Recent developments in fracking in the UK
On 23 May 2016, the North Yorkshire County Council voted in favour of an application by Third Energy to extract shale gas from an existing onshore gas well in northeast England using hydraulic fracturing. The approval marks the end of a five year hiatus which has seen fracking operations in the UK come to a standstill after Cuadrilla's attempt to frack for shale gas near Blackpool reportedly caused two minor earthquakes in 2011. It is anticipated that Third Energy's fracking operations could begin by the end of 2016, unless legal challenges are bought by opponents of the North Yorkshire County Council's decision.
Regulation of fracking in the UK
In December 2012, the UK Government established the Office of Unconventional Gas and Oil (OUGO) to develop the UK shale industry. The OUGO has been tasked with ensuring that the regulatory framework for fracking in the UK is clear in order to promote best practices in the recovery of the UK's unconventional plays.
Before an operator, such as Third Energy, is entitled to frack in the UK it must have successfully cleared the following hurdles[1]:
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An onshore Petroleum Exploration and Development Licence (PEDL) needs to have been granted to the operator by the Oil & Gas Authority (OGA), typically as part of a competitive licensing round.
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The operator needs to negotiate with landowners for a lease to access the site covered by the PEDL, and to obtain permission from the Coal Authority to the extent that the exploratory well intrudes on coal seams.
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An Environmental Agency risk assessment may then need to be undertaken in order to assess risks to air quality and water, and to consider the issue of waste management.
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Planning permission from the local planning authority, and environmental permits or authorisations from the relevant environmental regulator will need to be obtained.
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At least 21 days before drilling is scheduled to commence, the operator of the PEDL must notify the Health and Safety Executive (HSE) of the well design and operation plans, and the HSE will be obliged to examine the well's design and construction.
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The operator must be compliant with the requirements set out in the planning permission and environmental permits, and must notify the relevant environmental regulator of its intention to drill.
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The OGA will need to determine whether drilling can commence, after making final checks with the HSE and the relevant environmental regulator, and ensuring that controls are in place to protect against seismic activity.
The future of fracking in the UK
Although estimates from the British Geological Survey suggest that, for instance, some 1300 trillion cubic feet of gas may exist in the Bowland-Hodder shale in northern England, until this point, very limited exploration, appraisal and drilling of unconventional plays have been undertaken in the UK.
The recent milestone decision in favour of Third Energy may eventually path the way for the UK's very own "shale revolution", and provide comfort to other operators who are currently awaiting the outcome of appeals against decisions which have prevented them from pursuing fracking operations in the UK.
