UK energy minister may give go ahead to Scottish fracking licences – despite Holyrood moratorium

 

Ewan Macleod, Partner, Shepherd & Wedderburn
Ewan Macleod, Partner, Shepherd & Wedderburn

Scottish Energy News EXCLUSIVE

A potential fracking political time-bomb has been revealed ticking away below the surface of the moratorium on unconventional drilling for shale gas which was announced last month by Scottish Energy Minister Fergus Ewing.

For although the moratorium has prospective – rather than retrospective – effect, there are a number of live licence applications for unconventional shale gas exploration in the Central Belt being considered by the UK Department of Energy (DECC).

These applications were made during DECC’s 14th round of onshore licensing – and before the Scottish Government’s moratorium.

 If the UK government decides to issue licences to such applications, this would spark a heated policy and powers debate between Holyrood and Westminster, as well as having significant impact on the development of the onshore gas industry.

In a confidential briefing note, Ewan MacLeod, a Partner at Shepherd Wedderburn – a prominent Scots law firm – said:

“On 28 January 2015 Fergus Ewing, the Scottish Energy Minister, announced that the Scottish Government will impose a moratorium on granting planning consents for unconventional oil and gas developments in Scotland. The Scottish Government has decided that no further exploration, appraisal or development activity should be approved until further work on the risks and benefits has been completed.

The proposed work includes:

  • A full public consultation on unconventional oil and gas developments in Scotland
  • A full public health impact assessment
  • Further research in order to strengthen planning guidance
  • Consideration of the extent to which environmental regulations require to be tightened

The moratorium is being implemented by way of Directions under The Town and Country Planning (Development Management Procedure) (Scotland) Regulations 2013 under the Water Environment (Controlled Activities)(Scotland) Regulations 2011.

The first Direction requires Local Authorities to notify the Scottish Ministers of any planning application relating to unconventional oil and gas “developments”. It is anticipated that, any future applications will be “called in” for consideration by Scottish Ministers.

The second Direction requires SEPA to refer the determination of any application under the 2011 Regulations to Scottish Ministers for them to determine.

For the purposes of both Directions, unconventional oil and gas “developments” is any development involving onshore exploration, appraisal or production of coal bed methane or shale oil or gas using unconventional extraction techniques, including hydraulic fracturing.

If Ministers intervene in the determination of planning applications they are under a legal duty to determine those applications within a reasonable period of time.

The announcement raises interesting questions as to whether Ministers could simply “sit” on applications until the consultation and research work described above has been completed.

It is difficult to see why a planning application which specifically addresses the issues covered by the first two bullet points (ie full public consultation and full public health impact assessment) in relation to the particular development should be held up while a wider national (and therefore more general) exercise is undertaken.

The announcement of the moratorium comes soon after the publication of draft legislation for the implementation of the recommendations of the Smith Commission for further devolution in Scotland.

If the legislation is enacted, responsibility for onshore oil and gas licensing (whether conventional or unconventional) in Scotland will be transferred to the Scottish Government.

In addition, the Scottish Government will be given responsibility for mineral access rights for onshore oil and gas developments. The Infrastructure Bill (which is currently making its way through the UK Parliament) will give onshore oil and gas licence-holders certain underground access rights in order to carry out operations in the subsurface below 300 metres without consent of the relevant landowners.

The draft Infrastructure Bill has recently been amended so that it will not apply in Scotland.

At the same time as announcing the moratorium, Mr Ewing confirmed that he has written to UK Energy Secretary, Ed Davy, requesting that the UK Government do not issue further (onshore) petroleum exploration and development licences in Scotland.

Given that licence applications for onshore areas in Scotland are currently being considered by DECC as part of the 14th onshore licensing round, it will be interesting to see what approach the UK Government takes to this request.”

* Commenting on a similar fracking moratorium proposed for Wales, Ken Cronin, chief executive of UKOOG, the onshore oil and gas trade body, last night said: “Wales has a great tradition of mining and other extractive industries, so it is hard to understand why anyone would not want to listen to the scientific evidence and economic arguments in favour of natural gas from shale.”

 

 

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