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Fracking - locations and legals

21st March 2014

Fracking – locations and legals

Energy firm Cuadrilla have recently announced their intention to apply for planning at two more exploration sites in Lancashire but how easy is it for energy firms to obtain permission to carry out such a controversial practice?

Hydraulic fracturing (or “fracking”) involves the extraction of methane gas from layers of shale by pumping high pressure water down a well.  The potential effects on the environment and its links to seismic activity has led to homeowners in areas affected by fracking are becoming more vocal about their views on the topic, particularly since the government have indicated that it may alter trespass law to make drilling under property easier for companies.  What is not so well-known however is the number of hoops that the energy companies have to jump through before fracking may take place.  Licences are required from the Department of Energy and Climate Change (“DECC”), Local Authorities, the Minerals Planning Authority and possibly the Coal Board and these are far from simple to obtain.  Conditions can be attached to Licences and any planning permissions must go through the usual public consultations, a process which can be dragged out by opposition.  It is not until these Licences have been obtained that negotiations can even commence with landowners.

So where do landowners stand?  If they refuse to willingly grant rights, energy companies may still be able to obtain “compulsory” access rights using a special statutory procedure although they must be able to show that it was not reasonably practicable to obtain the same through private negotiation.  Whilst landowners would still be compensated, the level of compensation will be based on their loss rather than the energy company’s gain and they may find that it would have been more lucrative to negotiate directly with the energy company in the first place.  If fracking has commenced elsewhere but ended up under a landowner’s property, case law has shown that this may amount to an actionable trespass but again, any compensation may only be nominal.

The persistence of energy companies to explore the potential of shale gas, together with the support of the government, means that it will not be disappearing any time soon.  However, with the time consuming approvals process and with greater public awareness (the DECC has published a map of all licences held in the UK for example) landowners will have more opportunity to consider their position well in advance of any potential negotiation.

For further information please contact Catherine Wigmore on 01932 590 220 or email catherine.wigmore@mundays.co.uk or another member of the corporate and commercial team.

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