THE BLOG

Fracking: Regulation Concerns

26/11/2014 11:52 GMT | Updated 26/01/2015 10:59 GMT

The following is an extract from a research piece entitled 'The future of UK shale gas" and is third in a series on environmental concerns related to fracking.

It is disingenuous and duplicitous to suggest the shale gas industry, despite being in its infancy, lacks a safe degree of regulation in the UK. As mineral rights in Britain belong to the Crown under the 1988 Petroleum Act, operators cannot contact households directly to gain permission to drill on their land. Instead, companies must seek planning permission and acquire a Petroleum Exploration and Development Licence (PEDL), which allows the conduction of seismic surveys and then exploratory drilling. The UK planning authority then decides whether "the activity is acceptable at that particular location, after local communities and other interested people have had the opportunity to set out their view". Further provisions to protect members of the public take the form of the Town and Country Planning Act 1990. This allows citizens within the vicinity of potential drill sites to submit a written response to the relevant planning authority. This is the first stage of a cumbersome process: permission will also need to be granted by the Mineral Planning Authority and the landowner.

To dispose of waste fluid, prospective firms will require a permit from the Environment Agency (EA) and the Health and Safety Executive (HSE). Once the above criteria has been satisfied, a company will finally require the approval of the Department of Energy and Climate Change (DECC). If approval is granted, drilling can commence under the supervision of the EA and HSE, which involves stringent inspections.

Adversely to the US, operators in the UK must apply for planning permission for each stage of the fracking process: exploration, appraisal and production. All applications to the mineral planning authority are processed after public consultation of the proposals, which involves an assessment of economic, social and environmental factors. If the minerals planning authority identifies "significant environmental impacts" as a result of fracking in an area, operators must collate an Environmental Impact Assessment (EIA). The extensive planning permission regulation for each stage of the hydraulic fracturing process significantly reduces the risks associated with fracking.

Another prominent difference is that water will be stored in enclosed tanks in the UK, rather than in open lagoons, aiming to minimise contamination. The DECC has also dictated that all UK wells will be required to capture and treat gases released in the extraction process, rather than flaring the gas.

Under the UK regulatory system, operators require consent from the Environment Agency (EA) for groundwater investigation and a license is only granted if the EA believes the volume of water applied for will not harm local communities or the environment. Conversely, the US federal Energy Policy Act 2005 contained the "Halliburton Loophole", which removed fracking and natural gas extraction from the jurisdiction of certain requirements under the Safe Drinking Water Act, such as the underground injection control or regulation of frac fluids. This is yet another example of the wildly differing regulatory regimes operating in the two states, and why US examples cannot necessarily be applied straightforwardly to the UK. The abstraction licenses awarded by the EA are not the only method the UK could use to regulate shale water use. The DECC makes further provisions to regulate water use:

"Water companies must produce, and then update every 5 years, a long-term plan with contingency reserves in case of a drought. Water companies will assess the amount of water available before providing it to operators."

A lack of transparency in the US over the chemicals used in frac solutions has led to it becoming a heavily contested issue. Shale supporters claim the lack of transparency is necessary to avoid competitors duplicating an operator's solution. Sceptics view the reluctance of operators to disclose the chemicals used as reason to doubt the safety of the fluid used. Firms operating in the UK must declare the chemicals in their solution. Not only does the operator have to submit a comprehensive list of every chemical used to the "appropriate environmental regulator" , but they must also publish a description of the chemical's use and outline any potential environmental hazards. Whilst frac fluid comprises primarily of water and sand, chemicals may be added to the mixture for lubrication to aid extraction. Cuadrilla, the only operator who has hydraulically fractured in the UK, listed its full list of chemicals in its frack solution here in accordance to Environment Agency guidelines. In terms of frac fluids, ensuring wells are cemented and drilled correctly is of more concern than the solutions itself.

Differing regulations between the UK and US, notably in the areas of water contamination, mineral rights and planning permission often render US examples incompatible with the UK. Nor can it be said that the government and regulators are feebly bowing to the demands of energy firms: the Environment Agency refused to grant Cuadrilla a radioactive substances permit as it didn't believe the company's plans to dispose of water were stringent enough. Moreover, the UK has national regulation, not state regulation like in the US, thus fracking-related legislation is binding through the country. The Green Lobby should not be able to tarnish shale gas extraction in the UK with examples from a country with a wildly different regulatory regime, nor should the public be concerned that UK regulators are impotent bodies.