Government comes down from the fence on Fracking

Cuadrilla was given conditional permission on 24 July 2018 to move ahead with hydraulic fracturing of one of 2 horizontal wells at its Preston New Road site in Lancashire. This move by the Government will allow Cuadrilla to become the first company to frac a well in the UK (planned for Q3 / Q4 this year) since the industrial process was banned in 2011.

The decision to grant Hydraulic Fracturing Consent (“BEIS Consent”) was delivered by Claire Perry MP, the Energy and Clean Growth Minister, for the Department of Business, Energy and Industrial Strategy (“BEIS”). The green light to frac the existing well at Preston New Road comes after a long planning process for Cuadrilla (starting before 2014). That process has included various planning rejections (despite approval recommendations from planning officers and the receipt of regulatory approvals from the Environment Agency and others), public inquiries into those planning decisions, intervention by the government to restart the planning process and approval for judicial review of the decision of the local authority. Final planning approval for drilling was received in October 2016 in an atmosphere of vociferous local opposition and opposition from campaign groups such as Friends of the Earth. The final challenge to the planning approval was dismissed in April 2017.

BEIS Consent is a new step in the consenting process for onshore exploration utilising hydraulic fracturing introduced as part of the Infrastructure Act 2015. It is intended to ensure that BEIS is given a final opportunity to determine that all necessary environmental and health and safety permits have been obtained and that any scheme for hydraulic fracturing is appropriate in all the relevant circumstances. This BEIS Consent is the first to be provided and relates to an application made by Cuadrilla in May 2018. Cuadrilla’s BEIS Consent is conditional on a number of factors which the company is confident of achieving in short time in order to begin the work of hydraulic fracturing “some time in September”.

Cuadrilla, pursuant to its October 2016 planning approval, began drilling two horizontal exploration wells at Preston New Road earlier in 2018. The first well, the well to which the BEIS Consent relates, is at a depth of 2,300m below the surface and was completed in April this year. The second (at 2,100m below the surface) was completed earlier this month and a BEIS Consent for this well has not been provided as part of Claire Perry MP’s decision. These are the first two horizontal wells to be drilled onshore in the UK.

The decision by the Government will be welcomed by the industry. There is thought to be considerable potential for significant quantities of unconventional gas and oil reserves under the UK mainland, but the technical, commercial and social challenges to recovering those reserves to the surface is as yet not fully known. The commencement of exploration activities, such as those proposed at Preston New Road, is an essential step forward in increasing the industry’s (and the public’s) understanding of the true nature of that potential.