Is UK shale gas policy about to change?
Recent
developments indicate that implementation of the UK –government`s pro-shale gas policy is being accelerated. In December2012 the administration of then Prime Minister David
Cameron decided to lift a pre-existing moratorium on shale gas extraction http://www.decc.gov.uk/en/content/cms/news/wms_shale/wms_shale.aspx . As a reaction, Scotland joined Northern Ireland in putting into place a moratorium on shale gas extraction.
In England, however, shale gas extraction is encouraged by the executive.
In order to overcome resistance of local councils towards one particular
technical component of shale gas extraction, hydraulic fracturing or
`fracking`, Whitehall put into place a number of tax-incentives. Councils may, inter alia, keep 100 per cent
(as opposed to the hithereto 50 per cent) of business rates (in effect property
taxes) that they collect from shale gas sites.[1]
This right could be worth up to 1.7 million pound per year per site.[2] That
move has been labelled by Gordon/McHeigh/Paterson as an `apparent attempt to encourage English authorities to approve fracking
applications`.[3] There
have been indications that the policy works. For instance, North Yorkshire Council in May 2016 gave the green
light for the first exploratory works to be carried out at a shale gas site in England.[4]
Despite this
punctual success, legal scholars warned that councils overall `continued to hesitate before approving
fracking applications (…)`.[5] The
UK government is now apparently on the brink of changing its `carrot` to a
`stick`-approach. According to the Guardian, Communities secretary Sajid Javid just
accepted an appeal by the shale gas company Cuadrilla against an earlier decision of Lancashire council
to reject plans to frack.
This means exploratory fracking of four wells in the area is now
possible. The council cited visual impact and noise when it turned down the company’s two
planning applications to frack on the Fylde last year,
but a month later Cuadrilla submitted an appeal https://www.theguardian.com/environment/2016/oct/06/uk-fracking-given-go-ahead-as-lancashire-council-rejection-is-overturned.
It remains to be seen whether this is a one-off decision. According to the NGO
`Frack Off`, several other applications for exploratory shale gas drilling
could be subjected to the same procedure in the future www.frack-off.org.uk/locations
.
[1] Jill Morgan
`Sustainability and stakeholder participation: shale gas extraction in the
United Kingdom` in John C Dernbach and James R May (eds.) `Shale Gas and the Future of Energy Law and Policy for Sustainability`
(Edward Elgar Publishing, Cheltenham, 2016) 150 (hereinafter: Morgan); Greg Gordon
and Aileen McHarg and John Paterson `Energy Law in the United Kingdom` in
Martha M Roggenkamp et al. (eds.) `Energy
Law in Europe` 3rd edition (Oxford University Press, Oxford
2016) paragraph 14.30 (hereinafter: Gordon/McHarg/Paterson).
[2] UK
Government `Local Councils to Receive Millions in Business Rates from Shale Gas
Developments` 13 January 2014 available at: http://www.gov.uk/government/news/local-councils-to-receive-millions-in-business-rates-from-shale-gas-developments [accessed 10/June/2016].
[3] Gordon/McHarg/Paterson
paragraph 14.34.
[4] Josh Halliday, The Guardian `North Yorkshire Council backs First UK
Fracking Test for Five Years` available at http://www.theguardian.com/environment/2016/may/23/north-yorkshire-council-backs-first-uk-fracking-tests-for-five-years?CMP=fb_gu [accessed 10/June/2016].
[5] Gordon/McHarg/Paterson
paragraph 14.34.
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