Queen's speech announcements prove UK government's desire to go "all out for shale", says expert

Out-Law News | 05 Jun 2014 | 10:18 am | 2 min. read

The UK government has proved that it is prepared to go "all out for shale", an expert has said, after it confirmed its desire to take forward legislation to "clarify and streamline" the underground access regime.

The changes would be incorporated into a new Infrastructure Bill, announced as part of the Queen's Speech legislative programme for the next parliamentary session, depending on the outcome of its current consultation, the government said. Its proposals would allow underground access for shale oil and gas developments located more than 300 metres below ground without landowners' permission, although people living above ground could expect to receive compensation.

Energy and property disputes expert Melissa Thompson of Pinsent Masons, the law firm behind Out-Law.com, said that the proposals were "good news " and represented a "turning point" for the UK shale gas industry, which she said has been affected somewhat by a lack of suitable access rights .

"Government has now proved that it is indeed prepared to go 'all out for shale'," she said. "Working with developers and communities to ensure that everyone will benefit from the boost to our economy, job creation and security of energy supply is critical to its success."

"Our regulatory regime is respected worldwide for good reason: almost every aspect of shale gas development is already covered by existing legislation. This has the effect of making it one of the most regulated activities in the energy sector. But some aspects of UK regulation are not appropriate for shale gas, and current trespass laws have proven to be a  stumbling block to essential exploratory drilling. To kick start this industry, we need to tweak the process to ensure we can swiftly proceed to exploratory phase and ultimately gauge the contribution shale gas can make to the domestic energy mix," she said.

Shale gas is natural gas trapped within shale formations at significant depths below ground. Almost every aspect of its exploration and production is covered by a number of intersecting regulatory regimes overseen by the Department for Energy and Climate Change (DECC), local authorities, the Environment Agency and the Health and Safety Executive, amongst others. In addition, access rights must be dealt with and obtained completely separately to any licenses or permits.

The government's consultation on deep underground access began last month, and runs until 15 August. It is proposing the creation of an underground right of access for shale gas and deep geothermal operations only, provided that these are located below 300m. The right of access would be backed by a voluntary community payment of £20,000 per lateral well that extends by more than 200m horizontally, as proposed by the industry; and a clear notification system to alert local people before drilling begins. Developers would still be required to obtain all necessary permissions before beginning exploration, and to negotiate surface rights of access.

The proposed Infrastructure Bill announced as part of the Queen's Speech sets out a number of measures to improve economic competitiveness through increased investment in infrastructure and simpler planning laws. These include measures to implement the recommendations of Sir Ian Wood on maximising oil and gas recovery from the North Sea, a new 'allowable solutions' scheme allowing developers to offset carbon emissions from building projects to meet zero-carbon standards and the reconfiguration of the Highways Agency as a publically-owned company.