Fracking: What you need to consider

Hydraulic fracturing, which is more commonly referred to as fracking, is a controversial topic that has attracted widespread media attention over recent months. It’s much maligned by environmental campaigners, who would rather renewable energy sources were used as opposed to fracking, which, while cleaner than coal, is nevertheless energy from a carbon source.

The Conservative government has pledged to ‘go all out’ for shale gas and fracking. In February this year, the Infrastructure Act 2015 received royal assent, which confirmed that rules related to trespass do not apply if access to land is required for fracking at depths greater than 300 metres.

This means that energy firms no longer have to await permission from landowners to access land for deep level investigations – except in areas that are protected groundwater sources and ‘other protected areas’, which are yet to be defined by
the government.

What is clear, however, is that the number of potential locations for onshore oil and gas exploration is extensive. When looking at published UK maps of licensed areas combined with locations that are ‘under consideration’, it paints a clear picture that over half of the country may potentially be touched by some form of energy exploration in the future. In fact, the only county in England not included is Cornwall.

Impact on communities

Before any exploration starts, planning permission is required, which includes public consultation. This may well be met by vociferous opposition from community and environmental groups who are concerned at the impact on the community
at large.

While the planning authority assesses a range
of factors, including economic and social considerations, a large emphasis is on the environmental factors, such as air quality, noise, traffic levels, light pollution, seismic effects, and risk of land contamination. All of these could prove to be issues for the local community and the overall enjoyment, or even future saleability, of homes in the local area.

As onshore energy exploration starts to pick
up its pace, homebuyers will become increasingly mindful of fracking and its impact on communities. As a result, they may well be looking for guidance from their conveyancing solicitor when purchasing a property to help identify any such impact that may exist locally.

I spoke to Andrew Wiseman, a specialist in UK and EU environmental law and the chair of the Department for Environment, Food, and Rural Affairs’ contaminated land expert panel, to find out his view on what conveyancing solicitors need to consider when progressing transactions in areas close to exploration sites.

Insider’s view

Q: Fracking is controversial, with a lot of community and environmental groups challenging fracking in the UK. What do you believe will be the main areas of challenge?

A: There are a number of areas where there could be potential challenges. The first one is related to attempting to stop fracking from taking place beneath someone’s land or property. However, the Infrastructure Bill, which includes a provision that means fracking can occur underground without requiring the landowner’s consent, has now been passed.

There will also be localised challenges from
a nuisance perspective. For example, it will be incredibly noisy where the drilling takes place at the well pads, creating localised noise pollution. Likewise, the site will have to be staffed 24 hours
a day, meaning it will need to be lit at night, suggesting the potential for light pollution.

For property owners and buyers, seismic activity may also be a consideration, as this has been linked to explorative drilling in the past. For example, in 2011 two tremors were felt near to the Preese Hall-1 well in Blackpool. As a consequence, those located in or moving to areas close to fracking sites will be concerned about potential land movement and its effect on their homes.

Possibly the biggest risk for the community, however, is related to traffic. You will have a huge number of lorries going on and off the site, not just in the construction and exploration phase but also while the fracking is taking place. They will be taking the required chemicals, sand, and water to assist in the extraction of gas. Recent research from Amec Foster Wheeler suggested that residents could see as many as 50 lorry journeys every day over a three-year period.

Finally, another area that will be on everyone’s minds is the potential impact on a property’s future value. A recent survey interviewed 60 estate agents – all located in areas where energy companies have applied to start the extraction process – and identified that two-thirds of those felt house prices would be negatively impacted by localised fracking, with the majority estimating that values could decrease by as much as 10 per cent.

Q: What do you believe conveyancing solicitors need to be aware of regarding fracking, in order to ensure appropriate guidance is provided to clients?

A: While there is no prescriptive professional obligation for conveyancers to provide information related to fracking to their clients, buyers will want to be made aware of any potential risks related to the property and the area in which they are planning to buy.

They will want as much information as possible up front, so that they can make informed decisions related to the purchase prior to completion, and it is likely that they will assume this is included within the standard conveyancing service.

Therefore, solicitors potentially run the risk that if they don’t provide details, not only might they have a disgruntled client, but, at worst, the client could claim that their solicitor was negligent in not obtaining associated information as part of the due diligence process.

As I said, while there is no formal obligation, there may well be an expectation for such information to be provided, so firms need to
be mindful of this.

Q: Won’t permission need to be sought by energy firms before any exploration takes place on privately owned land?

A: No. With the changes introduced in the Infrastructure Act, permission is no longer required for deep level fracking below someone’s home or land. So, for owners of property perhaps even up to half a mile away, drilling could take place beneath them without the need for their consent.

Ultimately, the minerals in the land are considered ‘crown property’, while the land itself belongs to the individual. The government has, however, modified the long-standing law to now say that while you may own the land, an automatic right has been granted to allow companies to drill underground without the need to apply for your permission, so buyers should be aware of this.

Q: What do conveyancers need to start planning now, in order to be ready to support their clients with queries relating to fracking exploration?

A: Firms need to start thinking about how they will manage fracking enquiries: They should start considering what should be included in standard client care letters and what advice they should provide when handling conveyancing in affected areas, and look at what data is out there to support them.

For example, the SiteSolutions energy and infrastructure report is one that we have access to, and it provides guidance on a number of risks within a specific radius of a property, which means the client has sight of developments happening within the vicinity of their proposed home before the transaction is completed. SJ

Chris Loaring, pictured, is commercial manager at Argyll Environmental, a Landmark Information Group company. Andrew Wiseman is a partner at Harrison Grant Solicitors