planning permission and other statutory permissions are granted then work could commence as early as the start of 2015.