Life Cycle

In the UK the Crown owns mineral rights. So the coal, the shale and the associated gas beneath your land, your house, your business, are not owned by you, they belong to the state. As a consequence the state gives permission, through a licence,  for them to be exploited. Not you. However, the state does not give access rights so planning permission is necessary to get to a suitable location for drilling.  A land owner therefore has to give a drilling company access to a drilling site by either selling or leasing the land to them, or by granting access.

Having obtained a PEDL an exploration company also needs to:

• Arrange access to a site through negotiation with a land owner
• Seek permission from the Coal Authority if operations are to penetrate coal seams.
• Apply for and obtain local planning permission to develop the site from the Minerals Planning Authority (involving local authority, district and county councils). The MPA determines if an environmental impact assessment is required
• Apply to the Environment Agency for an environmental permit
• Apply to the Health & Savery Executive for a permit
• Lastly the Secretary of State for Energy and Climate Change issues a license for extraction and their discretion.

In order to perform a test drill a company needs to first obtain all of these permissions. In order to produce gas a company also needs to submit a Field Development Plan to DECC.

If unconventional gas were to be exploited in the UK as in the USA then production it is expected to peak around 2035.

If you don’t own the minerals under your land then you own the land, right? You might think that you own your land but actually you don’t own that either, that belongs to the state also. You may have property rights to the land and what is on it to use either for a fixed period of time through a lease, or in perpetuity through the freehold. The state can revoke your right to use the land through compulsory purchase. If your next door neighbour owns the a minerals license such as a PEDL then they can drill under your property to get at them. You don’t have much say in the matter, although see Bocardo vs Star Energy.

NB The Chancellor announced new planning guidance by July 2013 to provide “clarity” and “ensure an effective planning system is in place” and community incentives.