UK: Are Peers Fracked Off For The Wrong Reasons?

Last Updated: 4 March 2013
Article by Angus Walker

Today's entry reports on growing concern about the Growth and Infrastructure Bill's business and commercial project provision.

On Wednesday, the House of Lords will start the 'report stage' of the Growth and Infrastructure Bill, the first of three such days. It is another opportunity for amendments to the Bill to be debate.  The current list of proposed amendments can be found here, and the list contains a number of  government amendments, which will actually be made.

As has been said to me the controversial parts of the Bill are the 'bread in the sandwich', i.e. the first and last substantive clauses, rather than the middle.  The first one is the 'special measures' clause that allows the government to take planning decisions away from local authorities that haven't performed well enough, and the last one allows employees to exchange employment rights for share ownership.  These will occupy most of the debate on the first and third days.

There is growing opposition to one of the infrastructure clauses, however, which will be debated on the second day, 12 March: the clause that allows business and commercial projects to use the Planning Act regime.  But is the opposition misplaced?

In an article in the Daily Telegraph on Saturday, there are reports that peers and a number of environmental groups are opposing the clause on the basis that it would allow the government to 'override local authorities to grant planning permission' for 'fracking'.  Fracking also permeated through the committee stage debate earlier this month, like methane in a rock stratum.

Fracking is short for hydraulic fracturing, which is the process whereby pressurised fluid is used to fracture underground rock and release hydrocarbons. One of the main ones is shale gas, and 'fracking' and 'shale gas' are more or less describing the same issue in the UK.  Sand in the fluid props the rock open and is known as a proppant, there's a new word for you. In the UK, fracking is being tried near Blackpool in Lancashire and was stopped when it was thought to be causing small earthquakes but the promoter  has applied at another site nearby after the Royal Society gave fracking a green light.

Analysis

In my view the opposition to the clause is misdirected, for several reasons.

First, and most significantly, the Planning Act already allows fracking to use its authorisation regime under its current provisions.  The Act currently contains the ability for an application to be made to the government to bring a particular project within the regime, as long as it is in the fields of energy, transport, water, waste water or waste.  Fracking is surely an energy project, so already has the benefit of this provision.

Secondly, the Bill does not mention fracking at all, it allows 'business and commercial' projects to use a similar provision to the one above.  Rather, it will be regulations made under the Bill that will set out which types of projects fall within the definition of business and commercial.  Having said that, it is admittedly more effective and gets more publicity to raise issues during consideration of a bill than regulations.

The government has consulted on the contents of the regulations.  While it has included 'onshore oil and gas extraction' amongst the types of project, which suggests it doesn't think those are energy projects, it proposes a threshold of an extraction rate of 500,000 cubic metres of gas a day.  This is the same as the threshold for deciding whether environmental impact assessment (EIA) is required, and fracking operations are unlikely to exceed it (they may however trigger EIA if the surface installation is likely to have significant effects on the environment).

Thus as things stand, the regulations will make the threshold too high for fracking to be included - were it to come under the business and commercial project heading.

Thirdly, even if it did come within the heading according to the regulations, its promoters would need to demonstrate that it was of national significance to be allowed to use the Planning Act regime, a hurdle that projects currently above the thresholds in the Act do not have to overcome (the rationale being that the thresholds are set at the 'nationally significant' level already).

Fourthly, if a fracking project did fall to be considered under the Planning Act regime, it would no more 'override local authorities to grant planning permission' than a conventional planning application.  If the local authority refused a planning application, the promoter could appeal to the same government that would take the decision on a Planning Act application.

This happened last year in the case of a potential fracking site at Llandow in Wales.  That application was made on 17 August 2011 and the appeal was decided on 6 July 2012 - shorter than a Planning Act application would take and with no 'Local Impact Report' from the local authority having to be taken into account in the decision.  I note in passing the local authority's planning website's echoes of the Hitchhiker's Guide to the Galaxy: vogonline.

If you don't like fracking, you should not be directing your fire at ('so-called') clause 24 of the Growth and Infrastructure Bill.  You should be calling for consultation when applications are made to bring a project within the Planning Act regime so that it doesn't happen without anyone knowing about it (and the National Infrastructure Planning Association has called for at least local authorities to be consulted).

If an application does come under the Planning Act regime, you should use that system to your advantage to demonstrate that the project's adverse impacts outweigh its benefits, which is the test the decision-maker has to take.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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