Infrastructure Bill [HL]

Written evidence submitted by Miss E R Adam (IB 21)

FAO Infrastructure Bill Committee: Re Part 5: MER and Underground Access.

As a concerned farm and small business owner in West Sussex, I have worked locally investigating unconventional oil and gas extraction planned for the UK. In the course of my research around a broad range of the impacts, I have attended (and spoken at) several APPGs, organized a seminar with the National Trust and RSPB, and visited (on invitation) the Royal Society.  I have actively participated in the local planning process and studied the planning system.

Various implications for the tax-payer, land owners and Treasury regards onshore shale extraction in the UK have not been properly considered. I believe if they are properly assessed, Part 5 of the Infrastructure Bill, and cannot be left in its current form.

1) The Need for Unconventional UK Oil and Gas: Is it necessary?

1) the government cite3) the ‘Wood Report’1) as justification for ‘maximizing economic recovery of petroleum’ in Part 5. However, the Wood Report related to offshore (UKCS) oil and gas, it did not include onshore and ‘fracking’.

2) The need for onshore extraction is often stated to be one of ‘energy security’, yet the PEDL licences and companies who have thus bought the rights to the energy are not necessarily UK based or owned. For example the Chinese National Offshore Oil Corporation (CNOOC) have invested in Cuadrilla. Claims of ‘energy security’ are misleading. There are ample reserves of conventional oil and gas still available worldwide. North Sea reserves are significant and although apparently ‘uneconomical’ to retrieve, the same ‘economic viability’ criteria for recoverability is not being used for UK onshore reserves.

3) The claimed ‘need’ can only be considered in a context of political will, or inclination – which clearly is not the same as ‘need’. Part 5 could make the principal objective MER of our abundant sources of renewable energy, but again, this is not the case, and it is clearly political will rather than need. Were the political will present to wean the UK off fossil fuels, Part 4 of the Bill, could stipulate new house building must not be dependent on gas for central heating. This is absent, and the removal of current requirements for more efficient homes hints at more dependency on heating fuels, not less – it is political choice. Thus the context of need v political inclination should be analyzed.

4) The ‘need’ currently presented by Gvmt confuses several issues:

a) Over-ambitious hopes of revenue for the Treasury

b) A ‘need’ for this particular unconventional UK oil and gas resource,

c) A further blurring regards ‘need’ for energy security.

These apparently politically motivated "needs" require thorough and individual assessment.

2) Economics: Is it viable?

1) The economic viability of shale extraction onshore in the UK has not been properly assessed. Against what price per barrel would UK shale oil be in any way recoverable economically? How has extraction of gas been assessed against the rapid drop in productivity of shale wells? Figures for the massive drilling programme, and the significant costs implicit in that have not been available in the public domain. Unconventional shale and ‘fracking’ is an extremely expensive way to extract fossil fuels in economic as well as environmental terms. If regulatory ‘excellence’ and monitoring ‘gold standards’ are in any way plausible, the costs would likely leave no room for profit or tax revenue. The process may instead, as is being evidenced in the USA, lead to massive debt.

2) Initial and well publicized claims by the Prime Minister that ‘fracking’ would lead to lower energy prices, have been shown to be untrue but a significant sector of the public still believe his original claims.

3) The UK would risk stranded assets, abandoned projects and bankrupt small exploration companies – this instability of course impacts the wider economy.

4) The economic impact of onshore unconventional extraction on other significant contributors to GDP, for example rural tourism has not been properly assessed. The economic impact on property prices has been hidden with redacted reports. Clearly if a property’s deep level land has been subject to the provisions of Part 5, this would show up in conveyancing, and it is entirely unacceptable to hide the ongoing implications of that on any property or land from the public when their current rights afford them some protection.

3) Liabilities for Taxpayer: Are they known?

1) At the end of a PEDL, the responsibility for well integrity, monitoring, maintenance and repair is left completely with the Government – and so the significant and un-ending associated costs would be borne by the tax payer. Again this is not a cost which has been calculated or understood by the public. The cost and importance of monitoring for methane leakage is especially concerning as it is such a potent greenhouse gas. In the future, it may be deemed obligatory to ensure leakage does not occur. For each well, and how it was originally constructed, this is highly significant in terms of repair costs.

4) Compensation and Payment: Is it fair?

1) Landowners have been lead to believe that the access rights which they could currently negotiate, (were they to wish to), to provide underground access to the PEDL licence holder are almost worthless. This is apparently based on one previous court case: Bocardo SA v Star Energy. However, the Crown Estate negotiate access (for pipelines across the strip of seabed around the UK coastline) 2). In 2009 this figure was in excess of £45m – for one year. The argument that a landowner (especially of significant acreage) would not be affected so therefore they should receive no compensation is disingenuous when considering the Crown could hardly be aware or affected by that pipeline.

5) Legality: Is the removal of land rights lawful?

1) Many comments have been made about the individual and landowners rights – from the report by the Bianca Jagger Foundation, to, for example, legal professionals noting that there has been no public consultation since the "temporary access" clause changed, after the public consultation to unending rights for oil and gas companies to store and ‘leave’ ‘any’ substance. The legal responsibility for pollution and accidents is still extremely unclear. This legislation is entirely different from previous ‘access’ issues as the need is not imperative, the rights are being given to private companies – at the expense of the property owner. Onshore extraction of unconventional oil and gas is of course a highly controversial process due to evidence of health and environmentally damaging impacts – which makes the removal of a landowner’s right to stop the process on their land unprecedented.

Clauses 36- 43 appear to be intentionally denying a landowner rights to assert their objection, rather than just ‘simplifying the processes.

6) Democratic process: Has it been followed?

1) Leading on then to the democratic process of this Bill. The Government stated in parliament3) (18/6/14) that the removal of land owners rights would be "entirely dependent" on the public consultation, which closed on 15/8. >40000 responses were received, some from significant organisations such as the NFU and National Trust. DECC have not made public the responses, except to acknowledge that 99% of respondents objected. This is clearly then, not ‘entirely dependent’ on the public response.

2) AFTER this consultation, came the amendments, originally 93ZBF, to add the even more contentious clauses regards ‘keep’ and ‘leave’ ‘any substance’ and the right to leave ‘deep level land in a condition different ..’ This radical departure from ‘temporary access’ has not been subject to public consultation, nor wide or fair publicity, nor are the implications understood by the general public.

3) The same can be said for the change in Geothermal rights – which currently are held by the landowner, and yet the ‘access’ issue appears to imply the state or crown currently have ownership rights as they do with oil and gas. This is not the case. Geothermal is not an access issue, it is an ownership one. At present the landowner has a significant asset if they are in a Geothermal hot spot (such as Cornwall)– which the Infrastructure bill would strip from them, and award it instead to the State. Has this been made clear to landowners? No.

7) Planning System: Is it fit for purpose?

1) On 13/1/14 I attended an APPG on Shale in which the then Planning Minister Nick Boles MP was speaking. I asked about cumulative effect in planning. The planning system is currently and peculiarly divided into ‘Exploration’ ‘Appraisal’ and ‘Extraction’. This then means at any one stage, there is a likelihood that the following stages and the cumulative impacts of the later stages are not properly considered, or even considered at all. Nick Boles appeared to agree that, for example, a company with a PEDL licence should disclose how many wells viable extraction in a given area would actually require. Also, an appropriate assessment of 'climate change implications' (a material consideration) is not conducted. These assessments do not happen and yet are surely relevant for proper consideration of impact. It can be concluded the current system is not fit for purpose. If applications are granted under the current flawed system, it is hardly surprising local councils and the taxpayer, will face policing of protest costs.

2) Although the public are told that unconventional oil and gas extraction would, were their individual land owners rights removed, still be subject to planning permission, the public are largely unaware of "DCO"s for ‘nationally significant’ developments and that shale gas and oil has been considered by this Government for inclusion in DCO status. It is currently "under review". This then means that potentially, the planning process could be circumvented by DCOs – no doubt the plan to that now being after landowners have lost their rights.

Please consider the above - it submitted in line with 8.2.3 of the Royal Society4) report and with the intention that it adds weight to the reasoning for MPs that to the amendments tabled by Rt Hon Norman Baker and Rt Hon Caroline Lucas on 18th December should be supported.

December 2014

1) www.woodreview.co.uk

2) www.abdn.ac.uk/law/documents/BocardoSAvStarEnergy.pdf

3) www.publications.parliament.uk/pa/ld201415/ldhansrd/lhan9.pdf

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4) Royal Society /RAE report 2012 https://royalsociety.org/~/media/policy/projects/shale-gas-extraction/2012-06-28-shale-gas.pdf