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Court of Appeal Gives Judgment in Lancashire Fracking Case

Judgment was handed down today by the Court of Appeal in the legal challenge to the largest fracking operation to be given the go-ahead in the UK to date. The challenge was brought by two appellants: a local community group (Preston New Road Action Group) and anti-fracking campaigner Gayzer Frackman. Both claimants had participated in the 2016 inquiry in Blackpool which led to the grant of permission for hydraulic fracturing to take place at Preston New Road in Lancashire.

The Cornerstone Hydrocarbon Group has been involved with the Lancashire Fracking sites since 2015, and five members of that group represented various parties at the 2016 inquiry.

Mr Frackman's appeal raised four main issues:
(1) whether the environmental impact assessment ("EIA") had properly taken into account the direct impact of greenhouse gas emissions from the "extended flow testing" phase of the development (when gas would be pumped into the grid) and the indirect and cumulative greenhouse gas impacts of the project from any later shale gas production which would take place on the Preston New Road site,
(2) whether the greenhouse gas emission impacts had been considered at the earliest possible opportunity, in line with the EIA regime,
(3) whether the Secretary of State's decision was inconsistent in taking into account the benefits of the project without considering the negative impacts, and
(4) whether the Secretary of State had failed properly to apply the precautionary principle, which requires that planning permission is refused where there is a real likelihood of harm to public health if a risk materialises, but it is impossible to know whether the risk will occur because of scientific uncertainty.

On the first issue, the Court emphasised that the "project" for which permission had been given was for exploration for shale gas. Any later production that would take place at the site would be a different project and would be subject to a separate EIA. Further, the Court held that it was not possible accurately to assess the effects of the production phase because it would only be undertaken if sufficient recoverable reserves of shale gas were discovered during the exploration phase. Focusing on the extended flow testing phase of the exploration, the Court held that the Secretary of State was entitled to assume that this would not increase the volume of gas burned in the UK because the gas supplied to the grid would be an indistinguishable part of the existing supply of gas, not additional to that supply.

On the second issue, the Court interpreted the requirement to consider environmental impacts at the "earliest opportunity" as a requirement to consider impacts in a "timely" manner. Given that it was not possible to assess the impacts of the production phase until after the exploration phase, an assessment at this point would be premature and untimely.

The Court identified that government policy is in favour of promoting fracking and that the extraction of shale gas is consistent with the Government's objectives to lower carbon emissions. In the light of this, the Court held on the third issue, that the Secretary of State was justified in taking into account that the development would help to achieve the objective of reducing carbon by establishing whether a commercially viable resource of shale gas existed on the site.

Finally, regarding the fourth issue, the Court held that the existence of uncertainty in relevant scientific knowledge was not sufficient to rebut the presumption, in paragraph 122 of the National Planning Policy Framework, that regulatory regimes will operate effectively. There were no objections from the relevant statutory consultees and the court would be slow to interfere where the decision-maker has received scientific advice.

The Court, therefore, dismissed the appeal.

Mr Frackman has applied for permission to appeal to the Supreme Court. His appeal focuses on the correct approach under the EIA Directive to assessing the exploration phase of an extractive process, which is designed to bring about the conditions necessary for production to take place on the same site as the exploratory works. He will argue:

1. The Court erred in finding that the crucial point was that there was a single, clearly defined project limited to exploration for shale gas on the site. The description of 'the project' in the application has never been determinative of whether something is an indirect cumulative effect of that application, nor should it be. Exploration is not an end in itself. Exploration is a necessary precursor to production and only takes place when production will go ahead should the exploration prove successful. Production is thus an indirect effect of exploration because it is the "use and exploitation of the end product" of exploration.

2. The Court erred in concluding that it could safely be assumed that any gas provided to the grid during the extended flow testing phase would be an indistinguishable part of the existing supply and that its use would not lead to an increase in emissions. There was no evidence on this because of the failure to subject that phase to EIA. It was circular to permit the lack of evidence to justify the failure to make the assessment. It was similarly circular to permit the lack of evidence to justify an assumption that the extended flow testing phase would not increase greenhouse gas emissions.

3. Both logic and the EIA Directive require that the likely greenhouse gas emissions arising from the indirect impact of exploration (ie production) ought to have been identified in the EIA and taken into account at the earliest possible stage: when the planning application for exploration was determined. Cuadrilla must have calculated the level of gas production that would make the wells commercially viable and so would have been able to identify the likely emissions arising from the production stage had they been required to do so.

4. The Court of Appeal concluded that the Secretary of State did not err in deciding that the development would help to achieve the objective of reducing carbon by establishing whether or not a commercially viable resource of shale gas existed on these sites. However, exploration for shale gas, by itself, cannot achieve any objective of reducing carbon, unless the production stage is taken into account and it is assumed by the government to be less emitting than other sources of gas. The exploration stage, considered by itself, only leads to an increase of greenhouse gas emissions because of the flaring of gas: the EIA estimated the greenhouse gas emissions from the exploration would be in the range of 118,435 to 124,386 tonnes of CO2e.

5. The Secretary of State concluded that the relevant regulatory controls would operate effectively to prevent harm to the environment and human health. However, the evidence before the Secretary of State demonstrated that the environmental and health risks associated with fracking were unknown. One cannot regulate risks that are not known and that being so, the Secretary of State ought to have applied the precautionary principle and refused planning permission. In the circumstances, the Court of Appeal ought to have quashed his decision on grounds that he failed to apply the precautionary principle and/or that his decision was irrational.