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Fracking Gets Its Backing?

It is believed that the next Queen's Speech will announce a relaxing of trespass laws, in order to allow companies to exploit shale gas reserves.

The move would bring these reserves in line with coal mines under the law.

What is Currently Happening in the UK?

Currently, IGas PLC is operating at the Barton Moss site in Salford. As of this month, they have found shale gas in the samples they have taken from the site, and have stopped drilling whilst they analyse the samples. This isn't a short process, and can take around six months.

The discovery of shale gas doesn't necessarily mean a company will continue operations at a site and the analysis of samples helps decide whether drilling is viable.

The Current Legal Position Regarding Landowners and Natural Resources

The Queen's speech itself has been pushed back to June 3rd, to allow Downing Street more time to prepare it. Meanwhile, it is thought that it will contain reference to a proposal allowing fracking companies to access shale gas reserves on privately owned land, even if the owners object.

Coal mining firms already have this right, but currently oil and gas firms require access permission from landowners. This permission can be circumvented, but only with Whitehall approval via a lengthy and expensive procedure, to the extent that this option is sometimes impractical.

A previous legal case involved Mohammed Al Fayed's company Bocardo, and the alleged trespass by an oil company. In this case, the Court of Appeal decided that the oil company had trespassed, but the compensation Bocardo were entitled to was only £1,000.

As can be seen by the rights of coal mining firms, and the decision in the Bocardo case, the legal position of landowners and natural resources is very different to that of the US.

At the start of the year, the Prime Minister announced a compensation scheme for communities affected by fracking operations. The details haven't been finalised yet, though the proposals suggest:

  • Local authorities would be entitled to all of the business rates collected from shale gas operations, rather than the usual 50%
  • 'Communities' would receive £100,000 per site and up to 1% of all revenues from production

The distribution of this funding, including how much would go to directly affected landowners is currently unknown.

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Dated: 03/04/2014

Author: Greg Cox

Fracking - oil and gas

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