Monday 23rd May saw the first fracking license to be granted in 5 years. North Yorkshire Councillors convened over multiple days to hear all sides of the story regarding Third Energy’s application to hydraulically fracture or ‘frac’ their KM8 well at Kirby Misperton in North Yorkshire.
Hydraulic fracturing is a technique whereby water is injected at high pressures to stimulate oil or gas flow from reservoirs that have insufficient permeability for the oil or gas to flow at economic rates without stimulation. Although not yet standard practice in the UK around 200 wells have used similar techniques since the early 1980s.
Third Energy are not new to this area after having been operating in North Yorkshire for over 20 years extracting gas from four fields including Kirby Misperton, where the well site has been drilled since the 1980s. KM8 was first drilled in 2013 when samples were taken at different depths to assess the hydrocarbon (oil & gas) potential. Analysis of the gas bearing zones concluded that they should be appraised further and the process of fracking will be used to stimulate the gas flow from the inter-bedded sandstone and shale sections. This initial analysis has indicated there could be a significant new gas reservoir in Third Energy’s license areas and could contribute to improving the UK’s energy security.
Full consultation was carried out with the local community, the correct planning permissions and relevant permits are being sought, and despite 4,375 objections and just 36 letters of support, North Yorkshire County Council approved the shale gas appraisal.
What does this mean for the local community?
Although the Local Authority have approved their planning application, Third Energy cannot undertake any fracking on site until further consents and approvals have been obtained from the planning authority and Environment Agency in order for the Secretary of State to formally consent to the operation.
Before Third Energy starts any hydraulic fracturing, it will provide the agreed pre-operational community benefits of £100,000 per well site, an agreement that was announced in 2013 by the Chancellor of the Exchequer. In addition to this, if the well appraisal leads to commercial production, 1% of gross revenues from production will be paid into the local community fund, and this could total around £70 million over 20 years* if the estimates of recoverable gas are accurate and realised.
*based on current gas prices, under the UKOOG Community Charter, production revenues from 1 trillion cubic feet (tcf) of gas.
How can Groundsure help?
The actions of North Yorkshire council could set a precedent for other councils to approve fracking applications. We are therefore likely to see more applications for this technique across the country. Groundsure collects planning applications relating to fracking and other energy activities on a weekly basis and these are included within our Energy report as standard, applications which may not show up in a standard planning search. Ensure you are the first to hear about these developments, especially ahead of purchase.
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.
