Agenda item

This is an application for the retention and extension of an existing well site, HH1 and HH2 wells, and vehicular access to allow: the drilling of four new hydrocarbon wells and one water reinjection well; the construction of a process and storage area and tanker loading facility; new boundary fencing; well maintenance workovers and sidetrack drilling; and ancillary development enabling the production of hydrocarbons from six wells, for a period of 25 years.

 

 An update sheet was tabled at the meeting and is attached as Annex 1 to the minutes.

Officers:

Caroline Smith, Interim Planning Group Manager

Stephen Jenkins, Interim Planning Development Manager

Duncan Evans, Senior Planning Officer

Nancy El-Shatoury, Principal Lawyer

Helen Forbes, Lawyer

 

Speakers:

Mr James Knapp, made representations in objection to the application. The following key points were made:

• Earthquakes are not addressed by the officer’s report.
• Suggested HH-1 Borehole drilled through a fault
• Organisations that are responsible for monitoring earthquakes are not taking this matter seriously. Elected representatives therefore need to take this matter seriously.
• Edinburgh University believe if drilling continues earthquakes will continue.
• Earthquakes were triggered by surface activity which is a responsibility of the council.

 

Mr Julian Everett spoke on behalf of Vicki Elcoate and made representations in objection to the application. The following key points were made:

• Surrey County Council have declared a climate emergency but are considering an application for extracting fossil fuels for 25 years.
• This application is not the change residents want for a sustainable county. The Stephenson High Court judgement on the impact of climate change threw out ‘the presumption in favour of oil and gas’.
• The cumulative impact from greenhouse gases is massive and is underrepresented by the applicant.
• Efforts in Surrey for positive initiatives are utterly pointless if this application goes ahead.

 

Ms Lynette von Kaufmann, made representations in objection to the application. The following key points were made:

·        Newdigate resident- there have been around 172 tremors recorded since 1 April 2018.

·        Residents have felt 13 of the earthquakes, an earthquake with a magnitude of 3.2 was felt by 1600 people.

·        Damage to property has been recorded, mostly crack to walls and brickworks- worried house prices will fall and insurance premiums will go up.

·        If oil well activity continues imagine what will happen with earthquakes when more are approved. The decision should be deferred until conditions around things such as having a full 3D seismic survey, traffic light system and ongoing seismic monitoring are put in place.

Ms Pat Smith, made representations in objection to the application. The following key points were made:

·        Have lived in Dorking for over 48 years and have concerns around the conditions.

·        Involved in monitoring oil operations at Brockham alongside the council. Concerns around the reliability of the operator and want detailed and precise conditions.

·        There should be a pre-commencement condition around the monitoring of methane gases throughout the project and the water reinjection element of the application should be removed.  

·        There should be a break clause every five years with the application and there should be a condition on community engagement. 

 

Mr Chris Lowe, made representations in objection to the application. The following key points were made:

·        Lives within 800 yards from the site- Stephenson case declares key provision within the NPPF illegal- ask council to seek independent legal advice on this matter.

·        Council is seeking to reduce emissions but this permission would not be consistent with this policy.

·        Assume financial resilience of the applicant but what will what happen if there are issues with the site after the applicant leaves. Applicant should provide a bank bond to the authority.

·        Ask that seismic monitors stay in place throughout the duration of the application.

 

The Applicants, Mr Stephen Sanderson, Mr Matt Cartwight and Agent, Mr Nigel Moore, raised the following key points:

·        Presents a viable site in compliance with the Surrey Minerals Plan. Hydrocarbon production will make the UK more resilient for the future and make us less dependent on imports.

·        With regards to climate change, it will take time to develop the alternatives to oil and gas. The site will contribute to reducing carbon emissions as activity will be taking place on site. Gas from the site will be converted to electricity and returned to the national grid.

·        55% of residents support the proposals at Horse Hill as detailed within the officer’s report.

·        Three independent scientists have confirmed that earthquakes in the area are not related to activity on site. There have been no objections from statutory consultees.

·        A number of residents from the local area are employed by the site and engagement with the local community has accelerated over the years. Will ensure that local community benefit from the economic benefits from the site.

 

The Local Member, Kay Hammond could not attend the meeting but asked for a statement to be read out by the Chairman on her behalf:

 

“It has recently become apparent that the financial position of the applicant may be somewhat less than ideal.  I agree with the concerns raised by Salfords & Sidlow Parish Council about the finances of the parent company, UK Oil & Gas (UKOG) who now own 85% of the applicant, Horse Hill Developments Ltd (HHDL).

 

UKOG have just bought 35% of HHDL for £12m, financed by cash and ordinary shares plus a £5.5m Convertible Loan.  The terms of the Convertible Loan are to issue ordinary shares at a 10% discount to their market price at the time of conversion over the next two years.  This is “commonly known a Death Spiral Convertible” Defined in Wikipedia, as the effect it has on the share price is to constantly drive it downwards. 

 

It has been a condition of previous permissions for work at this site that the land must be reinstated and the same is included in summary report for this application. If the financial position of the applicant is as feared and oil extraction rates are less than expected, or if a negative event occurs, the applicant may find it nigh on impossible to meet the costs of any environmental reinstatement conditions. It must be remembered that the environmental impact of a negative event may extend well beyond the boundaries of the site and incur considerable extra expense to rectify.

 

Salfords & Sidlow Parish Council wrote to explain the reasons for this concern and why it is essential for a Bond to make sure funds are in place to pay any costs of meeting the conditions if permission is granted for any further operations this site.  The value of any bond should consider the time scale of this site, and be adequate for the full reinstatement of the site at any time within the next 25 years.

 

Paragraph 205e of the NPPF (National Planning Policy Framework) says ‘Bonds or other financial guarantees to underpin planning conditions should only be sought in exceptional circumstances’.  I would respectfully suggest that there is good reason to believe such exceptional circumstances may exist here.

 

When the financial position has been independently scrutinized, a fully informed decision can be made as to whether permission should be granted and if a bond is required as a condition.  Failure of the applicant to reinstate the site would leave an environmental “Black Hole’ in the green belt.

 

The County Council must make their decision on all the relevant information and, at the moment much of the financial information is not clear. I therefore would ask the Committee to defer the decision on this application until the financial position of the applicant has been clearly established.

 

A commercial organization must not be allowed to play roulette with the environment when there is a clear and considerable risk that the County, and ultimately Surrey’s tax payers will have to pick up the bill”. 

 

The Vice-Chairman of the County Council, Helyn Clack, made the following points:

 

• There should be a condition in the application that earthquakes in the area are monitored by the applicant. Residents would be supportive of this condition. 
• It is frightening for residents that seismology is not being addressed.

 

Key points raised during the discussion:

 

1. The Chairman confirmed that the committee visited the Horse Hill Well Site on 05 September 2019 (6 committee members attended and 1 substitute member attended).
2. The report was introduced by the Senior Planning Officer who updated the committee on the application.
3. A member of the committee asked for clarity around the concerns raised by residents on earthquakes. It was explained by officers that planning practice guidance states which regulators are responsible for the various elements of hydrocarbon development. The County Planning Authority grants planning permission for use of the land but the responsibility for assessing risks with earthquakes sits with the Oil and Gas Authority (OGA).
4. The Interim Planning Development Manager explained that a workshop had been set up by the OGA which included expert geologists from the British Geological Survey. It was concluded that there was no link between the earthquakes and the activity taking place at Horse Hill. It was explained that the OGA has the powers to stop, monitor and control seismic activity.
5. A member queried if the committee had the power to include a recommendation in the report around seismic activity. The Interim Planning Development Manager explained that because seismic activity fell outside the remit of the planning authority it would be difficult to impose a recommendation on this. It was added that the oil and gas industry was heavily regulated and that there were a number of bodies (OGA, EA, HSE) in place to monitor this development.
6. There was a discussion around securing a bond from the applicant to ensure the site is fully restored after the 25 year period and if this could be included within the application conditions. It was explained by officers that the financial capacity of the company was considered by the OGA and it would be unreasonable to ask for a bond without valid reasons.
7. It was confirmed that comments from Reigate and Banstead Borough Council had not been received and they had been chased several times for this. Comments from Mole Valley District Council had been responded to within the main body of the report.
8. During the meeting there was a lengthy discussion around the council’s recent climate emergency declaration and whether this application was in line with this new policy. The Interim Planning Development Manager stated that the application being considered by the committee had to be determined in accordance with the development plan and current government policy.
9. With regards to the Stephenson case, the county lawyers present at the meeting made the following statement, “The Court found that the consultation exercise undertaken prior to revising the National Planning Policy Framework to add paragraph 209(a) relating to shale fracking was unlawful because;

(1)  the Secretary of State was not undertaking the consultation at a formative stage;

(2)  he had no intention of changing his mind about the substance of the policy; and

(3)  he had failed to take into account scientific evidence put forward by the claimant bearing upon a key element of the evidence base for the proposed policy and its relationship to climate change effects.”

 

The paragraph had provided:

 

“Mineral Planning Authorities should recognise the benefits of on-shore oil and gas development, including unconventional hydrocarbons, for the security of energy supplies and supporting the transition to a low-carbon economy; and put in place policies to facilitate their exploration and extraction

 

Paragraph 209 a was subsequently quashed. The rest of the revised NPPF remains in place including the remainder of paragraph 209 relating to oil, gas and coal exploration and extraction. A written Ministerial Statement made to the Commons and the Lords in May 2019 confirms:

 

For the avoidance of doubt the remainder of the National Planning Policy Framework policies and, in particular, Chapter 17 on ‘Facilitating the Sustainable Use of Minerals’ remain unchanged and extant. For the purposes of the National Planning Policy Framework, hydrocarbon development (including unconventional oil and gas) are considered to be a mineral resource.

 

Specific policy on the planning considerations associated with their development is set out at paragraphs 203-205 and the remainder of 209 of the National Planning Policy Framework. In particular, paragraph 204(a) of the National Planning Policy Framework states that planning policies should “provide for the extraction of mineral resources of local and national importance” with paragraph 205 stating that “[w]hen determining planning applications, great weight should be given to the benefits of mineral extraction, including to the economy.

 

In addition, the Written Ministerial Statements of 16th September 2015 on ‘Shale Gas and Oil Policy’ and 17th May 2018 on ‘Planning and Energy Policy’ also remain unchanged and extant. The Written Ministerial Statements sit alongside the National Planning Policy Framework. Planning Practice Guidance is also unaffected by the ruling. This suite of policies and guidance remain material considerations in plan making and decision taking for hydrocarbon development and they should be afforded appropriate weighting as determined by the decision maker.”

 

10. There was another short discussion around earthquakes and the concerns of local residents. The Interim Planning Development Manager restated that there was no evidence that the Horse Hill site was contributing to these. The British Geological Survey (BGS) confirm that seismic activity in the area is naturally occurring.  
11. A member of the committee reminded members that reaching zero net carbon emissions by 2050 was a target and that it would take time to reach this target. In the meantime hydrocarbons were vital to the national fuel supply.
12. A member of the committee raised queries in respect of water environment and ecology issues. The Senior Planning Officer confirmed that no objections had been received from technical consultees on these matters subject to recommended conditions where necessary.
13. A member of the committee stated that hydrocarbons were a requirement for western society especially with the high standard of living we have. It was important the country produces its own hydrocarbons rather than relying on imports which increase carbon emissions. It was important the committee stay within their powers, if the committee go outside their remit there is a chance the applicant will appeal and costs will be incurred against the authority.
14. Officers confirmed that the conditions pertaining to the permission if granted would be reviewed automatically after 15 years by the County Planning Authority.
15. A member of the committee sought to defer the application on the grounds that further information needed to be sought from the OGA on earthquakes in the area. The Interim Planning Group Manager reminded members that the issue of earthquakes fell outside the authority’s remit and the committee needed to be confident that all other agencies in respect of the application were doing their jobs.
16. A committee member reminded colleagues that the applicant could appeal any deferral on grounds of non-determination which would mean an inspector would make decisions in respect of the application.  
17. Mr. Cooksey proposed a motion to defer the application on grounds that further information was required from the OGA on earthquakes in the area. This was seconded by Ms Rivers. There was two votes for and seven votes against. The motion was therefore lost.
18. The Chairman moved the recommendation to permit the application subject to the conditions and informatives listed on pages 74-85 of the report and the amended conditions and reasons in the update sheet including an additional informative encouraging community engagement and for the applicant to monitor seismic activity on the site. There were seven votes for and two votes against. Therefore the application was permitted.   

 

RESOLVED:

 

That planning application RE18/02667/CON is PERMITTED subject to the conditions and informatives listed on pages 74-85 of the report and the amended conditions and reasons in the update sheet including the following two informatives,

 

1. That the applicant is advised that regular community engagement in respect of this site be undertaken (recommended by the Planning and Regulatory Committee), and may include the setting up of a local liaison group, which would provide a forum for discussing operational issues between the operator, the County Council (as Planning Authority), interested parties and representatives of the local community.
2. That the Planning and Regulatory Committee has advised that the applicant liaises with the British Geological Survey to ensure that earthquake monitoring continues, by providing funding if necessary.  The operator is advised that they share this monitoring data with all the regulatory authorities involved with this site.