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UK plans to lure shale developers with trespass law

The UK is poised to reform trespass laws, so onshore oil, gas and geothermal producers will be able to drill under privately-owned land without first seeking consent of the landowner

The Infrastructure Bill was made public in the Queen’s speech, delivered to parliament on 4 June. The bill aims to encourage development of the UK’s domestic energy reserves, such as shale and North Sea reserves, by clarifying and streamlining the underground access regime. “Legislation will be introduced to help make the United Kingdom the most attractive place to start, finance and grow a business,” the Queen said. “The (Infrastructure) Bill will enhance the UK’s energy independence and security by opening up access to shale and geothermal sites and maximising North Sea resources.” The speech outlined the government’s key objectives for the coming year. It is not designed to reflect the Queen’s personal views. 

The government is currently carrying out a public consultation on its plans to allow shale gas developers access to reserves beneath privately-owned land without first gaining permission from landowners. 

Under UK law, sub-surface mineral rights are vested in the crown, but companies with licences to extract oil and gas have to negotiate access to them with the landowners under whose property the resources are found. 

As the law stands at present. drilling without first obtaining right of access constitutes trespass. This could prove particularly problematic for prospective shale-gas producers, as horizontal drilling could constitute trespass beneath land owned by multiple landowners.   

The government is proposing to dispense with the need for individual landowner consent, instead allowing access rights for shale-gas developers below 300 metres underground. Companies would still be required to notify landowners of drilling plans and would be expected to pay a voluntary community fee of £20,000 ($33,400) per well drilled. 

In a joint statement, prime minister David Cameron and deputy prime minister Nick Clegg said the Infrastructure Bill will help deliver the energy supplies a modern economy needs. “It will stimulate investment, unlock our North Sea resources and support the development of shale gas. We want Britain to be a country that is energy independent and in control of its future, and not reliant on foreign countries for oil and gas,” they said. 

The UK Onshore Operators Group (UKOOG) welcomed plans to legislate for access rights for the onshore oil and gas and geothermal industries. The group’s chief executive Ken Cronin said the proposed legislation would bring the onshore oil and gas and geothermal industries in line with other industries, such as mining and utilities, which already have access rights. He said the new access rules would have “no noticeable effect on the lives of home and property owners”.

Cronin added: “It serves no one if an anomaly in the legal system allows the few to block access to much-needed natural resources that lie deep below the surface of the UK and can benefit the whole of the country.” Law firm Norton Rose Fulbright said the changes should speed up the planning process for shale-gas development and reduce initial costs. However, the firm added that companies are likely to face a backlash to the new bill and ongoing public opposition from local residents and action groups.

Environmental campaigners have expressed dismay at the government’s plans to change trespass laws, with Greenpeace saying the move ignoring public opinion and “railroading it (the bill) through with a bungs and bulldozers approach”. The government wants to speed up the regulatory process for prospective shale gas explorers hoping to tap the UK’s potentially large reserves of shale gas and oil. 

On 2 June, Union Jack Oil, a UK-based independent company, said there could be around 5.4 billion barrels of shale oil and over 2.7 trillion cubic feet (cf) of shale gas in just one of its licence areas in Nottinghamshire. Union Jack Oil has a 10% interest in the PEDL 201 license area alongside Egdon Resources (32.5%), Celtique Energie (32.5%), Terrain Energy Limited (12.5%) and Corfe Energy Limited (12.5%).

The companies are hoping to tap the Burton on the Wolds prospect, which lies between the Rempstone and Long Clawson oilfields on the southern boundary of the Widmerpool Gulf, in northern England.

David Bramhill, Union Jack Oil’s executive chairman, told Petroleum Economist that although it was unclear how much of these shale oil and gas resources could be extracted, even recovery rates as low as 1% would still “have a significant commercial value”.

At the end of May, the British Geological Survey (BGS) said the UK’s Weald basin, in southern England, could hold almost 9 billion barrels of shale oil, which, if proved up, has the potential to triple the country's crude reserves. A recent BGS study claims the Bowland basin, in northwest England, could hold as much as 2,281 trillion cf of shale gas. By comparison, the UK's conventional gas reserves stand at just 8.7 trillion cf, according to Cedigaz, a supplier of gas data.

Bramhill said that while the company’s immediate priority is developing its conventional oil resources in northern England it plans to bid for new acreage in the upcoming 14th UK Onshore Licensing Round, expected this summer. The 14th round is expected to attract major  interest from companies hoping to tap the UK’s shale oil and gas reserves. “I haven’t seen anything like this in the last 20 years,” he said. “I think it’s going to be a bun fight.” 

The government also plans to set up a new agency governing the UK’s North Sea energy activity, to help the government and industry maximise recovery and revenue from the resource. 

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