Today’s judgement in the challenge against oil production at Horse Hill has clarified the law on what must be considered when councils decide on fossil fuel planning applications.

In a majority judgement, three Supreme Court justice overturned rulings at the Court of Appeal and the High Court and challenged several key legal arguments.

The justices were considering a case brought by campaigner, Sarah Finch, against Surrey County Council’s grant of planning permission for long-term oil production at Horse Hill, near Horley.

It centred on what should be included in an environmental impact assessment (EIA), the detailed studies that accompanies some planning applications.

DrillOrDrop’s report on the judgement and the background to the case

Today’s judgement is likely to have implications for future coal mines and, possibly, road building projects, as well as oil and gas sites.

DrillOrDrop has been looking at the key principles and arguments in the judgement.

Horse Hill planning permission was unlawful

Lord Leggatt, supported by Lord Kitchen and Lady Rose, concluded that Surrey County Council’s decision to approve oil production at Horse Hill was unlawful because it failed to assess the climate effects of burning the extracted oil, known as downstream emissions.

The council had argued that it needed to take into account only the greenhouse gas (GHG) emissions from the site itself, known as direct or scope 1 and 2 emissions.

Downstream emissions are an inevitable consequence of oil extraction

The judgement said extracted oil would be sent to refineries and the refined oil would eventually be burned, producing greenhouse gas emissions. This represented:

“the strongest possible form of causal connection – much stronger than is required as a test of causation for most legal purposes”.

Downstream emissions are indirect effects of a development

The judgement concluded that greenhouse gas emissions from the burning of extracted oil can be regarded as “indirect effects” of a project, for the purposes of the rules covering environmental impact assessments.

Lord Leggatt said:

“The extraction of the oil is not just a necessary condition of burning it as fuel; it is also sufficient to bring about that result because it is agreed that extracting the oil from the ground guarantees that it will be refined and burnt as fuel.

“The only issue is whether the combustion emissions are effects of the project at all. It seems to me plain that they are.”

“No geographical limits” on environmental effects

The judgement said the rules that cover EIAs do not impose any geographical limit on the environmental effects of a project. It said:

“In principle, all likely significant effects of the project must be assessed, irrespective of where (or when) those effects will be generated or felt.

“There is no justification for limiting the scope of the assessment to effects which are expected to occur at or near the site of the project. The fact that an environmental impact will occur or have its immediate source at a location away from the project site is not a reason to exclude it from assessment.

“There is no principle that, if environmental harm is exported, it may be ignored.”

Climate change is a global problem

The judgement said:

“Climate change is a global problem precisely because there is no correlation between where GHGs are released and where climate change is felt.

“Wherever GHG emissions occur, they contribute to global warming. This is also why the relevance of GHG emissions caused by a project does not depend on where the combustion takes place.

“If an activity is carried on which will inevitably result in significant GHG emissions, people who carry on the activity cannot be heard to say: ‘These emissions are not effects of our activity because they are occurring far away among people of whom we know nothing’.”

Downstream emissions can be calculated

The judgement said greenhouse gas emissions from the use of the oil could “easily be quantified”.

Emissions from the burning extracted oil are within the developer’s control

The judgement said:

“The combustion emissions are manifestly not outwith the control of the site operators. They are entirely within their control.

“If no oil is extracted, no combustion emissions will occur. Conversely, any extraction of oil by the site operators will in due course result in GHG emissions upon its inevitable combustion. It is true that the time and place at which the combustion takes place are not within the control of the site operators. But the effect of the combustion emissions on climate does not depend on when or where the combustion takes place. Those factors are irrelevant to the size and significance of the environmental impact”.

Misguided to suggest planning authorities are unable to address climate change

In the judgement, Lord Leggatt said:

“I do not accept the premise that it would be wrong for a local planning authority, in deciding whether to grant planning permission, to take into account the fact that the proposed use of the land is one that will contribute to global warming through fossil fuel extraction”.

Local authorities must “have regard to national policy”, the judgement said. But it added:

“it does not follow that the planning authority has to ignore adverse effects on climate of a proposed project or adopt an interpretation of what constitute such adverse effects which is contrary to reality.

“Just as beneficial indirect effects of a project on climate – for example, the “green” energy that would be generated by a project to develop a wind farm or solar farm – are clearly a relevant matter for the planning authority to consider, so corresponding adverse effects are also a material planning consideration.”

Role of other regimes

The judgement rejected the argument from Surrey County Council and the developer, Horse Hill Developments Limited, that other regimes regulated downstream emissions and so the EIA did not need to consider them.

It said this was “a clear legal error”.

High Court finding on downstream emissions

The Supreme Court judgement rejected the High Court’s finding that downstream emissions were, in law, incapable of being indirect effects for the purposes of an EIA because there were intervening steps between extraction and burning of the oil. Lord Leggatt said:

“I cannot accept that the existence of this intermediate process has the legal significance contended for by the developer and attributed to it by the judge. The process of refining crude oil does not alter the basic nature and intended use of the commodity.”

He said:

“The fact that there is a series of intervening stages between the extraction of the oil and the ultimate generation of emissions does not itself provide any rational basis for denying that the two are causally linked”

Court of Appeal conclusion on discretion of decisionmaker

The judgement also rejected the conclusion of the Court of Appeal that it was up to local authorities to decide whether to take into account downstream emissions from fossil fuels in the EIA. It said:

“Without any criteria to answer these questions, developers and decision-making authorities are left completely adrift… It would be a recipe for unpredictable, inconsistent and arbitrary decision-making”.

The judgement also said the Court of Appeal had made “an error” in concluding that the quantity of oil that would be combusted would depend on decisions yet to be made downstream, when all the parties agreed that “all the oil would be combusted”.

Importance of public participation

The judgement discussed the importance of public participation in the EIA process. It said this should provide “early and effective opportunities to express comments and opinions” and provide the public with information.

Lord Leggatt said:

“You can only care about what you know about”.

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