Will recent sales of Offered Blocks affect properties in your local area?

In July 2014 the Oil and Gas Authority (OGA) – a new executive agency sponsored by the Department for Energy and Climate Change (DECC) – announced the opening of the 14th round of onshore licensing. During this process, hydrocarbon operators such as Cuadrilla are able to bid for areas to explore and extract oil and gas reserves. These areas are known known as Offered Blocks. The bidding process closed in October 2014 and the OGA made their first announcements of the operators in August 2015, with the second tranche of successful applicants announced in December 2015.

In total 177 blocks were announced. 159 of these had to undergo an additional assessment under the Habitat and Species Regulations 2010 due to their sensitive localities. 83% of these licences relate to unconventional oil and gas (shale, coalbed methane and mine methane vent gas). These are in addition to the areas currently licensed under previous rounds.

Although these areas have been offered to companies, these do not give the operators consent to drill or explore; planning permission and the necessary environmental permits will still need to be obtained from the relevant authorities. However, once these have been obtained, under the Infrastructure Act 2015, operators are no longer required to obtain landowner’s permission if the drilling takes place below 300 metres. Additionally, drilling won’t be allowed in National Parks, Areas of Outstanding Natural Beauty, groundwater protection zones (Source Protection Zone 1) and World Heritage Sites unless it takes place below 1200 metres.1 So in effect, an operator can site their drilling equipment just outside one of these areas; drill to below 1200m, and then drill under and into these sensitive areas.

What does this mean for communities?

The process of hydraulic fracturing (fracking) requires the use of large volumes of water. It is estimated that one well will use between 2 and 8 million gallons of water depending on depth of the deposits and the underlying geology at the site – that’s the equivalent of 4 to 15 Olympic-sized swimming pools. Due to the large volumes required this will increase road traffic as tankers will be needed to transport clean water to the site and remove waste water. Groundsure have estimated that between approximately 1,200 and 4,850 tanker journeys could be required per well.*

The oil and gas industry has committed to a benefits package for communities that host shale gas and oil development. This includes:

  • £100,000 in community benefits per well-site where fracking takes place (at the exploration stage)
  • 1% of revenues at production will be paid out to communities
  • Operators will publish evidence each year of how they have met these commitments.1

It is important that potential purchasers are aware of hydraulic fracturing in their area. Groundsure recommends people to review how this technology may affect their property before committing to a purchase. For more information about how to check a property or for more information please contact Groundsure.

* the average fracking well uses between 2 and 8 million gallons of water. The average medium sized tanker can hold around 15,000 litres. If we estimate that 2 journeys will be made by each tanker, the total number of tanker journeys will be between 1212 and 4848.

2 million gallons = 9,092,180 litres

8 million gallons = 36,368,720 litres

Tanker size = 15,000 litre capacity

9,092,180/15,000 = 606 X 2 journeys = 1212

36,368,720/15,000 = 2424 X 2 journeys = 4848

1. https://www.gov.uk/government/publications/about-shale-gas-and-hydraulic-fracturing-fracking/developing-shale-oil-and-gas-in-the-uk

This article was submitted to be published by Groundsure as part of their advertising agreement with Today’s Conveyancer. The views expressed in this article are those of the submitter and not those of Today’s Conveyancer.

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