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Fracking guidance out…but is it earth-shattering or groundbreaking?

On 19 July the government published keenly anticipated guidance on how onshore oil and gas developments are to proceed through the planning system. Keenly anticipated because of the proposals on fracking, a controversial process involving drilling down into the earth before a high-pressure mixture of water, sand and chemicals is injected into the rock to release the gas inside.

The British Geological Survey estimates that the Bowland Hodder shale area (which extends from the Lancashire Coast to Scarborough) holds 1,300 trillion cubic feet of gas and further work is taking place to determine the scale of reserves in the Weald Basin. With these levels of potential energy resources, it is hardly surprising that the guidance was so eagerly awaited.

In practice though, little of the guidance is controversial, with much of the content simply informative as opposed to directory. What is clear is that the National Planning Policy Framework and other existing planning policies will continue to form the framework for development control decisions.

Importantly, given the recent focus on the inherent disconnect between the localism agenda and the need to ensure delivery of key infrastructure, the guidance does not bring shale gas development within the major infrastructure planning regime.  Planning permission for such development will be determined at the local level.  Further, the guidance is quite clear in encouraging Local Planning Authorities to make appropriate provision for onshore oil and gas development in local plans.

With Water UK, the industry body representing UK water companies, already warning on the risk to water supplies of extended exploration, it is clear that decision makers will face difficulties reconciling competing agendas.

A potential area for conflict will be the interplay between the planning system and other regulatory regimes (such as the licensing regimes administered by the Department of Energy & Climate Change and the Environment Agency), with Local Planning Authorities able to rely on assessments produced by other bodies, but only to the extent they are satisfied the relevant impacts will be adequately addressed by such bodies.

Perhaps the government’s position on fracking is most clearly demonstrated by the announcement that there will be a new tax regime for shale gas operations, with a massive reduction in tax paid on the income from 62% to 30% at current rates. Despite objections from environmental groups, with these changes in place, it is clear that the government wants to keep shale gas exploration high on the agenda. At present, the future of energy is fracking.