Shale blockade will fail

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We noted in our January fracking update (2014 – Year of shale for planners) that activist owners and interest groups are looking for ways to use the law of trespass to defeat shale gas exploration.  We also highlighted the likelihood that Celtique Energy’s conventional drilling proposals at Fernhurst would become a test bed for the use of statutory access rights under the Petroleum Act 1998.

Legal blockade

Lord Cowdray and others have now written to Celtique claiming to have established a ‘legalshale blockade’ around its drill site, by denying permission for subterranean drilling. Their lawyers describe it as “totally surrounded”, making fracking “impossible”.  Whilst it strengthens the short-term case for an injunction (albeit that Celtique have not sought permission for fracking), its genuine benefit is unclear.  Section 7 of the Petroleum Act allows holders of Petroleum Exploration and Development Licences (PEDLs) – like Celtique – to obtain rights needed to implement the PEDL.

These ancillary rights include surface and subterranean wayleaves as well as abstraction, drainage and construction rights.  Applications are made to the Department of Energy & Climate Change in the first instance and following its approval are dealt with by the High Court.  Unusually, the High Court deals the qualifying criteria and the compensation due where they are met. One criterion relates to efforts to negotiate with owners – and it is satisfied where they unreasonably refuse to grant rights or demand unreasonable terms.

Making life easier?

The Fernhurst owners’ “legal block” letter is intended to frustrate the purpose of the statutory PEDL regime – exploitation of domestic petroleum reserves.  As such, the letter arguably makes Celtique’s life easier, by establishing a strong case for the grant of compulsory wayleaves without the need to undertake long-winded negotiations with the owners.

Trespass changes

The Government is now looking at changing the law of trespass to reduce the scope for such disputes.  Given the existence of statutory rights for PEDL holders, it would be more transparent if they simply focussed on expediting the court process as and when needed. That has been the ultimate conclusion on Judicial Review of planning permissions.

Application credentials

A resident is also challenging the planning authority’s ability to continue to determine the Fernurst application (which does not seek approval for hydraulic fracturing), on the basis that the ownership certificates submitted with it were wrong. Applicants should be wary of submitting applications with defects in the ownership notices.