Header graphic for print
Keeping It Real Estate News and Trends in UK Real Estate, Disputes and Planning Law
Posted in Real Estate News

Frack to the drawing board?

Landowners in the South Downs National Park have hit the headlines recently with their opposition to controversial shale gas exploration in the area. In this blog we ask – have the objectors managed to find a way to plug the shale gas well before drilling starts?

The actions of this local community are as a result of a planning application submitted by an energy company to construct a temporary well site to search for commercially viable oil and gas reserves. The company is likely to drill both vertically and horizontally (into neighbouring land) in its search for the reserves.

In response to the application, the landowners have submitted a letter to the energy company and the Energy Secretary, Ed Davey, to expressly deny permission for horizontal drilling into their land.

It has often been said that the owner of the surface of the earth is entitled to everything below it, down to the centre of the earth. Few realise that Section 2 of the Petroleum Act 1998 establishes a statutory exception that any petroleum deposits (including shale gas) in the UK are the property of the Crown. Consequently a licence is required from the Department for Energy and Climate Change (amongst other consents) to extract the gas and, on the face of it, consent from the owner of the surface is needed in order to drill horizontally to access gas deposits.

The case of Bocardo SA v Star Energy UK Onshore Limited [2011] 1 AC added fuel to the debate as it brought into question whether horizontal drilling at hundreds of metres below the surface could result in a trespass. The Supreme Court concluded that it could. Objectors heralded this as a success for future actions, a means for local landowners to prevent horizontal drilling and hydraulic fracturing (“fracking”) on their land – by obtaining injunctive relief.

However, that is not the end of the matter. A process set out in the Mines (Working Facilities and Support) Act 1966 allows a court to grant rights to energy companies to enter onto private land to search and bore for gas. Importantly, these ancillary rights will only be granted in limited circumstances.  The court will need to be satisfied that it is not reasonably practicable to obtain the necessary rights, for example where landowners unreasonably refuse to grant the rights or demand terms which are unreasonable.

As a consequence, the tension between objectors and energy companies is not going to go away. As the fracking debate continues to heat up, both sides would be wise to tread carefully.