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Planning and exploration for hydrocarbons: High Court holds exploration is mineral extraction

On the topical issue of exploration for hydrocarbons and "fracking" the High Court has recently held that it amounts to "mineral extraction" within the National Planning Policy Framework. This comes at the same time as DCLG's new guidance "Planning Practice Guidance for Onshore Oil and Gas" (19 July 2013). That Guidance states:

"What are the phases of onshore hydrocarbon extraction?

9. There are three phases of onshore hydrocarbon extraction: exploration, testing

 (appraisal) and production.

When is planning permission required for the extraction of hydrocarbons?

10. Planning permission is required for each phase of hydrocarbon extraction,although 

some initial seismic work may have deemed planning consent under Part 2 of Schedule

 22 to the Town and Country Planning (General Permitted Development) Order 1995 ...

 i) Exploratory phase

What is the exploratory phase of hydrocarbon extraction?

11. The exploratory phase seeks to acquire geological data to establish whether

hydrocarbons are present. It may involve seismic surveys, exploratory drilling and,

in the case of shale gas, hydraulic fracturing...."

In Europa Oil & Gas Ltd. v. Secretary of State for Communities and Local Government & Leigh Hill Action Group (Ouseley J., 25 July 2013, transcript not yet available) concerned the issue whether speculative exploration for hydrocarbons amounts to “mineral extraction” within para. 90 of the NPPF and is therefore not necessarily deemed to be “inappropriate development” within the green belt.

The Claimant applied to quash the Secretary of State's dismissal of an appeal against the refusal of planning permission for a development which involved exploratory drilling for hydrocarbons in the Holmwood Prospect in the Surrey Hills AONB and Green Belt. It involved the construction and use for an estimated 18-week period of a drill site for the drilling of an exploratory borehole. On Appeal the inspector found that there was no alternative site from which to explore the hydrocarbon prospect which lay below a village and that, subject to the overall planning balance, the development was in principle consistent with government policy on exploring onshore oil and gas resources and in the public interest. The evidence was that the probability of finding hydrocarbons was high by industry standards. However, the Inspector found that it did not amount to “mineral extraction” since its purpose was to search for and appraise any hydrocarbons, rather than to exploit them. As a consequence it was “inappropriate development”. The harm by way of inappropriateness, together with the additional harm to the Green Belt and AONB, was not clearly outweighed by the benefits of the scheme and therefore the necessary very special circumstances did not exist.

Following the publication on 19 July of DCLG's Planning Practice Guidance and the accompanying ministerial statement, the Secretary of State decided not to defend the Inspector’s conclusion that exploration fell outside the definition of “mineral extraction". Leith Hill Action Group continued to defend that aspect of the Inspector's decision.

Ouseley J. agreed that the term “mineral extraction” in NPPF para. 90 covered the exploration and appraisal stages of mineral development. He held that, since the exploitation of a mineral resource was not possible unless that resource had first been identified and appraised, it would be illogical for those initial stages to be subject to a higher hurdle than the exploitation stage. He also held that, in considering whether the proviso in NPPF para. 90 that mineral extraction schemes must “preserve the openness of the Green Belt” and not “conflict with Green Belt purposes” in order to avoid being inappropriate development should be assessed having regard to the fact that any such scheme would involve at least some significant temporary development. Accordingly, the mere presence of significant development in the Green Belt could not be taken to breach that proviso.

In the light of these conclusions, Ouseley J. held that the Inspector’s decision should be quashed since it could not safely be said that absent his misinterpretation of NPPF para. 90 his decision would inevitably have been the same. Permission to appeal to the Court of Appeal was granted to the Action Group both on the interpretation of NPPF para. 90 and on whether the decision would have been the same but for the Inspector’s error of interpretation.

Charles Banner represented the Secretary of State.

Stephen Whale represented the Leith Hill Action Group.