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Special Digest

Could This Kill off UK Fracking?

02/08/2013

Horizontal wells - the implications for landowners.

How much it will be worth for farmers to lease their land for fracking is still an unknown in the UK, but it's clearer what will happen for landowners whose acreage is undermined by horizontal wells. If the frackers are crafty and never let on where they are drilling they will get nothing. If they are approached by the frackers with an offer, it will be pitifully small in view of the risk to their land. If they refuse, they may be taken to court and because the law is on the frackers' side will have to prove they are not acting unreasonably -difficult without a good lawyer.

The background is this. According to the law, people whose land is undermined - and this includes homeowners and local authorities as well as farmers - should be approached for access rights by way of underground way-leave (but cannot refuse without good reason and cannot demand unreasonable amounts for the "access"). The old-established principle on which this is based is that they own the land down to the core of the earth. Not for the oil and gas there, of course, the government has taken those away. This applies not only to fracking but any underground "deviation" well drilling, including for coal or CBM, being based on old coal law.

It is now clearly established by high court judgement that if the drillers go under somebody's land without permission they are committing a trespass. They can be taken to court, and unless the law changes if the facts are proven regarding the route of the underground drilling the landowner is pretty sure of a victory. But the compensation (unless of course it is also the case that damage has been done to the property) for the trespass will be small, maybe 1,000.

In a country like the UK, this presents a potential major hurdle for the frackers. Land parcels are often small. A horizontal a mile long may go under many individual parcels of land belonging to different owners. If horizontals radiate out from a well pad in maybe ten or a dozen different directions the fracking company may have to enter a long period of negotiation to secure all necessary access rights, which could cause serious delays and become a serious deterrent to fracking plans.

One problem for landowners is - if they are NOT approached for an agreement, how can they find out whether their land is likely to be drilled under, or how can thy find out whether their land HAS been drilled under? It seems there is no mechanism for ensuring that landowners are aware of their rights. There is no requirement for frackers to have made arrangements before achieving planning permission, which is the major stage at which the public has the opportunity to object if they are so minded.

And it is clear already that frackers may be coy at the planning stage about where their horizontals may go. This is particularly true at exploration stage. In Lancashire at Anna's Road Cuadrilla gave an indicative plan of where an exploratory horizontal might go. But this was very vague. And whether a planning objection would have been seen as reasonable on the vague premise that a horizontal MAY go under the objector's land is doubtful. At Balcombe Cuadrilla gave no indication for their 2010 planning application in which direction any horizontal might go.

Since there seems no further stage of formally agreeing a specific direction involving public consultation, it seems highly likely that fracking companies could, if they were so minded, bypass consultation with landowners and simply drill and hope that if they were found out they could make a small payout to avoid further complaint.

Although, as I said, there is a clear presumption in the law that landowners are obliged to agree to grant access rights, it remains to be tested in court what would happen if a landowner (or a number of landowners on the route of a proposed horizontal, in joint action) refused to grant access. The fracking company would either have to abandon the route or take the landowners to court. The landowners would then have to prove reasonable objection. It seems fairly plain that in the case of fracking, in the light of US experience that a good case could be made for not wanting your land to be devalued or polluted by fracking activity. For example, farmers in particular are likely to have water wells to provide drinking water for themselves, their livestock or their crops. This aspect is totally untested in the courts. There is therefore no indication as to what a court might decide is a reasonable objection. In other words, there is everything to play for.

Maybe it will indeed take a court case to decide the future of fracking. The main target at the moment should be to ensure that this aspect of fracking and the law becomes better known - by landowners, by landowner organisations including the NFU and the Country Landowner and Business Association CLA, major landowners like the water companies and the Forestry Commission, smallholders and other individuals and companies outside these organisations, and also ordinary householders in towns and villages. Local authorities should be lobbied to implement a policy not only not to lease their land to frackers but not to grant any access rights to their land underground.

There is, of course, the danger that if it sees this could become an insurmountable problem to the frackers the government could attempt to change the law and take away landowners' rights. This would, however, be incredibly contentious. The NFU and CLA are powerful lobbyists. Perhaps more likely is that they would try and implement a law that said if a certain percent of owners granted access the rest would be obliged to give consent too.

In any event, this in my opinion is an important issue that deserves wider knowledge and discussion.

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