North York Moors National ParkMark Hill - Head of Development

Management

Fracking Information Presentation

January 2016

PM David Cameron – “We are going all out for shale gas”.Budget 2013 shale gas tax regime allowances reduced (62%

to 30%) to encourage £14b investment.

Simon Bowens Friends of the Earth – It will make no difference to our gas bills and it brings big environmental

risks which is why it is banned for now in 5 of the 22 countries including France & Germany.

Chris Smith (Outgoing Chairman of the Environment Agency – “Would not rule it out in National Parks” widely interpreted

as an Ok .

What is Fracking ?

What is Fracking ?

• 65M years ago marine organic life forms and plants laid down in Namurian epoch.

• 1000 miles of Geological movement, high pressures and time events combined such that this organic matter up to 5000m thick and 3000 metres down to generate hydrocarbons (methane or natural gas) in basins.

• Much still locked into source rocks, some has escaped vertically to atmosphere some trapped under impermeable rock layers and this can be drilled and extracted as conventional gas.

• Fracking short for hydraulic fracturing, it is a process to get methane gas out of source rock started in 1860 & refined in 1940’s but modern deep drilling brought into current focus.

• (176 PEDL licenses granted in 13th round), further 159 PEDL license granted in 14th Round (Dec 2015) (75 have restrictions).

• In 2013 DECC issued ‘The Carboniferous BowlandShale gas study’ and issue attracted vast media attention.

• So where can shale gas be found ?

Background• Why is Shale gas so potentially important ?

(equivalent North sea 45m barrels, Wealds

basin 2.2-8.6b barrels, Bowland 237t

barrels)

• UK 1997-2003 net exporter of gas

• Predicted that before 2020 will import 90%

gas, security of supply issues.

• Renewables including nuclear gaining very

slow market share.

• For next 50 years predictions gas & oil will

remain our main fuel source & much better

than coal for CO2,

• All Gas owned by the Crown

• Prospective extractors need to bid for

licenses from DECC and pay taxes

• Not included in National Infrastructure list

projects dealt with by Government (NSIPs)

will be dealt with by Mineral planning

Authorities.

• Also offshore, BGS suggest 5-10 times the

land resource, Cuadrilla’s former boss

looking in Irish sea..

Recent Developments• Consultation on changes to trespass laws below 300m – 99% opposed but

Government indicate no issues raised to change intended approach to lessen burdens on the industry (40,000 objections). Do not need land owners permission to drill for fracking below 300m.

• DEFRA report on ‘Impact on Housing Prices of Fracking’ report initially censored as being too sensitive. Now released and acknowledges impacts on ‘local rural economy’.

• November 2014 – Third Energy announce plans to apply to Frack existing Kirby Misperton well near Malton. NYCC Decision expected Feb 2016.

• July 15 - Lancashire CC – Officer Recommendation of Approval – members Refusal of planning permission to: drill, frack at Preston New Road and Roseacre Wood -Planning Appeal Public Inquiry spring 2016.

• Fall in price of Brent crude oil barrel price from $110 ( 2010-2014) to $48 (2015).

• November 2015 – IGAS apply to frack in Nottinghamshire.

• December 2015- MP’s agree to fracking more than 1200m below National parks –surface ban consultation pending.

• December 2015 14th Round licenses issued including SE67a for INEOS centred on Gilling East nr NP boundary & SE57 at Houlston (firm commitment to frac well).

• Associated groundwater boreholes ‘permitted development’.

• Sovereign wealth fund ( based on shale gas royalties) to be created by Government.

• Secretary of State to recover Shale gas appeals .

In brief, how is it done ?• Seismic , desktop and previous borehole information reviewed to plan target

horizon.

• Secure all four regulatory permits.

• Vertical or inclined vertical drilled borehole (steel encased in concrete through water bearing horizons) until shale gas bearing rocks reached (3000m down in North Yorkshire)) and then drill deviated horizontally up to approx 3000-4000 metres and most likely high pressure fluids.

• 99% Water & sand & 1% lubricating ‘frack fluid’ pumped in to high pressure to hydraulically fracture the rocks and lubricate & fungicide to let gas escape, sand keeps cracks open.

• Frack fluids pumped out ( not all can be recovered) and disposed of to specialist treatment plant ( likely to be West Yorkshire or Teesside).

• Likely second frack after 4-5 years, new site established after 7-20 years, partly as a result of 5000m depth of seam.

• Borehole packed and sealed with concrete and site restored upto 25 years later.

• Industry says still unclear if it will be viable ( said the same about North Sea).

Frack Fluid ( similar to chemicals in a lipstick or as toxic as lead/mercury/uranium)

What does a gas site look like ?

Conventional operational – Great Habton near Malton &

Fracking drilling taking place near Blackpool.

Benefits

• Security of energy supply, 40% of EU gas comes from Russia ( Ukraine

crisis illustrates potential risks), Note there was no stopping of supplies

throughout cold war in 1980s)

• Part of an overall energy mix, needed when sun not shine & wind not blow

and when deal with short term peak demands e.g. breaks in popular TV

programs.

• United States now 84% self sufficient for energy much down to shale

industry (extensive transmission infrastructure & gas owned by land owner).

• Jobs, industry estimates of 16,000 – 32,000 jobs at the peak of shale gas

production, (74,000 if include indirect jobs).

• Export income & taxation paid & £3.7b investment.

Benefits continued

• Export income & taxation paid & attract £3.7b investment.

• Local Benefits suggested 2013;• 100% Business rate uplift by Councils,

• £100,000 paid to local communities per lateral well,

• 1% of revenues paid to communities (estimated (£5-10m)

• Additional Local Benefits suggested 2014• £20,000 per lateral well drilled over 200m.

• Local system of alert despite underground right of access below 300m ( review of trespass law)

• BP envisage shale gas accounting for 21% of world gas production by 2035.

• Government organised ‘Sovereign Wealth Fund’ for local communities to share economic benefits.

Risks/Harm• Contributes to climate change.

• Safety of sites (including blowouts).

• Risk of earthquakes ( Preese Hall farm Blackpool, 2.3 & 1,5 magnitude tremors in april-may 2011 – subsequent Government report changed procedures rather than banning).

• Subsidence, regulation can make fracking safer but not safe.

• Depletion of water supplies ( industry suggests water needed at a site for a decade equates to that needed to water a golf course for a month),

• Pollution of water aquifers given some frack fluid remains (including wellbore pressure testing for integrity),

• Unpopular with the public

Risks/Harm continued.

• Air & noise pollution ( including road traffic & fugitive emissions)

• Liquid & solid wastes disposals ( including , radioactive

contaminants)

• Laying of miles of pipelines from extraction sites to existing gas

transmission network or small scale gas power stations and

overhead lines to grid.

• Will not cut bills due to higher development costs here than US &

‘baseless economics’.

• Even if start now no production for at least 10 years so not keep

lights on in near future.

• What level of risk is acceptable ‘in the public interest’ ?

Regulatory Framework for deciding Fracking

projects.• Health & Safety Executive

• Deal with approving and checking well integrity ( including borehole casings) and site/well safety and gas pipeline connection.

• Department of Energy and Climate Change (DECC) – Oil & Gas Authority• Issue exclusive licenses to explore and extract.

• Assess and control seismic risks.

• Control any flaring or venting.

• Assess and consent any Hydraulic Fracturing programme.

• Issue final well consent when HSE satisfied.

• Environment Agency• Protection of water resources ands approval of fracking fluid composition.

• Ensuring satisfactory treatment of any natural radioactive materials, extracted wastes and water treatment

• Control operation of site equipment especially pollution and flaring.

• Mineral Planning Authority (NYM & NYCC)• Decide whether appropriate for its location having regard to impact on health and natural environment and

general amenity considerations. Not to control process or health and safety or emissions issues.

• Amenity includes; noise, dust, air quality, lighting, visual intrusion, landscape character, archaeology, heritage, traffic, land contamination, soil quality, loss of quality agricultrural land, flood risk, land stability/subsidence, ecology, protected geology/geomorphology, site restoration & aftercare.

Typical Main Planning Considerations

• Principle of mineral extraction – major development test in nationally protected landscapes as mineral extraction tends to be visually intrusive.

• Landscape impact.

• Traffic impacts.

• Pollution implications (use of air and noise monitoring equipment and containment structures).

• Impacts on archaeology & ecology & public rights of way network.

• Impact on residential amenity

• Accept general advice from HSE/PHE/EA/DECC that the potential risks to public health in vicinity of shale extraction sites are low if extraction is properly run & regulated.

Issue of EIA and exploratory drilling.

• It is a principle of the Environmental Impact Regulations 2011 (EIA) that

‘projects’ cannot be ‘salami sliced’ to avoid proper application of the

Regulations.

• National Planning Policy Framework (NPPF) states that when planning for

unconventional hydrocarbons to clearly distinguish between the 3 phases

of development (exploration, appraisal & extraction).

• Minerals Planning Policy Wales and Welsh Department for Housing and

Regeneration clarification letter 8 July 2014 restate view that EIA is unlikely

to be required for exploratory drilling on basis that drilling does not involve

fracking and not located on a site that is unusually sensitive to limited

disturbance over a temporary period.

• Conflict between larger and smaller picture.

• European Shale Gas Oil Summit September 2014 London- Industry

representatives concede that Fracking will be treated as EIA development.

Finally • Government Planning Policy contained in National Planning Policy Framework :

• All Mineral Planning Authorities should give great weight to the benefits of mineral extraction.

• When planning for onshore gas including unconventional hydrocarbons, address constraints on production.

• As far as practicable provide for non-energy minerals outside National Parks.

• Great weight should be given to conserving landscape and scenic beauty in National Parks.

• Planning permission should be refused for major developments in National Parks except in exceptional circumstances. Such applications should include an assessment of need in both national and local terms, cost & scope for developing outside the NP and extent to which impacts can be moderated.

• NYM & NYCC & CYC - Joint Minerals and Waste plan.

• Preferred options for Fracking policies published for consultation mid of 2015.

• Likely to be a preference for sites outside protected areas/landscapes when plan submitted to PINS in summer 2016.

• Clearly two sides to the arguments, early days to determine where the overriding public interest will eventually lie.

• All eyes locally on NYCC (Third Energy) & Secretary of State (Cuadrilla) spring 2016.

Further Reading.• Alternative fossil fuels – Minerals Planning Factsheet by British Geological Society (BGS)

2011.

• The Carboniferous Bowland Shale gas study: geology and resource estimation by BGS & DECC July 2013.

• Developing Onshore Shale Gas and Oil – Facts about ‘Fracking’ by DECC December 2013.

• Planning practise guidance for onshore oil and gas. DECC July 2013.

• DECC Fracking UK shale: regulation and monitoring Feb 2014.

• The Economic Impact on UK energy policy of shale gas & oil – House of Lords economic affairs committee may 2014.

• National Planning Policy Guidance (online NPPG) – Planning for Hydrocarbon extraction July 2014

• Public Engagement with shale gas and oil - December 2014 by TNS group

• Friends of the Earth - Key information on fracking and shale gas web based resource on many of the issues raised above.

• Government appointed ‘Task Force on Shale Gas’ reports including single regulator and full disclosure of frack fluid recommendations.

• Frack Free Ryedale website.