Exercising control

6th April 2017

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Claire Buckley

Lucie Ponting considers the UK regulatory framework in her final report on minimising risks from fracking

The multi-agency regulatory framework overseeing hydraulic fracturing or fracking is central to controlling the risks from the process, a point clearly acknowledged in a 2012 review by the Royal Society and Royal Academy of Engineering. It concluded that the risks ‘can be managed effectively in the UK, as long as operational best practices are implemented and enforced through regulation’.

Three years later, parliament’s Environmental Audit Committee, which unsuccessfully called for a moratorium on fracking for shale gas, noted that, despite assurances from some ‘that environmental risks can be safely accommodated by existing regulatory systems’, an extensive range of uncertainties remained over particular hazards, including those to health. It called for a more joined-up regulatory system, and greater consideration of the cumulative impacts of fracking and how the industry might scale up.

Public confidence

With two shale gas operators, Cuadrilla and Third Energy, gearing up to start fracking in England for the first time since activity was suspended in 2011, the regulatory regime and its power to enforce requirements are likely to come under scrutiny again. The Westminster government – which is committed to developing a full-scale, commercial, unconventional gas industry – the shale operators and the individual regulators are all publicly confident that existing rules, regulations and enforcement capabilities are sufficient to ensure best practices are implemented.

But, as the more precautionary approaches of the devolved administrations (see panel, below), illustrate, there are continuing uncertainties about the potential risks from fracking, particularly for health. And some occupational and environmental health experts, while acknowledging the regulators’ skills sets and commitment to their roles, question whether they have the resources, evidence and data to regulate the fledgling industry effectively.

‘We want independent, well-resourced regulators who are capable of both recognising the difficulties of the industry and also working on what the data gaps might be and the implications of past work,’ says Professor Andrew Watterson, head of the occupational and environmental health research group at Stirling University.

Watterson is particularly concerned that an ideological and economic push for onshore gas is overriding public health concerns at policy level and recently co-authored a review focusing on this. ‘It strikes me that a lot of the decisions are already taken – the Westminster government said, “Fracking is great; we want it”, and then various committees popped up and said, “With sufficient regulation and good industry practice, fracking is great and we want it”. Then the regulators started to cite the same reports [to justify their conclusions] and we were going around in a circle.’

PEDL power

The regulatory regime for unconventional shale gas extraction largely mirrors that of the conventional onshore oil and gas industry. The Oil and Gas Authority (OGA), an executive agency sponsored by the Department for Business, Energy & Industrial Strategy (BEIS), handles licensing (although this responsibility was recently devolved to Scotland and Wales); environment regulators (the Environment Agency (EA) and its counterpart in Scotland, Wales and Northern Ireland) issue environmental permits; and the Health and Safety Executive (HSE) (HSENI in Northern Ireland) oversees well design and integrity and wider worker health and safety. Meanwhile, the Mineral Planning Authority (MPA) – usually the county or unitary local authority – is responsible for planning permission and enforcement.

To start the process a petroleum exploration and development licence (PEDL) must be granted. This allows an operator to carry out a range of activities, including exploration and development of unconventional gas, subject to drilling and development consents and planning permission. There is no distinction in the licence between shale gas and conventional oil and gas.

Beyond the PEDL, there is a series of other steps and requirements, including:

  • planning permission;
  • access rights from landowners;
  • environmental permits, including for mining waste, from the regulator;
  • health and safety regulations (enforced by the HSE and HSENI); and
  • consent from BEIS to drill and frack.

Rigorous learning process

From the environmental perspective, the regulator issues a series of permits. These vary according to the operator’s plans, but can cover:

  • protecting water resources, including groundwater (aquifers), as well as assessing and approving the use of chemicals that form part of the hydraulic fracturing fluid;
  • treatment and disposal of mining waste produced during the borehole drilling and hydraulic fracturing process;
  • treatment and management of any naturally occurring radioactive materials (NORM); and
  • disposal of waste gases through flaring.

Most of the permitting and other requirements stem from the existing regime, but the Infrastructure Act 2015 brought in some additional ‘safeguards’ for hydraulic fracturing that do not apply to conventional wells. ‘The operator must do 12 months of baseline methane monitoring in groundwater,’ says John Barraclough, senior adviser in the EA’s onshore oil and gas programme. ‘We always had requirements for a comprehensive range of parameters to be monitored in the permits but this was a specific requirement brought in by the act to obtain an additional consent for hydraulic fracturing from BEIS.’ It also defined hydraulic fracturing (based on the volume of fluid injected) and introduced restrictions on depths and areas where fracking could take place.

Barraclough is confident that current environmental regulation is fit for purpose. ‘We’ve been regulating the conventional oil and gas sector for many years,’ he says. ‘The principles of environmental protection are the same, and the tools we use are applicable – we just need to understand the techniques. We’ve gone through a rigorous process of learning in the past three to four years.’

He also believes the regulatory framework in the UK is significantly stronger than in the US, where fracking has also proved controversial. ‘Historically there have been practices in the US that would not be allowed in the UK,’ he says. He cites the storing of hydraulic fracturing fluid (water which returns to the surface and potentially includes contaminants such as NORM) in open lagoons or ponds in the US. ‘In this country, the requirement is to store that fluid in sealed, bunded containers,’ he says. ‘We take a very different approach.’

Maintaining integrity

The focus for the HSE is mainly on well design and integrity. ‘If you’re drilling for hydrocarbons, there is an obvious explosion risk if you don’t maintain well integrity,’ says Trevor Sexty from the HSE’s energy division shale policy team. ‘And that concern centres on the health and safety of the employees on site, but also on members of the public who may be affected by it. While the HSE doesn’t have responsibility for environmental issues, maintaining well integrity ensures releases to the environment are also prevented.’

Alongside the overarching duties to protect workers and the public enshrined in the Health and Safety at Work Act, there are two specific sets of regulations governing the extraction of gas and oil through wells: the Borehole Sites and Operations Regulations 1995 (BSOR), which require notifications to be sent to the HSE about the design, construction and operation of wells; and the Offshore Installations and Wells (Design and Construction etc) Regulations 1996 (DCR), which include well integrity provisions that apply throughout the life of shale gas or oil wells.

Sexty says the HSE’s ‘goal-setting regime is flexible’ and ‘not constrained by new industry approaches’. His colleague, Tony Almond, adds: ‘We’ve got a lot of experience of regulating the onshore oil industry from when we first started in the mid-1990s.’

Wells drilled to explore for shale gas must be designed and constructed to the same standards as the conventional onshore oil and gas wells that have been in operating in the UK for more than 20 years. ‘There have been 350 onshore oil and gas wells drilled in the UK since 2000 and we have a good safety record,’ Sexty points out.

He believes it is too early to discuss the extent to which operators are so far meeting requirements and standards. ‘Only Cuadrilla at Preese Hall has hydraulically fractured a well at high pressure and high volume,’ he says. ‘So not enough has happened to make a meaningful assessment yet.’ Even so, the Preese Hall operation was suspended due to seismicity concerns in 2011.

Joined up?

Most of the reviews of fracking risks, including those from the Royal Society and the Environmental Audit Committee, have emphasised the importance of regulatory co-ordination. ‘Working with other regulators is key,’ says Sexty. ‘We’ve put a lot of effort into that and it’s so well developed now that it’s almost second nature.’

In practice, the environment agencies and HSE have a background of working closely together as the competent authority under the COMAH (Control of Major Accident Hazards) regime that regulates high-hazard industries. For shale gas, the EA and HSE have had a specific, formal working-together agreement since 2012. ‘This includes a commitment to jointly visit all shale gas sites during the current exploratory phase of shale gas development,’ says Sexty.

The HSE and EA also work closely with the other regulatory and non-regulatory bodies. Barraclough says: ‘Alongside our HSE agreement, we have an agreed process for working with the OGA in looking at hydraulic fracturing plans and a statutory role in the planning process, so we work closely with the MPAs.’ The HSE, although not a statutory consultee for planning, also works with the local planning authorities, as well as with the OGA, and both the HSE and EA work with the shale gas team at BEIS and with Public Health England.

In 2014, an industry-funded independent taskforce on shale gas concluded that the ‘existing regulatory system is currently fit for purpose’ but argued that, if the industry should develop, the government should look at creating a bespoke regulator. Although Watterson does not support the idea of a freestanding agency, he believes inter-agency communication can sometimes be difficult. ‘We have seen in the past in the agricultural sector where the HSE has tried to join up with the Department of Health and others in terms of occupational health problems in that industry, and it hasn’t worked well,’ he suggests. Sexty is also sceptical about the idea of a single regulator: ‘We don’t think that really stacks up. We’re different regulators and we have different responsibilities but that doesn’t mean we can’t work together.’

Almond goes further, arguing that the multi-regulatory approach is its strength. ‘You can look at it also being a double check, bringing in different skills,’ he says. ‘We’ve got the people who can examine the well and what is going on in the well and the EA have got their specialists. We have different perspectives but the regimes complement each other.’

Little consolation

The fact that hydraulic fracturing is not a new technology is often used to assuage public concern. It is true that low-volume fracturing has been used for decades outside unconventional extraction for various reasons, such as stimulating conventional oil and gas deposits (in the North Sea, for example) to improve yields. What is new to the UK, and what is causing all the public interest, is high-volume hydraulic fracturing – the name often given to the type associated with shale gas extraction, which refers to the amount of pressure and fluids used.

‘We are talking about new uses of an old technology,’ says Watterson. ‘So, sure fracking has gone on, but fracking shale gas with the chemicals used now is new.’ He adds that the health, safety and environmental records of other industries that have expanded rapidly in recent years, such as waste and recycling, are generally poor. The surface landscape, proximity to local communities, and geological conditions in the UK are also very different from those in the US, the source of most of the fracking data.

While accepting the current ‘borrowed’ framework is well developed, tested and established, some argue it may still contain significant gaps when applied to fracking, particularly given the uncertainties over the potential risks. In an article in 2015 in Environmental Law Review, Joanna Hawkins noted that, before the seismic tremors near Blackpool temporarily halted fracking in England in 2011, there were no controls to minimise such risks . A system is now in place to address tremors but was ‘only done in response to the materialisation of the risk (the earthquakes)’, Hawkins wrote, adding: ‘With similar uncertainty surrounding other environmental risks associated with fracking, there is concern that such a reactive approach will provide little consolation if damage to health or to the environment has already occurred.’

The Scottish government is expected to make a decision on shale gas extraction this year. If it allows fracking to go ahead, it remains to be seen how it will choose to deal with the regulatory challenges. In England, the decisions, at least for the exploratory phase, have been taken and it is now up to the government in Westminster and its regulators to back up their claims and hold the shale gas operators to the highest standards of operational best practice and health, safety and environmental protection.

A precautionary approach

The devolved administrations are taking a more precautionary approach to fracking than the government in Westminster.

In January 2015, ministers in Scotland imposed a moratorium on drilling for unconventional oil and gas so they could gather ‘detailed and robust evidence’ on the possible impacts. The information was presented in six documents published last November, including a health impact assessment by Health Protection Scotland. This concluded the available evidence was ‘inadequate’ to determine whether development of unconventional oil and gas would pose a risk to public health.

Ministers launched a public consultation on 31 January, which will run until the end of May and includes a dedicated website (talkingfracking.scot).

The Welsh government in effect imposed its own moratorium on fracking in Wales in February 2015 when natural resources minister Carl Sargeant wrote to all local authorities ordering them to inform him of any applications to frack, and stating he would stop any local planning authority approving them.

In September 2015 Northern Ireland’s environment minister, Mark Durkan, launched planning guidance (Strategic Planning Policy Statement for Northern Ireland) that included a presumption against unconventional hydrocarbon extraction. However, there is no moratorium or permanent ban.

Under the Scotland Act 2016 and Wales Act 2017, shale gas licensing is devolved to the Scottish parliament and Welsh assembly.

Regulation: who pays?

A frequently cited concern is that regulatory bodies have insufficient resources to take on a new and possibly expanding industry. Even those who accept the regulatory framework is suitable are concerned about resources. ‘I think the regulatory regime is robust,’ says Gillian Gibson, a consultant and IEMA Fellow who has been involved in health impact assessments at Cuadrilla sites. ‘But have they got the manpower and resource and is this where they should be focusing efforts?’

The Chartered Institute of Environmental Health notes that two of the key regulators – the HSE and EA – have experienced budget cuts and staff reductions in recent years. It is also concerned that cuts to local authorities, particularly in England and Wales, could undermine their ability to oversee issues such as local air quality, noise, and other public health aspects.

At the HSE, Trevor Sexty from the regulator’s energy division shale policy team is confident there are enough resources at present. ‘Over the past couple of years, we have recruited new specialists in wells and will continue to review the resource position depending on whether the industry starts to develop further,’ says Sexty. ‘The HSE has also been allocated an extra £500,000 a year to 2020 to help it meet the demands of the initial phase of unconventional gas exploration,’ he says. ‘This is being used to upskill existing specialist inspectors and increase engagement with communities near potential well sites.’

Sexty accepts, however, that it is difficult to look ahead beyond the exploratory phase. ‘The HSE is a learning organisation,’ he says. ‘We obviously can’t future-proof anything but we try to ensure we’re flexible enough to reorganise things, redeploy people or, if necessary, recruit them so we are able to do what we’re charged with doing.’ He stresses that the HSE is impartial and focused on managing major risks.

Although Professor Andrew Watterson, head of the occupational and environmental health research group at Stirling University, is confident the field and technical staff in the HSE, EA and the Scottish Environmental Protection Agency are skilled and rigorous, he remains concerned about what they can do within a framework where they are spread ‘thinner and thinner’. He identifies a mismatch between public policy statements and reality: ‘We hear statements that if fracking takes off [the regulators] will increase staff, yet they’ve been cutting staff and their budgets have been seriously chopped.’

He also highlights the recent trend to deregulation, or ‘better regulation’ as the government terms it. Combined with budget cuts and a more commercial and business-focused approach, this has led to fewer proactive inspections. ‘There are big policy issues at the top,’ Watterson says. ‘And those play into budgets and what can be done realistically on the ground.’

He adds a further note of caution over recent political events: ‘The fracking operators are all international and in the face of Brexit and a government that wants to make deals with the US, it seems questionable whether we’re really going to get tough regulation in future and we may even be required to dismantle what we’ve already got to deal with the US under [President] Trump.’


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