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.
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
Mr James Knapp, made representations in objection to the application. The following key points were made:
Mr Julian Everett spoke on behalf of Vicki Elcoate and made representations in objection to the application. The following key points were made:
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:
Key points raised during the discussion:
(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.”
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,