Frack to the future? Two cases test the current regulatory framework on fracking
Fracking is frequently seen as a potential solution to safeguarding the UK’s energy supply. However, fracking proposals are always surrounded by controversy and their impact on the locality, especially from an environmental perspective, generates intense debate, motivated by strong views on all sides.
Fracking is the technique used to release and exploit natural gas trapped in shale rock. The process involves drilling into the earth and injecting a high-pressured mixture of water, sand and chemicals to release the gas trapped in the shale rock. The term ‘fracking’ refers to how the shale rock is fractured apart by the high pressure mixture. It has been widely regarded as having transformed the energy market in the US.
In contrast, the fracking industry in the UK remains in its infancy. However, a survey by the British Geological Survey estimated that the total volume of gas in the Bowland Basin shale (covering large swathes of Northern England, the Midlands and parts of North Wales) alone is some 1300 trillion cubic feet. This equates to around 500 years of gas supply for the UK. Shale rock is also prevalent in other areas of the UK, such as South East England and Scotland.
In this update, we examine where we are now in relation to fracking, in the wake of a number of High Court cases, and the further uncertainty instigated by the triggering of Article 50 and compounded by the fallout from the General Election in June 2017.
What is happening on the political landscape?
The Conservative manifesto for the recent General Election maintained their antecedent position to support the advent of fracking as a means of improving UK energy security and stimulating the economy. It pledged to seize opportunities presented by new technology and hailed the discovery and extraction of shale gas as a ‘revolution’ which could help reduce carbon emissions, reduce reliance on energy imports, lower prices for consumers and play a crucial role in rebalancing the UK’s economy.
The manifesto made a number of promises, including legislation to change planning law for shale applications to ensure that non-fracking drilling will be treated as permitted development. It envisaged that major shale planning decisions would be made the responsibility of the National Planning Regime. It also proposed to set up a new Shale Environmental Regulator and make amendments to the previously proposed Shale Wealth Fund, to ensure a greater percentage of the tax revenues from shale gas directly benefit the communities that host the fracking operations.
However, the other mainstream political parties (as well as the DUP and the Green Party) do not share this vision. Labour and the Liberal Democrats both oppose fracking, and in 2015 the SNP implemented a moratorium on fracking in Scotland, while a comprehensive consultation process was carried out (a decision was previously expected in the second half of 2017 on the future of fracking in Scotland). There are also significant obstacles to fracking in Wales and Northern Ireland.
Consequently, for now, given the Election result, it remains likely that there will be continued opposition to any further legislative changes in respect of fracking for the foreseeable future. Indeed, the issue of fracking remained conspicuous by its absence from the Queen’s Speech. Of course, the legislative agenda for the next 18 months is also likely to be dominated by the UK potentially leaving the EU.
Recent case law update
As discussed in the 2016 Winter Edition of Agricultural Lore, there is already a fairly extensive regulatory framework, that governs fracking and has seen it emerge as a prospective energy source for the UK. The emergence of fracking has led to a number of cases where proposed fracking operations have been scrutinised by a Court. We analyse the impact of two recent decisions below.
R (Friends of the Earth Ltd) v North Yorkshire County Council
The case of R (Friends of the Earth Ltd) v North Yorkshire County Council  EWHC 3303 (Admin) provides useful guidance on the extent of a local council’s duties and the Court’s approach to fracking decisions made by local councils.
In May 2016, North Yorkshire County Council granted planning permission for fracking by Third Energy at a site at Kirby Misperton in Ryedale. Following that decision, on 8 July 2016, an environmental campaign organisation, Friends of the Earth and an unincorporated association comprising of local residents, Frack Free Ryedale, applied to the High Court for a judicial review of the planning permission.
In short, the High Court held that the Local Council had properly considered the effect on climate change when considering the environmental impacts of the proposed fracking. It also found that the Local Council had acted lawfully in exercising its discretion in imposing restoration and aftercare conditions, and deciding not to seek a financial guarantee from the fracking operator.
The Court reiterated the planning guidance that a financial guarantee to cover restoration and aftercare costs will normally only be justified in exceptional cases. On the facts, the Court held that the terms of the various planning conditions afforded a considerable degree of protection to residents and that the conditions extended beyond mere restoration to a programme of aftercare, in accordance with the planning guidance. Accordingly, it was not an exceptional case. The Court therefore dismissed the judicial review application.
The general consensus is that landowners should not be held responsible for environmental issues derived from fracking operations on their land. The responsibilities regarding restoration and aftercare of the land should lie with the fracking operator and should be thoroughly addressed in the planning process. Provided that planning authorities adequately consider and secure the restoration and aftercare of a site, through the implementation of appropriate planning conditions, and where necessary, planning obligations, then there is no requirement for a financial guarantee to be provided by the fracking operator. Planning conditions should be written in such a way that, even if the interest of the organisation applying for planning permission was subsequently disposed of, the restoration would still be fulfilled, either by a new operator or by default, the landowner.
Further, in upholding the right of the Local Council to exercise its discretion, the case also indicates that the Courts are concerned only with the legality of the planning authority’s decision; not the merits of the planning permission itself. The Court’s role is to review the way a planning authority reaches its decision, rather than to pass judgment on the planning issues themselves, unless it can be argued that a decision is so unreasonable as to be irrational or perverse. This is a difficult argument to win in Court, as the threshold for irrationality is very high.
R (Preston New Road Action Group) v Secretary of State
More recently, in April 2017, the High Court in R (Preston New Road Action Group) v Secretary of State  EWHC 808 (Admin) dismissed a challenge against a decision in October 2016 by the then Communities and Local Government Secretary, Sajid Javid, granting Cuadrilla planning permission for fracking test drilling in Lancashire.
The decision by the Secretary of State overturned the earlier decisions of Lancashire County Council to refuse planning permission for exploratory developments on a number of sites near Blackpool. The Secretary of State overturned the Local Council’s decisions on the grounds that the Council was wrong to refuse the application due to the visual impact and noise concerns.
A community group, Preston New Road Action Group and a professional clown and campaigner, the ironically named Gayzer Frackman, had applied to the High Court for statutory review of the Secretary of State’s decision under section 288 of the Town and Country Planning Act 1990 (a similar procedure to judicial review).
The Claimants based the application on the Secretary of State’s decision being unfair and unlawful, and argued that the decision was fundamentally flawed in its misapplication of planning laws and policy. They also claimed that the Secretary of State did not properly consider the disproportionate effect that fracking on the proposed sites would have on community residents. In addition, the Claimants argued that the plans had not properly considered climate change from the extracted gas being burned. The Court dismissed the applications and refused to grant permission for statutory review on the basis that none of the Claimants’ grounds to be argued were made out in substance.
Unlike the Friends of the Earth decision, the decision of the High Court has been appealed. Lord Justice Jackson has now granted Preston New Road Action Group permission to appeal the High Court’s earlier decision to the Court of Appeal.
The appeal is based on four grounds, namely that the Secretary of State and the Planning Inspector made errors of law by:
• misinterpreting a policy protecting against harm to the landscape
• wrongly applying the National Planning Policy Framework
• denying a fair hearing during the planning inquiry
• using a wildly different test for assessing the impact on the quality of life of those living nearby
A date for the hearing has been set for August. Cuadrilla has confirmed that it will be continuing with operational work at the site. This will include the drilling of two horizontal exploration wells, although the hydraulic fracturing of those wells will not commence before the ruling of the Court of Appeal. Should the appeal fail, the way would be cleared for Cuadrilla to commence the UK’s first horizontal fracking project.
The two cases set a precedent that fracking applications are likely to be approved, as long as environmental concerns are adequately addressed in the planning process. In essence, a local council is responsible, through the planning process, to ensure that environmental concerns, including restoration of the land and impact on climate change, are adequately addressed through the provision of planning conditions, and, if necessary, planning obligations. Both decisions are also a useful reminder of the difficulties of challenging the interpretation of planning policies.
Despite the political hurdles that further fracking legislation faces, it is evident that the current regulatory framework is sufficient to enable the industry to grow. The fracking industry has the Government’s support in moving towards the commercial production of shale gas, but it is likely that, as the industry develops, more challenges, such as those discussed above, will arise.
The growth of fracking operations is likely to affect farmers and other rural landowners in areas of the country where shale rock is prevalent. Where planning permission has been granted for fracking operations to be undertaken, then it would be prudent for both the fracking operator and the landowner to put in place an agreement between themselves that clearly defines their respective obligations; including access, restoration and aftercare, and payment. In particular, landowners should protect themselves against the possibility of becoming liable for restoration works under planning conditions, in the event that the fracking operator is no longer solvent.
A further consideration for agents, landowners and fracking operators, is the adverse impact of protest camps on the land, the local community or the fracking operation, such as the one at Kirby Misperton in Ryedale and Preston New Road in Lancashire. This is particularly a concern for fracking operators, whose ability to raise finance may be harmed by the activities of protest groups.