Utility Week

UTILITY Week 2nd May 2014

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16 | 2nd - 8Th MaY 2014 | UTILITY WEEK Policy & Regulation Analysis Access rights for fracking The government is looking to change trespass laws that could stop shale gas exploration in its tracks. By Mathew Beech. I f the latest figures from the UK Onshore Operators Group are to be believed, then the budding shale gas industry in the UK will provide a £33 billion boost to the country's economy and provide more than 64,000 jobs. Energy minister Michael Fallon said there is a "huge prize at stake", and hence the government was "fully committed to ensur- ing the UK not only benefits from the energy security shale gas could provide but also maximising the economic benefits". However, one of the many hurdles faced by the fracking industry is the trespass law. Currently, hydraulic fracturing cannot take place under private property without the owner's permission. However, fracking is by its very nature unpredictable. A drilling company may expect the fracturing to go in one direction, or for extractable gas reserves to be in one area of the rock, only to find the drilling veers off in a different direction. This means an operator needs to secure permission to drill from thousands of private landowners before exploration starts. Richard Sarsfield-Hall, senior principal at Poyry Management Consulting, says this could result in just one landowner being able to "kill" a project. Unlike oil exploration, where a vertical sha can be drilled down to access the oil reservoir, shale exploration requires a net- work of horizontal fractures to release the gas before it can be extracted. David Shakesby, an energy lawyer at Osborne Clarke, says the process of free- ing the gas from the shale rock is where the access rights arise. "It doesn't matter for conventional oil and gas extraction because you simply need to get to your reservoir to extract it," he says. "You don't need to work within the strata containing it. You do with fracking." To prevent this hurdle bringing the shale gas industry to a grinding halt even before its gets started, the government is planning to announce in the Queen's Speech in June that the trespass law will be altered under the Infrastructure Bill. Currently, the Department of Energy and Climate Change (Decc) has stated only that an "existing legal route", allowing operators to apply for access when it cannot be negoti- ated, is being examined to see whether it is "fit for purpose". However, a consultation on the law of trespass is expected, and the most likely out- come is that the law will be changed to give fracking companies assumed access rights. A licence holder may effectively be granted the right to trespass underground to access shale gas. If an operator finds itself working under somebody's land, there will be a presump- tion that it has the right to do so, although it will have to compensate the landowner if it draws any gas from under their land. Anti-fracking campaigners believe this change would "strip away well estab- lished homeowner's rights" to protect their property – including below ground, from trespassers. Greenpeace UK energy campaigner Lou- ise Hutchins says any change in the trespass law will leave homeowners "powerless" to stop fracking taking place under their prop- erties, meaning the government and energy companies will be free to follow their "toxic policy". However, Shakesby says that despite the changes that are expected to the law, prop- erty and landowners may still be able to hold up the fracking process, although "this won't be clear until those proposals come forward to be consulted on". Sarsfield-Hall says changing the law is a logical step and "is about giving parity to competing sources of energy". He adds: "There are a lot of different par- ties and different bodies, which makes it very complicated, so anything that can be done to improve that is definitely what is necessary." While not everyone is convinced about the impending changes to the trespass law, there is a wide acceptance that for fracking to go forward, it is needed. Energy minister Fallon says: "It's time to get ready for shale." And that, it seems, is just what the gov- ernment is doing. rEnEWabLEs Renewables a priority for French The new French environment and energy minister, Segolene Royal, has named renewable energy as one of six priority areas for the country. She announced that she wants to create 100,000 green jobs in the next three years. Royal said she wanted to accelerate investment in renewable technologies such as wind, solar, biomass and marine energy. ELEcTrIcITY Sweden says no to Danish interconnector The Swedish government has decided not to build a 40kW cable across the Oresund strait to Denmark. Swedish transmission system operator Kranat said no to the new cable, which would have stretched from Amager in Denmark to Malmo in Sweden. nEWs LabEL Dutch cancel Russian energy trade mission An energy trade mission to Russia scheduled for May has been cancelled by the Dutch government. The Ministry of Economic Affairs said the mission had been delayed because of the latest developments in eastern Ukraine. Dutch foreign minister Frans Timmermans said the mission would definitely take place at a later date. The aim of the mission was to increase contacts with Rus- sian gas companies. Briefs

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