The politics of fracking

The development of fracking is a significant and legitimate matter of public concern. There is scope for a wide range of views: from those opposed implacably on environmental grounds, to those unconditionally supportive on economic grounds. It does not take a geo-scientist to work out that someone will be disappointed.

Drill down

Shale gas exploration using the technique known as hydraulic fracturing (‘fracking’) involves drilling down vertically and then drilling horizontally, the piping and wells spanning out tendril-like underground. A water, sand and chemical mix is then forced into the rock at high pressure to release the gas inside.

The concerns people have about such works relate to geological stability, environmental pollution (both onsite and in relation to the use of the gas obtained), over-development of the greenbelt, and damage to property.

The leading text on tort defines trespass as “any unjustifiable intrusion by one person upon land in the possession of another”. Everyone knows that a rambler meandering through a garden is a trespasser, but what about someone placing a pipeline thousands of feet below your land? It is in land, clearly, but is it in ‘your’ land?

The short answer in English law is ‘yes’ – albeit in land that you cannot meaningfully use, save for passively benefiting from a stable surface.

Trespass is actionable per se: a self-evident wrong for which no loss is required. The aggrieved owner can seek injunctions or damages. The risk of either remedy – even before one considers legal costs – makes life difficult for the trespasser.

Fans of popular culture may recall an episode of the Simpsons where an oil field was found under a school. The school’s dreams of enrichment were cut short by the erection of a drilling derrick at a 45-degree angle – the local cartoon capitalist had built on his own land but drilled beneath the school to get at the ‘school’s’ oil.

A cartoon cannot look at the legal niceties but
it would be a clear trespass in English law.

The Supreme Court was called upon to look at a more realistic example in Bocardo SA v Star Energy. They found that an energy company had trespassed by running horizontal tubes for petroleum extraction at between 950 and 2,800 feet beneath Bocardo’s land.

The extraction had been going on for many years and it would appear that Bocardo only found out about it from a map, rather than from any interference with the enjoyment of its estate.

National resource

The Supreme Court acknowledged that there was an absurdity in talking about trespass in the context of works which did not in any meaningful way affect the landowner: the owner was neither disturbed nor displaced. Moreover, the landowner had no right to the petroleum, it being a national resource vested in the Crown and exploited under licence. What the surface landowner did own was the rock and earth in which the petroleum lay.

The trespass existed but the damages – at £1,000 – were essentially nominal: it is fair to assume that the costs of the litigation were not.

An energy company can apply under section 7 of the Petroleum Act 1998 for the grant of ancillary rights to allow it to exploit the extraction licence the Crown has given it. A court can give the consent (subject to conditions) for the pipes to be drilled and used. The landowner needs, however, to have unreasonably refused to consent or has demanded terms which are unreasonable. Such applications will not be cheap.

It was open to the Supreme Court to use the common law to define the limits of subterranean trespass but, perhaps wisely, they avoided stepping into what is essentially a political argument.

The government has said that the next Queen’s Speech will contain a commitment to change trespass laws in relation to fracking. The government’s aim is, in the words of the BBC, “to boost fracking” and the words “red tape and regulation” followed on predictably in the reported words of the PM’s spokesman. One assumes that they have in mind litigation risk arising from private rights rather than over regulation.

It is not clear what the government will propose, but it is clear that trespass is the focus. It would make sense to make intrusions beneath a certain depth non-trespassory – the devil may be in the detail, but it is preferable to attempt to draft that detail than have landowners owning Hades.

If such intrusions become non-trespassory, it will be relatively simple to ensure that other tortious remedies – those relying on actual damage to
land – remain unaffected, thereby protecting property owners.

If the risk and cost of litigation about trespass is removed then it would follow that satellite litigation through section 7 of the Petroleum Act would be removed too. At present, an energy company faced with opposition has to decide whether to engage section 7 or wait to get sued for trespass. This is not red-tape but it risks litigation ‘on principle’ or litigation for its own sake, allowing litigation to be used as a ransom tactic.

There has been a suggestion that a compulsory purchase regime may be used. This makes sense for works near the surface, but otherwise leaves in place the absurdist position that surface owners own and are entitled to control many hundreds or thousands of feet beneath their properties as a matter of private right.

Legal effort should be focused on protecting
the surface users of land. Energy companies
could remain liable for damage, perhaps with a government bond or reinsurance pool to ensure that proper environmental and other remediation is carried out.

Legitimate concerns

Given the court’s award of damages in Bocardo, it is to be hoped that the government does not create a general compensation scheme that allows landowners to directly share in the profits of fracking. General compensation would also support the absurdity of ownership at great depths and would enrich luck at the expense of effort.

The legitimate concerns of landowners will be met by obligations to remediate or not to damage property. Their concerns as engaged citizens in a wider polity will be met by the planning process, the environmental controls and the regulatory processes. If fracking is allowed, it is inconceivable that it will be without regulation at the environmental, safety or planning level.

The system will need to respect private law rights too, but they should be rights worth having and respecting. Using the trespass to ventilate opposition to fracking in principle is a bad thing. People are admirably motivated by concerns that are properly within the public (political) sphere. The private law right is a mere proxy being used to sidestep the need to win, shape or accept the result of the public argument.

The proper place for such concerns is in public law: with regulation and red tape in place to meet public needs and with proper and proportionate protection for private law rights. SJ

David Stockley is an associate in the commercial property team at Russell-Cooke