A victory for the development of shale gas in England? The judgment in The Queen on the application of Friends of the Earth Limited and Frack Free Ryedale v North Yorkshire County Council [CO-3470-2016] will be welcomed by shale gas exploration companies, already buoyed by Government enthusiasm for hydraulic fracturing. In this blog, we set out key points from the judgment which will impact on planning authorities and the industry.
On 20 December 2016, the High Court dismissed a claim for judicial review of the mineral planning authority's decision to grant planning permission to Third Energy UK Gas Limited for a production borehole at Kirby Misperton, North Yorkshire.
Friends of the Earth and Frack Free Ryedale ('the applicants') had challenged the decision of North Yorkshire County Council ('NYCC', 'the respondent') in May 2016 to grant permission to 'hydraulically stimulate and test various geological formations' and for the subsequent production of gas from a new borehole. The borehole was to be located within an extension to an existing production well site and would feed in to the existing pipeline network and gas-fired electricity generating station in Knapton. The Knapton site already operates under a permit from the Environment Agency to burn gas.
The applicants alleged that NYCC had (1) failed to take into account an assessment of the cumulative climate change impacts arising from burning this additional gas at the Knapton generating station and (2) misdirected itself in law that it could not require Third Energy to provide a financial bond to remedy any long term environmental pollution arising from hydraulic fracturing.
In response, NYCC argued that (1) it was entitled not to consider the effects of emissions from Knapton, since the planning permission did not relate to this site, such additional emissions could not be calculated and regardless, would be covered by existing permits at Knapton and (2) it was entitled to decide not to require Third Energy to provide a financial bond. Mrs Justice Lang found in favour of NYCC in both respects. Key points to note:
The mineral planning authority did not err in law in deciding that it was unnecessary to assess the cumulative impacts of burning the gas at the Knapton site.
In this fact-specific judgment, Lang J held that NYCC was entitled not to assess emissions generated by the burning of the gas from the well site in the electricity generation at Knapton because it was a separate site, governed by its own planning permission and environmental permits. Importantly, the gas to be produced by the new borehole would not result in an increase in the permitted capacity at Knapton, and any gas burned would be within the existing emissions limits under the Knapton permits. Therefore NYCC was entitled to conclude that the environmental statement for the new borehole was sufficient without such an assessment, and that it contained all of the information reasonably required to assess the likely significant environmental effects of the development.
It is essential for mineral planning authorities to properly evidence their assessment and consideration of environmental information.
Citing R (Blewett) v Derbyshire County Council  EWHC 2775, approved by the House of Lords in R (Edwards) v Environment Agency  UKHL 22, the judgment reiteratedthatit would be unrealistic and unhelpful for the environmental statement to mention every conceivable environmental impact of a project. Further, the process of public consultation is an opportunity to point out the deficiencies in a statement and provide the local authority with the fullest picture possible.
The Court found that NYCC was well aware of all relevant issues and representations in both preparing its scoping opinion for the environmental statement and making its decision. The Court was satisfied that the resolution of the committee in making the decision made clear that all relevant and reasonably required environmental information, including objections, had been taken into account.
The courts are reluctant to criticise an officer's report to committee unless it has failed to guide members sufficiently, or misled them, on a matter essential to the decision.
The Court had no difficulty finding that the planning officer's report did not need to specifically advise members on the objections about cumulative emissions at Knapton, or why an assessment of these impacts was not in the environmental statement. Lang J noted that the officer's report contained a detailed account of the proposals including the existing use at Knapton, and members had carried out a site visit. Further, the members can be presumed to have substantial local and specialised knowledge as councillors of a mineral planning authority with multiple existing wells in their local area.
In order for a judicial review claim to be premised on failings in an officer's report, the overall effect of the report must be to significantly mislead the committee about material matters which are left uncorrected. On this basis, the officer had not failed and members were in a position to decide the merits of the objections for themselves.
Mineral planning authorities are entitled to assume that other regulatory regimes will operate effectively.
The judgment adds further support to the existing precedent that planning authorities are entitled to rely on the effective operation of other statutory regimes. In this case, NYCC was entitled to rely on the pollution control regime governing Knapton and the adequacy of the existing environmental permits.
In relation to the issue of the long term environmental impact, NYCC was entitled to rely on the comments of the Environment Agency and Natural England in response to the scoping request, which did not require an assessment of the cumulative emissions from Knapton.
Companies operating in this sector should ensure that all permissions, permits and consents are consistent across these other regulatory regimes.
The decision may be interpreted as signalling the rising fortunes of extraction firms. It follows Secretary of State Sajid Javid's decision in October 2016 to overturn Lancashire County Council's refusal to grant permission to Cuadrilla and the Government's stated enthusiasm for such production as a means of bolstering energy security.
However, in view of fierce opposition to such developments in some quarters, challenges to future planning decisions remain likely. As judicial review is a fact-specific exercise, applicants and mineral planning authorities will need to abide strictly with the governing legislation and policy to avoid judicial criticism. Particular care should be taken with the drafting of scoping opinions, committee reports and resolutions as these will be heavily scrutinised by objectors looking to challenge future decisions.
If you are preparing an application for any consents in this sector or are facing a potential legal challenge, Fieldfisher's Energy team, which includes leading public and planning law experts, would be happy to discuss the issues with you.