UK: Shale Gas Update

Major changes for the 14th onshore oil & gas licensing round

The 14th onshore oil & gas licensing round is live

The UK Government has published application criteria and terms for the 14th onshore oil and gas licensing round, accompanied by new guidance. Many but not all issues of concern to developers and others have been dealt with. The need for planning and environmental input at the licensing stage is also significantly increased.

Application Deadline

Applications for new licences under the 14th round can be made until 2pm on 28 October 2014.

Licence model terms set out in the Petroleum Licensing (Exploration and Production) (Landward Areas) Regulations 2014 are tailored to 'unconventional' oil and gas and include:

  • New 'drill or drop' provisions
  • Extension terms, retention and development areas
  • New 3D horizon splitting concept on surrender
  • Echoes of Wood Review requirements for maximising economic recovery
  • Remaining concerns with confidentiality provisions and  water injection provisions

Environmental Awareness

The DECC criteria introduce a new requirement, for detailed Statements of Environmental Awareness (EAS) to be submitted with licence applications. They are intended to 'demonstrate applicants' understanding of the environmental sensitivities relevant to the area proposed'.

This new requirement reflects the challenges current operators have faced in managing the interface with ecological and other sensitivities. Cuadrilla abandoned drilling operations at its Anna's Road site in Lancashire earlier this year following difficulties with protected species mitigation and Celtique recently suffered the first refusal of permission for shale related operations at it Wisborough Green site in West Sussex, due to concerns over transportation and noise effects. The EAS also reflect the way that the licensing process is now intended to address European and domestic law requirements for assessing impacts protected habitats, to deflect legal criticisms of the licensing process (see below).

New challenges

The EAS now requires applicants to demonstrate a clear understanding of the following (and how they will shape their exploration activity within the license area):

  • UK onshore Environmental and Planning Legislation relevant to exploration, development, production and decommissioning stages;
  • Environmental sensitivities of the licence area – a 100 km2 'Block' – and the options for addressing these in the operational phase
  • Mitigation Measures - how the measures proposed in the Government's Strategic Environmental Assessment (SEA) report (AMEC, December 2013) will be put in place operationally.

The EAS must also contain a context analysis identifying all 'significant' environmental sites in the licence Block (and sufficiently close to it to be affected). 'Particularly comprehensive and detailed' analysis will be required where the area is within or adjacent to any National Park, or the Broads, or any Areas of Outstanding Natural Beauty or World Heritage Site.

Narrowing the data on geophysical, logistical and environmental constraints down to get to a feasible surface access point for fracking in the UK is a challenge. The challenge for licence applicants in preparing a robust EAS will be considerable, given the scale of the Block areas, the scrutiny by national and local interest groups and the fact that the Government is relying on this analysis to discharge Conservation of Habitats and Species Regulations 2010 requirements.

To put the task into context, DECC's 14th Onshore Round Map suggests that the c. 15,000 km2 (c 1.5 million ha) area already licensed will increase by around 104,000 km2 (c. 10.4 million ha). The total licensed area (assuming all the 14th Round licenses were in fact applied for/ granted/ progressed) would be around 50% of the surface area of Great Britain (excluding Northern Ireland) – roughly a seven-fold increase in the licenced area. In reality, DECC is understood to have set an internal target of approving 30 licences (out of around 1,040 available Blocks). Several existing licences have been relinquished in the last few months due, often, to a failure to progress exploration. They may be re-licensed in the 14th Round.

Legal challenges

Responses to the Government's SEA consultation confirm that interested parties are considering legal challenges to both the 14th round and to individual licence awards. There has been criticism of the Government's decision to undertake SEA but not an 'Appropriate Assessment' (under the Conservation of Habitats and Species Regulations 2010).  Its assumptions about the adequacy of the existing regulatory framework for shale development are also under fire. As the written statement to Parliament explains, the Government has decided to address the habitats requirement at the individual licence stage, where greater detail will be available. The new EAS requirement is intended to address this, by ensuring the environmental effects are dealt with robustly.  It means there will, for the first time, be significant scrutiny of the adequacy of environmental assessments by interested parties during the PEDL round.

Related Dentons articles

Shale: A guide to tailoring legislation, SPAs, farm-in agreements and JOAs in developing basins

 
written by Energy Partner Humphrey Douglas

Future Updates in this series will review the implications of the Planning Policy Guidance issued alongside the PEDL application criteria and the further regulatory reforms implemented or needed to ensure shale development is viable.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
28 Sep 2017, Seminar, London, UK

On 26 July the FCA published its long-expected consultation paper on the extension of the SMCR to all FCA-authorised firms. The so-called "core regime" introduces the key concepts of regulator-approved senior managers, firm-approved certification staff and conduct rules applicable to virtually all staff.

3 Oct 2017, Conference, Zurich, Switzerland

As the founding Partner of the Europe-Iran Forum, Dentons Europe will once again support this year’s event. This compelling event which explores all Iran-related topics will take place in Zürich on 3rd and 4th October.

4 Oct 2017, Conference, Munich, Germany

Dentons Global Real Estate Group is delighted to be exhibiting once again at EXPO REAL, the International Trade Fair for Property and Investment which takes place on 4-6 October, 2017 in Munich, Germany.

 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.