Access to Land
There are a number of stages that relate to shale gas development and broadly these are broken down into three stages:
- The Preparatory Stage – this can involve seismic testing and the drilling of groundwater monitoring boreholes.
- The Appraisal Stage – Construction of the well pad and other infrastructure, drilling wells, hydraulic fracturing and monitoring results (gas flow)
- The Production Stage – More permanent/long term infrastructure, production wells, further exploration/wells and possible power generation, gas-processing infrastructure.
What does this mean for landowners?
A landowner will normally be approached in the first instance by agents acting on behalf of the fracking company. The first stage, as outlined above will be to carry out seismic testing. The Agent will endeavour to negotiate access to your land in order to study the sub-surface geology. Some landowners have reported damage to structures – from the explosive charges used – and also that fences and hedges have been damaged.
Typically only a licence is granted to the company and is limited to just carrying out seismic testing. The company must have insurance to cover any damage caused and any landowner agreeing to seismic testing must satisfy themselves that the insurance is in place and is adequate.
Only a nominal fee is usually paid to the landowner for access to carry out a seismic survey.
As a landowner can I refuse access to a company wishing to carry out a seismic survey?
Yes you can.
In a recent development, INEOS has threatened to apply for a court order under the Petroleum Act 1998 and the Mines (Working Facilities & Support) Act 1966 in order to force the National Trust to allow INEOS access to its land for seismic surveys. Legal action of this kind is very unusual. In order to succeed INEOS will need to demonstrate that its proposals are “in the national interest”.
As a landowner can I refuse access to allow fracking on my land
Yes you can.
Allowing access on your land for the second and third stages of shale gas development has much bigger implications for landowners.
These stages involve longer-term formal agreements, such as a 25 year lease or longer. An access road and a well pad will be constructed, wells drilled, hydraulic fracturing will be carried out, flaring is likely to take place. If the gas flow is successful, several wells may then be drilled and hydraulically fractured on a single well pad. Pipes will be laid and permanent infrastructure such as tanks and pipes will remain on the pad. In addition a company may return to re‑frack the same wells three to five years later. Even during production (after the works have been completed) you may still have HGVs visiting the site to remove waste water. Additional land may be required for ancillary use, including plant and so forth.
It is usual that a landowner will be paid a rent for the land and that the company may agree to pay a percentage payment in respect of the gas extracted/sold.
It is important to appreciate that when a shale well is first fractured, if the frack is successful then initially a large volume of gas is extracted. However the flow rate falls away quickly and this means that any production-related payments you receive will also reduce along with the declining flow of gas. Although the wells may continue producing for many years, it is typically at a much reduced rate. And some wells cease producing gas altogether after a relatively short period of time, unlike conventional gas wells.
How can they gain access to my land?
There are two ways a fracking company can gain access to your land:
1) By Negotiation
Although your land may be included in a Petroleum Exploration and Development Licence area (a PEDL), a fracking company does not gain access rights onto your land through the licence. Therefore in the majority of cases the company negotiates access rights with the landowner.
But what happens if as a landowner I refuse to allow them on my land or I cannot agree terms?
It is hoped that a fracking company will respect the wishes of the landowner, however the fracking company can, if it chooses, apply to the courts under the Act detailed below.
2) Ancillary Rights under the Petroleum Act 1998 and the “National Interest”
This allows a fracking company that has a PEDL to apply to the courts under the Petroleum Act of 1998 – which includes rights to access land to extract hydrocarbons (shale gas) and to build infrastructure on your land.
This Act does not grant an automatic right to the fracking company. The onus is on the fracking company to prove to the Secretary of State and the courts that the gas extraction is in the national interest and that negotiations have failed.
It is important to note that this legislation has not been tested in court, as previously most access has been agreed by negotiation. It follows therefore that any contested case is likely to be lengthy, complex and costly to any company bringing a case to court. Some consider that the legislation itself should be challenged because it does not seem appropriate in relation to the large scale of the unconventional (fracking) industry. Any court action may also be very damaging to the reputation of any fracking company – being seen to “force” landowners to have fracking take place on their land against their wishes. Plus it may negatively impact subsequent negotiations with other landowners. It is very likely to create widespread negative publicity.
A further challenge is whether shale gas can be considered to be in the “national interest” as both the Labour Party and the Liberal Democrats intend to ban fracking. There is a moratorium in place against fracking in Wales and Northern Ireland and it has been banned in Scotland.
At the moment, the Government does not consider that shale gas is a Nationally Significant Infrastructure Project.
If rights of access are granted against the landowners wishes the fracking company has to pay the landowner’s legal costs and any compensation that is paid will be assessed in line with compulsory purchase principles.
Landowners therefore do have the right to refuse access to a fracking company. The onus is on a company to prove certain grounds and the outcome of a court case is by no means certain. There are many negatives associated with a company taking legal action against a landowner, including uncertainty, delay, costs and negative publicity.
This information is provided for information purposes only. Concerned Farmers of Yorkshire, its members or associates cannot be held in any way responsible for the actions or decisions taken by others, any individual, persons or group. It is, at all times, the sole responsibility of individuals, persons and/or groups to independently obtain and satisfy themselves that they have obtained all guidance, professional advice and information as they deem necessary and appropriate.