[This article first appeared in the Nottingham Law Society’s February 2015 Bulletin. I’ve re-posted it here for reference.]

Hydraulic fracturing, (or ‘fracking’) refers to the extraction of oil and gas from shale rock by the injection of water, sand and chemicals at high pressure to fracture the rock formation and release trapped hydrocarbons. Unprecedented exploitation of shale deposits in Texas and North Dakota is one of the factors behind a recent plunge in the price of oil,[1] which is, for now, steadily lowering the price at the pump. While US domestic oil production has swelled to rival Saudi Arabia,[2] a similar fracking boom seems unlikely in the more densely populated islands of the UK.

As ever, “cheap” energy comes at a cost to the environment and climate. Concerns about the effects of fracking, from earthquakes in Blackpool to the risk of groundwater contamination, have stirred widespread protest. As fracking advances in spite of fenceline demonstrations, litigation has followed in its tracks.

R (on the application of Frack Free Balcombe Residents Association) v West Sussex CC [2014] EWHC 4108 (Admin) was a judicial review of the Defendant’s granting of planning permission to fracking company, Cuadrilla, to explore for and flare gas in the village of Balcombe in West Sussex. On 5 December 2014 Mr Justice Gilbart dismissed the claim.

The facts: 

In 2010, Cuadrilla applied for and was granted planning permission to drill two oil wells in Balcombe. Drilling commenced in July 2013. Cuadrilla’s operations attracted widely publicised protests along the road leading to the site. The Council obtained a possession order from the High Court and an order restraining the protestors fr to a defined area opposite the site entrance.

On 3 December 2013, Cuadrilla applied for further planning permission to explore for hydrocarbons and operate a gas flare for testing purposes. There was no challenge to the decision on 14 January 2014 that no Environmental Impact Assessment was required.

The planning process began. Various organisations made statutory consultation replies. The Claimant, representing 300 members, made detailed objections. The planning officer summarised these in her report to the Planning Committee. The conclusion of the officer’s report relied on the regulators to address the potential risk of air and water pollution of particular concern to the Claimant.

On 29 April 2014, the Planning Committee determined the application, following a well-attended public meeting. The Claimant alleged that during the meeting, the planning officer and the Council’s legal adviser gave improper advice to the Committee. Cuadrilla’s application was granted subject to 20 conditions, including some relating to the control of air and water pollution.

The issues

The Claimant argued that the Planning Committee was

  1. wrongly advised to leave matters such as air pollution and well integrity to specific regulatory bodies;
  2. misled on various environmental and technical matters;
  3. wrongly advised to ignore past breaches of planning condition by Cuadrilla;
  4. wrongly advised that the number of objections was immaterial;
  5. wrongly advised that the cost of the protests against Cuadrilla was immaterial.

The Respondent contended that the Committee took a lawful approach to pollution matters, was entitled to assume environmental issues would be addressed by the regulators, in line with the case law and was not misled or misadvised on the various matters complained of. They argued that the Committee should not have considered the cost of dealing with protests.

Image: Engineering & Technology magazine

 

The Judge’s conclusions

Mr Justice Gilbart held that while the planning regime overlaps with various regulatory codes governing hydrocarbon extraction, the environmental and technical matters in this case fell squarely within the responsibilities of the regulators (§28). He cited Gateshead MBC v Sec of State for Environment [1994] Env LR 37 as authority to the effect that Planning Committees must take account of any approvals by regulators but avoid duplicating their functions (§33). This had been approved by Lord Justice Carnwath, as he was then, in the case ofCornwall Waste Forum St Dennis Branch v Secretary of State for Communities and Local Government [2012] EWCA Civ 379, who added that a Planning Committee is entitled to be guided by the views of regulators with the relevant expertise. A grant of planning permission in such circumstances will not be susceptible to challenge unless the regulator’s views were materially flawed.

It followed that Planning Committees could rely upon the future actions of an active regulator to address technical environmental shortcomings raised by objections to planning permission. The Claimant’s arguments to the contrary were rejected. Mr Justice Gilbart was also not persuaded that the Committee were wrong to rely on the regulators and did not accept that the regulator’s guidance was flawed.

Legitimate concerns had been raised that Cuadrilla’s application did not address the monitoring of sulphur dioxide from gas flaring. Despite this omission, the Environmental Agency had issued a permit. However, the consultation process revealed that these concerns were not significant in the eyes of the relevant statutory bodies who proposed to monitor the emissions.

The Planning Officer told the Planning Committee that they “must” leave the environmental pollution matters to the regulators. Although this unfortunate word choice did not accurately reflect the legal position, the Mr Justice Gilbart, perhaps rather generously, took the view that the word “must” did not alter the tenor of the advice, which was that the Committee “ought” to assume the regulators would address the concerns (§103).

The Claimant argued that this was an exceptional case where Caudrilla’s past breaches of planning permission conditions ought to be considered. (It was Cuadrilla’s operations that caused a magnitude 2.3 earthquake in Blackpool in 2011). However, the Judge found that evidence of past breaches was before the Committee who considered it carefully.

Although the Committee was advised that the number of representations was not material, but to focus on their content, the Committee were well aware of substantial opposition and its scale was brought to their attention.

Finally, on the relevance of the costs incurred as a result of protests against Cuadrilla’s activities, the Judge accepted some costs would fall on the Defendant but there was no clear evidence of how much it cost. On principle, the Judge concluded that the socio-economic impacts in this case had nothing to do with the design or use of the development, but related to policing of protest against fracking. Such impacts are not relevant to the question of planning permission. Should a Committee take such considerations into account, that would render their decision unlawful. The Judge relied on R (Phoenix Aviation) v Coventry Airport and others [1995] EWHC 1 (Admin) as powerful authority that “public authorities must beware of surrendering to the dictates of unlawful pressure groups”.

Comment:

While the case did not attempt to lay down any general principles, it provides for the first time a helpful illustration of the legal, regulatory landscape in which fracking companies operate (§4).

Local authorities can take some comfort from the considerable weight given to the Planning Officer’s report and advice. It seems that more egregious examples of legal error than those alleged by the Claimant would be required before an otherwise thorough process could be quashed by the Court.

For opponents of fracking, the outcome is disappointing. At a time when oil industry regulators are under-resourced (see for example the “collapse in inspection, investigation and enforcement” in the North Sea oil sector)[3] and as the government cuts ‘red tape’ and promotes fracking nationally, the assumption that environmental matters will be adequately addressed by regulators is potentially problematic. Although the Claimant’s argument was firmly rejected, it may continue to be a reasonable point to take, particularly where there are strong examples of flawed regulatory oversight or guidance that contaminates the planning process.

While Planning Committees may safety ignore the cost implications of protests, it is unlikely that the fracking companies can. The fracking industry depends on a relatively high oil price to stay profitable. Companies are vulnerable to escalating costs particularly while the oil price is low.[4] Further litigation, whether by judicial review or more directly, may increase pressure on their profit margins and add to their challenges, even as the government awards licences for shale gas exploration across wide areas of the UK in Spring 2015.

Notes:

[1] The Economist, The new economics of oil: Sheikhs v shale, 6 December 2014,http://www.economist.com/news/leaders/21635472-economics-oil-have-changed-some-businesses-will-go-bust-market-will-be.

[2] National Geographic, How Long Can the U.S. Oil Boom Last? 19 December 2014, http://news.nationalgeographic.com/news/2014/12/141219-fracking-oil-supply-price-reserves-profits-environment/.

[3] Prof Steve Tombs and Dr David Whyte, ‘Regulatory Surrender: death, injury and the non-enforcement of law’, Liverpool University, 13 July 2010.

[4] Something protestors are well aware of. See Netpol, Senior public order police commanders train for future anti-fracking protests, 16 December 2014, https://netpol.org/2014/12/16/gold-command-training-fracking/ towards the bottom of the webpage.

Posted by Ben Amunwa

Founder and editor of Lawmostly.com. Ben is a business and public law barrister with the 36 Group. He gives expert legal advice on employment, immigration and commercial disputes to a wide range of clients.

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