Guest Post by Joanne Hawkins
Regulation is a central issue in the shale gas debate. Yet, it has received very little in depth attention, with many reports and political statements assuming the presence of a ‘robust regulatory system.’ In this guest post, Joanne Hawkins discusses some of the key issues with the current system of controls in the UK.
The current controls and environmental safeguards applicable to shale gas exploration using hydraulic fracturing are those used to govern the conventional oil and gas sector. Further details of the regulation and a regulatory road map can be found on the Department of Energy and Climate Change (DECC) website.[i]
Before engaging with some of the gaps that emerge when this regulation is applied in the specific context of shale gas exploration and fracking it is important to note that the existing regulatory framework is well developed.
Regulatory experience from the conventional sector is of significant importance and this post does not attempt to undermine the basic value of such a regulatory system.
However, the application of such a system to a new industry is not a seamless process and gaps in the regulation are visible. These gaps stem largely from uncertainty surrounding if/how current regulations apply and from the presence of inappropriate application thresholds. Again, it is important to note the value of best practice guidance on shale gas exploration from industry members. However, the voluntary nature of such guidance means that it is legally unenforceable and as such cannot guarantee regulatory gaps are filled.
Attention needs to be drawn to the problems in the current regulatory system if the risks of fracking are to be considered in context. The gaps and uncertainties that emerge can be seen in areas relating to chemical use, water, waste, emissions, environmental liability, environmental assessment and planning.
REACH and Environmental Release Category (ERC)
Under REACH (the regulation on Registration, Evaluation, Authorisation and Restriction of Chemicals) registration of new usages of chemicals (such as in hydraulic fracturing) by downstream users (i.e. users of chemicals in an industrial process/shale gas operators) is required. Despite the ‘new use’ of chemicals during fracking, an assessment of registration dossiers in 2013 found that the new use of chemicals in hydraulic fracturing was not explicitly mentioned in any registrations.[ii]
In addition, even if this registration requirement had been complied with there is an issue with the current Environmental Release Categories (ERC) available under REACH. These categories ensure that the relevant risk assessment/ management procedures are considered for a chemical in its new use, this includes consideration of potential exposure scenarios. At present there is no ERC that suitably describes the way in which chemicals are used in fracking. This means that the controls on chemical use which REACH offers cannot operate effectively. The recent EU Recommendation (on minimum principles for the exploration and production of hydrocarbons (such as shale gas) using high-volume hydraulic fracturing) emphasised that the registration of chemicals used in fracking is required, but it did nothing to address the inappropriate descriptors and models currently available in the registration process.[iii]
There is no guarantee that a borehole passing through groundwater will require a permit under the Environmental Permitting Regulation. [iv] This is due to the categorisation of many chemicals used in drilling muds and fracturing fluids as non-pollutants (pollutants being defined as any substance liable to cause pollution, in particular those listed in Annex VIII of the Water Framework Directive (WFD)). [v] This means that their direct injection into groundwater is not controlled despite the fact this injection may ultimately impact on groundwater quality and aquifers.
Notably however, the baseline monitoring requirements implemented by s50 of the Infrastructure Act 2015 mean that a consent to hydraulically fracture will not be awarded unless the level of methane in groundwater has, or will have, been monitored in the period of 12 months before the associated hydraulic fracturing begins. Where established, these baselines are then used to produce a ‘site condition schedule’ against which permits and monitoring can be based. Building on this monitoring, the British Geological Society (independent of regulators and industry) is in the process of collecting baseline data on air quality, surface-water quality, soil gases and ground motion in the Fylde, Lancashire, where Cuadrilla are planning to explore and in the Vale of Pickering, Yorkshire, where Third Energy are planning to explore.[vi]
Water abstraction controls maintain water quality by limiting the amount of groundwater which an operator can extract for industrial purposes. [vii] Such controls do not operate if water is sourced from a local utility provider (as has been the case to date). Accordingly water supply moves beyond legislative controls becoming an issue of utility provider policy on water allocation and priority.
Industrial Emissions Directive[viii]
There is uncertainty over whether the Industrial Emissions Directive (IED) will apply (shale gas and fracking not being a mentioned activity and not necessarily qualifying under hazardous waste/combustion capacity criteria). This brings into question if a permit under the IED will be necessary.[ix] If no such permit is applicable, IED monitoring requirements of emissions to air, water and land, including measures concerning waste may not be applied.
Best Available Techniques Reference Documents (BREFS)
Even if the IED does apply no Best Available Techniques Reference Documents (BREF) exist for drilling equipment. A BREF document is a Best Available Techniques (BAT) reference document resulting from the exchange and organisation of information regarding BAT. This is drawn up for specific activities and describes applied techniques, present emission and consumption levels, the BAT conclusion and any relevant emerging techniques. In the absence of a relevant BREF there may be increased local air pollution during drilling. There is also an absence of emission limits for non road mobile machinery above 560kW if used on fracking sites.[x]
Best Available Techniques Reference Documents (BREFS)
No BREF documents exist for the treatment of waste from hydraulic fracturing. Notably, the EU Commission has pledged to review the BREF on extractive waste in light of fracking operations but until this is done operations will continue without the relevant BREF.[xi]
Notably, the absence of a BREF for exploration related activities and fracking has been noted and proposals are in place to also design a new BREF document for hydrocarbons. This will focus on the development and operation of the onshore well pad (including directly related activities such as onsite storage). The BREF will focus on BAT to manage impacts of releases of pollutants and best risk management techniques to manage risks of releases of substances as a result of incidents. [xii] At present however, such a document is unavailable (and has been criticised by the UK Government as unnecessary) and if the proposal develops is not expected to be available until May 2018.[xiii]
Mining Waste Directive[xiv] (MWD)
The MWD should govern the way in which waste from fracking operations is dealt with. However, it is not clear whether fracturing fluids that remain underground whilst the site is still active will/will not be discarded for the purposes of the directive. As such they may only be subject to Directive controls and requirements when operations at the site are suspended or wells abandoned (suspension/abandonment may not be for a period of years after a site is established).
Environmental Impact Assessment
The Environmental Impact Assessment (EIA) Directive ensures that projects likely to have a significant impact on the environment are subject to a full environmental assessment prior to development. However, exploratory sites can fall short of the national threshold, 1 hectare or the extraction of more than 500,000 cubic meters of gas per day, meaning assessment is discretionary rather than mandatory.[xv] This has also has implications for health as the Health Protection Authority will only undertake an assessment upon an approach by the Local Authority or as part of the EIA process.
The EU Environmental Liability Directive (ELD), operating on the polluter pays principle, imposes strict liability for activities classed as dangerous and listed under Annex III. [xvi] At present shale gas operations are not included, meaning that fault or negligence is required to attribute liability for environmental damage. There has been great difficulty in the US in attributing responsibility for claimed environmental damage from fracking operations.[xvii] The implementation of compulsory baseline monitoring (under the Infrastructure Act 2015) of groundwater and seismicity should help in establishing the causal link for such damage (should it occur).
At present, shale gas operators are subject to a financial viability and financial capacity test by the Oil and Gas Authority when PEDL licences are applied for. These are aimed at ensuring companies ‘will continue in sound financial health for the foreseeable future’ and may require guarantees from parent companies.[xviii]
In considering the remediation of sites, whilst s106 agreements between operators and Local Authorities can be used to impose planning obligations to cover remediation, the current onshore oil and gas planning guidance highlights the imposition on landowners of a duty to restore the site if the operator defaults. [xix]
There is a presumption within the current onshore oil and gas guidance that when granting planning permission ‘all other regulatory controls are to be considered fully functional and effective.’ Although a well developed existing system of controls is in place, this assumption emphasises the need to ensure that the regulatory gaps that are present within it are recognised and addressed. If this is not done such a presumption risks undermining the system of environmental safeguards.
When considering environmental safeguards the role of regulatory authorities does require attention with Public Health England having called for further research into agencies analytical capacities to monitor the shale gas industry.[xx] In addition consideration needs to be given to how regulators will comply with the recent EU Recommendation (on the Minimum Principles for the Exploration of Shale Gas) requirement for regulators to maintain the distinction between their ‘regulatory’ functions and their function relating to economic development of resources.[xxi] This is particularly the case with the planning guidance stressing the importance of mineral extraction for both local and national economies as a relevant planning consideration.
It is clear that whilst the regulatory controls that currently govern shale gas exploration provide a well developed basis, a number of regulatory gaps and uncertainties remain. Recent action, such as the introduction of baseline monitoring in the Infrastructure Act and the proposed reform of BREF on both extractive waste and hydrocarbons suggests that there is a gradual recognition of the need to acknowledge that the current system does not offer comprehensive regulatory coverage. This is a welcome recognition, but further action is required to close the all the gaps currently present in the system.
For further detail on the above gaps and uncertainties see J Hawkins ‘Fracking: Minding the Gaps’ (2015) 17(1) Environmental Law Review 8
Joanne is currently working on a PhD thesis at the University of Bristol and will be taking up the post of lecturer at the University of Leeds in January 2016. Her research explores issues of regulation surrounding shale gas and fracking and the role of public participation and expertise in regulatory decision making.
[i] Department of Energy and Climate Change ‘ Providing Regulation and Licensing of Energy Industries and Infrastructureand Maintaining UK Energy Security ‘ (gov.uk) https://www.gov.uk/government/publications/regulatory-roadmap-onshore-oil-and-gas-exploration-in-the-uk-regulation-and-best-practice
[ii] JRC Scientific and Policy Reports, Assessment of the Uses of Substances in Hydraulic Fracturing of Shale Gas Reservoirs under REACH, EUR26069EN (September 2013) 38
[iii] Commission (EC) Recommendation 2014/70/EU (OJ L39/72 22.01.14) on the exploration and production of hydrocarbons (such as shale gas) using high-volume hydraulic fracturing in the EU, COM 23 Final (22 January 2014) Rec 10.1
[iv] European Parliament and Council Directive 2006/118/EC (OJ L372/19 12.12.06) on the protection of groundwater against pollution and deterioration; The Environmental Permitting Regulations 2010 (SI 2010 No. 675); The Water Environment (Water Framework Directive) (England and Wales) Regulations 2003 (SI 2003 No. 3242)
[v] European Parliament and Council Directive 2000/60/EC (OJ L327/1 23.10.00) establishing a framework for community action in the field of water policy
[vi] British Geological Society ‘Shale Gas and Environmental Monitoring’ Available at: http://www.bgs.ac.uk/research/groundwater/shaleGas/monitoring/home.html
[vii] The Water Resources (Abstraction and Impounding) Regulations 2006 (SI 2006 No.641)
[viii] European Parliament and Council Directive 2010/75/EU (OJ L334/17 24.11.10) on industrial emissions (integrated pollution prevention and control); IED is triggered if flaring more than 10 tonnes a day
[ix] M. Broomfield Support to the Identification of Potential Risks for the Environment and Human Health Arising from Hydrocarbons Operations Involving Hydraulic Fracturing in Europe. Report for European Commission, DG of Environment AEA/R/ED57281 (10 August 2012) xii
[x] European Parliament and Council Directive 97/68/EC (OJ L59/1 16.12.97) on the approximation of the laws of the member states relating to measures against the emission of gaseous and particulate pollutants from internal combustion engines to be installed in non-road mobile machinery; Machinery (Emission of Gaseous and Particulate Pollutants) Regulations 2008 (SI 2008 No. 2011)
[xi] Commission Staff Working Document, Impact Assessment to Accompany Communication from the Commission to the European Parliament, The Council, The European Economic and Social Committee and the Committee of the Regions on Exploration and Production of Hydrocarbons (Such as Shale gas) Using High Volume Hydraulic Fracturing in the EU, SWD 21 final (22/01/2014) 42
[xii] EU Commission ‘Energy and Environment: Hydrocarbon BREF’ Available at: http://ec.europa.eu/environment/integration/energy/hc_bref_en.htm
[xiii] Arthur Nelson ‘UK backing bid by fossil fuel firms to kill new EU fracking controls, letters reveal’ The Guardian (London 10 September 2015) Available at:
[xiv] European Parliament and Council Directive 2006/21/EC (OJ L102/15 15.3.06) on the management of waste from the extractive industries and amending directive 2004/35/EC
[xv] European Parliament and Council Directive 2011/92/EU (OJ L26/1 13.12.11) on the assessment of the effects of certain public and private projects on the environment, Annex II
[xvi] European Parliament and Council Directive 2008/98/EC (OJ L312/3 19.12.08) on waste and repealing certain Directives; European Parliament and Council Directive 2004/35/EC (] OJ L134/56 21.04.04) on environmental liability with regard to the prevention and remedying of environmental damage
[xvii] B. R. Nicholson and S. C. Dillard ’Analysis of Litigation Involving Shale and Hydraulic Fracturing: Part 1’ (2013) International Energy Law Review 50
[xviii] Oil and Gas Authority ‘UK Petroleum Licensing: Financial Guidance’ Available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/455523/FinancialGuidance.pdf
[xix] Department for Communities and Local Government, Planning Practice Guidance for Onshore Oil and Gas (July 2013) 17 para 73, 76; Town and Country Planning Act 1990, s106
[xx] Public Health England, Review of the Potential Public Health Impacts of Exposure to Chemicals and Radioactive Pollutants as a Result of Shale Gas Extraction: Draft for Comment, PHE-CRCE-002 (October 2013) 33
[xxi] Commission (EC) Recommendation 2014/70/EU (OJ L39/72 22.01.14)on the exploration and production of hydrocarbons (such as shale gas) using high-volume hydraulic fracturing in the EU, COM 23 Final (22 January 2014) at rec. 13.2
Categories: guest post