Onshore Oil and Gas Licensing Strategic Environmental Assessment and Habitat Regulations Assessment

The UK Onshore Oil & Gas: Planning and Environment Summit, July 2016

Oil & Gas Licensing

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Oil & Gas Licensing

► Oil and Gas Authority (OGA) issues licences through competitive licensing rounds

► Oil and gas licensing was transferred from Department of Energy and Climate Change (DECC) to the OGA on 1st April 2015

► Seaward and landward licences offered

► Licences provide exclusivity for exploration and production from a defined area for a set period

► Applicant must satisfy OGA of competence, financial viability and financial capacity

Oil and Gas Licensing Assessments

Strategic Environmental Assessment (SEA)

► Undertaken before launch of licensing round

► Identify, characterise and assess likely significant constraints and effects

► Provide clarity to operators

► Reduce environmental risks and improve outcomes

Habitat Regulations Assessment (HRA)

► Undertaken before award of licences

► Identify any likely significant environmental effects on European designated nature conservation sites

► Requires further assessment if significant effects are identified

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Onshore Oil and Gas Areas Subject to SEA

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2 onshore Licensing Rounds subject to SEA

► 13th round (2008)

► 14th round (2010) and revised (2014)

14th round

► Suspended when hydraulic fracturing for shale gas at Preese Hall triggered two small seismic shocks in April/May 2011

► Hydraulic fracturing halted while these events were investigated

► Suspension lifted in December 2012, with new controls to mitigate seismic risks

► Secretary of State also announced that SEA to be restarted

Approach to Onshore Licensing SEA

Qualitative assessment using information based on

► past licensed activity

► evidence from the US, UK and EC research

► publicly available information from industry

Quantitative assessment informed by low and high activity scenarios for conventional and unconventional oil and gas

Location of exploration sites and production pads unknown, although consideration given to effects on five areas most likely to contain hydrocarbons

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What Effects were Considered in the SEA?

Likely significant effects on the environment

► Biodiversity & nature conservation

► Population including demographics, socio-economics

► Health

► Land use, geology & soils

► Water & flood risk

► Air quality

► Climate change

► Waste & resource use

► Cultural heritage including architectural and archaeological heritage

► Landscape

Covering short, medium and long-term effects, permanent and temporary effects, positive and negative effects, and secondary, cumulative and synergistic effects

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No likely significant effects from conventional oil and gas activities

Likely significant effects from unconventional oil and gas activities, when compared to the existing oil and gas sector concerning

► employment opportunities, training and investment

► community benefits package

► hydrocarbon reserves

► flow back management and treatment

► carbon emissions

Potentially locally significant effects on communities (from disturbance and transport), land use, water, air and landscape

Findings

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Mitigation Measures

Mitigation measures for operators include

► environmental awareness statements as part of licence application

► careful site selection

► the systematic use of “reduced emissions completions”

► phasing water demand

► increasing onsite recycling of flowback water

► waste management plans

► transport plans

Mitigation measures for DECC include

► research to develop more effective extraction techniques for shale gas which would minimise whole-life cycle GHG emissions

► updated guidance to licence applicants

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Example Monitoring Measures

SEA

Topic

Monitoring Indicators Source(s) of Information

Water Annual (where information allows) trends

in:

Groundwater quality monitoring

throughout the lifecycle of onshore oil

and gas exploration and production.

Surface water quality monitoring

throughout the lifecycle of onshore oil

and gas exploration and production.

Volumes of water consumption

during hydraulic fracturing from

exploration and production sites

Volumes and composition of

wastewater water (including

flowback)

Consented/permitted aqueous

discharges from exploration and

production sites

Environment Agency (EA),

Scottish Environment

Protection Agency (SEPA),

Natural Resources Wales

(NRW)

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► Majority of respondents did not support the licensing proposals

Consultation

► 14 week consultation period (December 2013 to March 2014)

► 2,400+ responses received

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Post Consultation

Following conclusion of consultation, analysis of responses and consideration of assessment, new licensing round announced by Energy Minister on 28th July 2014

► Additional planning guidance published

► Included a requirement on licence applicants to produce a Statement of Environmental Awareness

► Statement should include how the applicant will address the mitigation measures identified in the SEA

► Unless DECC was satisfied with the Statement the application was rejected

► Further assessment of individual licence applications required

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14th Round Licensing and HRA

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► 14th Licensing Round closed on 28th October 2014

► DECC received 95 applications covering 295 blocks in England, Scotland and Wales

► Following scrutiny and the decision not to award licences in Scotland and Wales, 159 blocks were taken forward

► Each block was assessed against the requirements of the Conservation of Habitats and Species Regulations 2010 (SI 2010 No. 490) (as amended). Required

► an assessment of likely significant effects (LSEs) on European sites, either alone or in combination with other plans and projects

► if significant effects likely, then licence block was subject to an Appropriate Assessment (AA)

► licences could only be awarded if they will not result in an adverse effect on the integrity of any European site or, if it could have an adverse effect on integrity, that it can pass further tests

Approach to the HRA

Assessment of LSEs considered

► the nature of any designated sites and their interest features that are present within each block and within a 10 km search area around the block

► the licensable activities

► for those blocks that did not contain a European site and were more than 10 km from a European site, such a low likelihood of LSE was identified, as to rule out the requirement for a further detailed assessment

For the remaining blocks, an AA was completed which considered

► whether there could be any adverse effects on integrity (AEOI) on any European sites in relation to the four key stages of exploration and production activities (non-intrusive exploration, exploration, production development and production)

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HRA Data

► GIS data from the Joint Nature Conservation Committee (JNCC) website provided all information related to the designated features of interest as well as the spatial data for each site

► OGA provided block information

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Assessment

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Site and

broad

interest

feature types

Possible adverse

effects

Moderating factors Adverse effects can be avoided by:

North York

Moors SAC*

Upland

moorland

habitats

Part site is within

licence block NZ51

Direct encroachment /

habitat damage / loss

inside the European

site

None Direct effects will be prevented by the

condition that prevents B, C and D

activities at or near to the surface within

the site boundary.

Changes in local

hydrological regime

Upland sites and habitats

are often only exposed to

local hydrological effects,

due to their topographical

situation.

Established and reliable avoidance,

best-practice or mitigation measures

(e.g. design and siting; control of site

drainage; monitoring of drainage paths).

Licence does not constrain or otherwise

direct subsequent activities.

Deterioration in water

quality

Upland sites and habitats

are often only exposed to

local hydrological effects,

due to their topographical

situation. Receptor would

need to be downstream

for there to be an effect.

Established and reliable avoidance,

best-practice or mitigation measures

(e.g. emissions controls; design and

siting). Licence does not constrain or

otherwise direct subsequent activities.

Particulate and

nitrogen deposition in

oligotrophic habitats

Particulates etc. from

point sources typically

travel a limited distance

only.

Established and reliable avoidance,

best-practice or mitigation measures

(e.g. emissions controls; siting controls;

transport route selection). Licence does

not constrain or otherwise direct

subsequent activities.

Findings

► 27 blocks were assessed as having no LSEs

► Remaining 132 blocks were subject to an AA

► 57 blocks recommended for licence award with no conditions

► 75 blocks recommended for licence award but with conditions to ensure no AEOI

► Conditions

► All or specific activities prohibited from taking place at or near to the surface within the European site

► Advice notes specific to the licence block highlighting sensitivities of any buffer zones around European sites

► Inherent nature of licences

► Enabled adverse effects to be avoided

► Further assessment

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Consultation

► 6 week consultation (18th August 2015 and 29th September 2015)

► 912 responses received

► Majority disagreed with aspects of the assessment

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Post Consultation

Following conclusion of consultation, analysis of responses and consideration of assessment, all 159 blocks in 93 licences awarded contingent on no adverse effects through

► relevant restrictions

► use of advice notes

► inherent nature of licence

► that further assessments will apply

► award of licence does not provide definitive clearance on HRA

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Summary

► Strategic level environmental assessments completed of licensing round

► SEA undertaken before launch of licensing round and HRA undertaken before award of licences

► Assessments provide substantial baseline, evidence and assessment information to developers, regulators, mineral planning authorities and the public

► Includes mitigation and monitoring measures

► Consultation provided substantial range of comments, although many engaged on the assumption that all licences were to be awarded for unconventional E&P and were seeking to register protest

► Assessments increased scrutiny and transparency of decision making, improved guidance and highlighted role of regulation and best practice