Councils Brace for Shale Gas Planning Battle

Britain's shale gas revolution is heading for a clash between local authorities and the central government over planning permission for extraction.

If shale gas extraction is deemed commercially viable, the government fears progress on drilling work may be held up by a drawn-out planning process as local authorities look to use their powers to delay or block work from taking place in their areas.

Following a report by the British Geological Survey (BGS) that revealed more British shale gas reserves than expected - a total of 1.3 trillion cubic feet underneath Yorkshire and Lancashire - exploration firms are set to start drilling to see if any of the unconventional gas is extractable at commercial levels.

As it stands, planning responsibility for shale gas extraction projects lies with local councils.

If a majority of reserves are deemed extractable, it would revolutionise the UK gas industry. Subsequently, it is likely that the government would officially designate shale gas extraction projects as nationally significant - meaning ministers will take over planning permission powers from local authorities.

A spokesman for the Local Government Association (LGA), which represents local councils up and down the country, told IBTimes UK that none of its members had so far raised concerns about this issue.

"The key issue for us is that it does remain a local decision, because obviously any big infrastructure project like that in a local area is going to have an impact," the LGA spokesman said.

"So it's important that it remains a local decision and open to the transparent and democratic processes available through a local council."

In a consultation document published by the Department for Communities and Local Government (DCLG), the government said it would keep under review its decision not to extend nationally significant status to shale gas extraction.

"Shale gas extraction has yet to take place at a commercial scale in this country and, as it develops, the government will ensure that an effective planning system is in place, with the necessary guidance in place by July 2013," said the document.

"Applications for planning permission for onshore oil and gas should therefore normally remain with minerals planning authorities for determination."

Local Communities

Local communities and environmental campaigners have already expressed fears over shale gas extraction. The unconventional resource is obtained through the controversial fracking process, where shale rocks are blasted with hydraulics to fracture them and release trapped gas, which is then tapped. This can cause mild tremors.

There will also be flaring at extraction sites, where any excess gas is burnt off through large chimneys. Anti-fracking campaigners also point to the risk of chemicals used during the process leaking out nearby land and water supplies.

In a bid to appease concerned local communities, the government announced a support package for those living nearby shale gas extraction sites.

Every affected community will get £100,000 and 1% of revenues from the gas that is successfully extracted. Firms must also sign up to a community engagement charter to ensure locals are continuously consulted about any work planned.

However, if communities are not convinced by the funding package and slick public relations of energy firms, they will put pressure on their local elected representatives to halt any attempt at shale gas extraction.

It will cause friction between regional authorities and the national government, which wants to make the most of the country's shale gas reserves.

Moorland Energy and the 14 Month Planning Process

One planning application by an energy firm was dragged out for 14 months by a local council, which had a list of 45 consultees, despite guidelines saying authorities should take a maximum of four months to make their decision.

The application, from Moorland Energy, was to build a gas processing plant to supply local production into the main grid.

Moorland Energy appealed to central government over the length of time the council was taking to reach a conclusion. The appeal was successful and central government went over the local authority's head.

Glynn Williams, partner at private equity group Epi-V, an investor in gas driller Moorland Energy, told Reuters the council was "slightly understaffed".

"Being commercially minded, time is money, so we had to hurry the process along," he said.

Regulator's Planning Warning

Regulators and industry leaders have warned about the planning law barrier facing any firms looking seriously at onshore shale gas extraction in the UK.

Lord Smith, chairman of regulatory body the Environment Agency, said shale wells not only require permits from his organisation and the Department for Energy and Climate Change, as well as permission from health and safety officials, before they are built, they must also convince local planning officials that they should be allowed to do work in a local area.

"The key bit that is under much less certainty is the planning permission, because you need planning permission from the local authority," said Lord Smith at a round table debate on shale gas, put on by energy industry recruiter Spencer Ogden.

"That's where I think the government needs to put some thought into. Is the planning system the right sort of mechanism for this?"

Ken Cronin, chief executive of industry representative body the UK Onshore Operators Group, said that planning is the "most difficult part" for firms wanting to explore shale gas.

"It's ultimately our social licence to operate. People do forget though ... we have already got a fairly large onshore oil and gas sector in this country," he said, pointing out that more than 2,000 wells have been drilled in the UK over the past 40 years.

"We mustn't start thinking that this is a new industry. This is an industry that has been going a very, very long time, working with our local communities, and we will continue to do so.

"On the particular issue around shale, we are going to work even harder with our local communities to ensure that they understand exactly what we are doing and what the implications are.

"Planning is probably the most important thing we need to sort out."