Policy paper

2010 to 2015 government policy: energy industry and infrastructure licensing and regulation

Updated 8 May 2015

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

© Crown copyright 2015

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This publication is available at https://www.gov.uk/government/publications/2010-to-2015-government-policy-energy-industry-and-infrastructure-licensing-and-regulation/2010-to-2015-government-policy-energy-industry-and-infrastructure-licensing-and-regulation

This is a copy of a document that stated a policy of the 2010 to 2015 Conservative and Liberal Democrat coalition government. The previous URL of this page was https://www.gov.uk/government/policies/providing-regulation-and-licensing-of-energy-industries-and-infrastructure. Current policies can be found at the GOV.UK policies list.

Issue

We need to regulate and license energy industries to:

  • make sure all environmental impacts are assessed and managed
  • make work sites and working conditions as safe as possible
  • keep the industries competitive to promote further development
  • make sure the supply chain is contributing to the economy by paying licence fees and taxes

Actions

Oil and gas production and extraction

The Department of Energy & Climate Change (DECC) is responsible for:

The department has set up the Office for Unconventional Gas and Oil to promote the safe, responsible, and environmentally sound recovery of the UK’s unconventional reserves of gas and oil, including shale gas and oil

Coal

DECC sponsors the Coal Authority, which is responsible for:

Nuclear sites

DECC is responsible for developing and implementing policy to make sure nuclear sites in the UK are safe and secure and risks in transporting nuclear materials minimised. The Office for Nuclear Regulation (ONR) regulates civil nuclear sites in line with our policies. The Environment Agency is the environmental regulator of the nuclear industry in England and Natural Resources Wales is the environmental regulator in Wales.

We are responsible for:

  • establishing nuclear policy and the regulatory framework
  • acting on advice from the UK’s environment agencies about environmental regulation for the UK nuclear industry
  • representing the UK at international forums that set standards for nuclear safety

Find out more about our responsibilities regarding civil nuclear sites.

Gas and electricity

DECC is responsible for:

Planning and consents for national energy infrastructure

Under the Planning Act 2008, the Planning Inspectorate considers all applications to develop nationally significant energy infrastructure projects in England and Wales. The inspectorate then makes recommendations to ministers at DECC, who make the final decision on the applications.

Find out more about the planning and consents process for national energy infrastructure.

Background

Regulation for nuclear security was established in the Nuclear Industries Security Regulations 2003 (as amended). The ONR carries out the regulations under the Nuclear Installations Act 1965. The ONR was formed on 1 April 2011 as an agency of the Health and Safety Executive (HSE).

The Environment Agency and Natural Resources Wales regulate the disposal of radioactive waste from nuclear sites under the Environmental Permitting (England and Wales) Regulations 2010 (EPR).

The Planning Act 2008 reformed the planning and consents process for nationally significant infrastructure projects. It provides a more efficient, transparent and accessible planning system, and establishes a clear separation between policy making and decisions on individual applications. The Act also gives developers a clearer framework with a higher degree of predictability, which helps them make investment decisions with more confidence.

On 12 July 2011 DECC published the final report of the Ofgem Review, which looked at whether or not changes to the regulatory framework for gas and electricity markets were necessary for the government to achieve its energy and climate change goals. The review decided Ofgem would continue to regulate independently of the government and it set clear strategic goals in a new statutory strategy and policy statement.

Who we consulted

The Energy Act 2011 set out the powers the Secretary of State for Energy and Climate Change has to modify gas and electricity licences for the purpose of introducing a cost recovery mechanism. A consultation seeking comments on our proposed modifications to gas and electricity licences closed on 15 March 2013.

Who we’re working with

  • The Planning Inspectorate operates the planning process for nationally significant infrastructure projects
  • Office of the Gas and Electricity Markets (Ofgem) regulates the electricity and gas markets in England, Scotland and Wales
  • Health and Safety Executive (HSE) regulates work-related health and safety across UK nuclear industry
  • HSE (through the ONR) advises DECC on nuclear safety issues and is responsible for licensing and day-to-day regulation of nuclear sites
  • The Environment Agency is the environmental regulator of the nuclear industry in England and Natural Resources Wales is the environmental regulator in Wales.
  • The Environment Agency is also the environmental regulator for all onshore oil and gas operations, including shale gas, coal bed methane, underground coal gasification in England.

Appendix 1: providing oil and gas exploration and production data

This was a supporting detail page of the main policy document.

The Department of Energy & Climate Change (DECC) is responsible for:

  • publishing licensees’ exploration and production (E&P) data
  • making sure licensees fulfil their obligations regarding data

We require oil and gas licensees to retain their E&P data in an accurate form (useable, accessible and reproducible) in perpetuity, even after it has been published. The storage and maintenance of data is at the licensee’s expense.

We can request any licence data at any time in any format, but in practice we will only do so when we need it:

  • to perform our business functions
  • for publication (‘release’)

Release occurs after varying periods of confidentiality expire, depending on particular licence conditions. For many datasets, release is handled on our behalf by agents appointed for this purpose (‘data release agents’ or DRAs). Licensees generally directly release proprietary seismic data.

Access to E&P data

E&P data is retained in a series of data stores referred to as the UK Distributed Data Repository (UKDDR). The UKDDR preserves the data and makes sharing, access and publication of it easier.

The UKDDR comprises:

Further information

The detailed rules governing the collection, retention and publication of E&P licence data are set out in Petroleum Operations Notice (PON) 9 for offshore and PON 9b for onshore.

You can access the oil and gas data we issue in our detailed guides:

Appendix 2: gas market regulation and licensing

This was a supporting detail page of the main policy document.

Legislation and regulation

The gas market is governed by a range of laws that are designed to make sure the market provides safe and secure gas supplies for consumers.

The Gas Act 1986 is the main piece of onshore gas market legislation. It includes the licensing regime for gas transporters, shippers and suppliers, as well as the framework for the exemption regime. It requires that efficient systems are developed for the operation of gas transmission and distribution networks, and that reasonable requests for connection to the network are met within set times. The Act also sets out the rules for third party access.

The Petroleum Act 1998 provides a licensing regime for onshore and offshore gas-producing development. It also provides a consent regime for offshore pipelines.

The Planning Act 2008 was introduced to create a more efficient planning system for nationally significant infrastructure, including gas supply infrastructure, in England and Wales (excluding gas transporter pipelines in Wales).

The Energy Act 2008 establishes a clear regulatory framework for offshore gas storage developments and gas unloading platforms. It also extends our ability to grant leases for offshore gas storage and unloading to a maximum of 188 nautical miles within the UK’s Continental Shelf (known as the gas importation and storage zone).

Offshore gas storage in naturally occurring hydrocarbon reservoirs requires both a Petroleum Act 1998 and an Energy Act 2008 licence. Offshore gas storage in non-hydrocarbon features (such as a salt dome) requires only an Energy Act 2008 licence.

Regulation reviews

We keep gas market regulation under review to make sure it continues to provide safe and secure gas supplies for consumers. The Energy Act 2011 contains a number of measures to improve security of supply and to strengthen the third party access regime for upstream oil and gas infrastructure.

In August 2013 we published the outcome of our latest assessment which looked at three potential interventions to improve our gas security. Our analysis shows that, although such interventions could enhance our gas security, under most scenarios they would not do so cost-effectively. In addition, all options risk unintended consequences through distorting a well-functioning GB gas market or crowding out investment in alternative gas supply sources. These effects could undermine any additional security of supply intervention might bring. Therefore, the review concluded that there is no clear case for a further intervention in the gas market.

Safety regulations

Many pieces of legislation relate to safety. These are overseen by the Health and Safety Executive (HSE) and include:

Find out more about gas health and safety law and enforcement.

European legislation

European legislation considerably influences the UK gas market. For example, we are implementing the Third Energy Package (measures to promote liberalisation across Europe’s energy markets) into UK law. The package will give consumers greater choice, fairer prices, cleaner energy and better security of supply.

Gas quality

The government response to the Future arrangements for Great Britain’s gas quality specifications consultation confirmed there are no planned changes to the UK’s regulated gas specification.

Find out more about about the European Commission’s project to harmonise the gas quality in the European Union.

Gas infrastructure

The Department of Energy & Climate Change (DECC) works with other government departments to regulate onshore and offshore gas supply facilities.

Together, the Planning and Energy Acts aim to encourage investment in gas supply infrastructure by reducing the uncertainty surrounding development consent applications.

The 2009 Energy markets outlook gives detailed information on energy issues and projections covering all energy market sectors.

DECC continues to work with industry to identify and remove any barriers to further investment in gas infrastructure.

Offshore developments

The Energy Act 2008 establishes a consents system for offshore facilities. The first gas storage licence under the Energy Act was issued for a major proposed gas storage project in February 2010.

Onshore developments

The Planning Act 2008 is designed to make the planning process easier for all nationally significant infrastructure projects, including gas supply infrastructure in England and Wales.

The Act introduces a faster, more transparent consents process that facilitates investment in onshore projects

In July 2011, the Secretary of State designated National Policy Statements (NPS) that set out the need for new energy projects, including gas infrastructure.

Developers submit applications for consent of gas infrastructure in England and Wales to the National Infrastructure Directorate of the Planning Inspectorate, which examines them within a statutory timetable and produces a report.

The Secretary of State for Energy & Climate Change will determine consent in the light of the Planning Inspectorate report.

Find out about proposed major infrastructure projects within England and Wales on the National Infrastructure Planning portal.

Appendix 3: treating mine water

This was a supporting detail page of the main policy document.

The mine water treatment schemes operated by the Coal Authority prevent over 4,000 tonnes per year of iron solids discharging into watercourses. The result is an improvement in water quality which helps protect the nation’s rivers and streams, and allows aquatic life to flourish in the previously affected watercourses. Most importantly, some schemes serve to protect important sources of drinking water.

Whilst the number of mine water schemes has increased, the Coal Authority continues to improve efficiency to limit the costs associated with running these schemes.

Existing mine water treatment scheme locations

The Coal Authority operates 68+ mine water treatment schemes (as at Aug 14).

List of Mine Water Treatment Sites Operated

Legislation and the role of the Coal Authority

The European Water Framework Directive, which came into force in 2000 and was transposed into national legislation in 2003, is ‘all encompassing’ in nature. It requires that all bodies of water in the EU shall be of ‘good ecological quality’ within the timescales laid down.

Waters impacted by mine water do not always meet this requirement and therefore the objective is to seek to treat those discharges which lead to non-compliance. A further requirement of the Directive is ‘no degradation of watercourses from their current position’. This puts added emphasis on the Coal Authority’s work to prevent any new discharges from occurring.

The success of the Coal Authority’s coal mine water treatment programme has resulted in an extension of their powers, under the Energy Act 2011, to deal with pollution from metal mines. In 2011, Defra started to fund the Coal Authority, making use of their expertise and innovation, to tackle water pollution from non coal mining.

Code of practice for mine water treatment schemes

The Coal Authority and the Planning Officers Society have designed a “Code of Practice for Mine Water Treatment Schemes”. This provides practitioners with a short reference guide for the planning considerations for such schemes.

Coal Authority Mine Water Treatment Schemes Code of Practice

Understanding mine water treatment

Further information about how the Coal Authority treats mine water is available in the following attachment.

Understanding mine water treatment

Appendix 4: safety at UK civil nuclear sites

This was a supporting detail page of the main policy document.

It is crucial that safety at the UK’s nuclear facilities is properly regulated and supported by effective legislation.

The Secretary of State for Energy and Climate Change is accountable to Parliament for nuclear safety at nuclear power stations and other licensed civil nuclear sites in the UK.

The Health and Safety Executive (HSE) has statutory responsibility for making sure there is adequate health and safety regulation across most industry sectors, including the UK nuclear industry.

HSE’s Office for Nuclear Regulation (ONR) is responsible for regulating safety at nuclear sites in the UK. The ONR’s licence conditions cover all arrangements for managing safety, including emergency planning arrangements and responding to accidents, leaks and spillages of radioactive materials at individual civil nuclear sites.

The UK environment agencies regulate the disposal of radioactive waste from nuclear sites under the Environmental Permitting (England and Wales) Regulations 2010 (EPR ). For more information visit our policy pages on Managing the use and disposal of radioactive and nuclear substances and waste.

Legislation

The nuclear industry is subject to the Health and Safety at Work Act 1974 (and secondary legislation, including the Nuclear Installations Act 1965). These place general duties on employers and others in charge of premises to ensure, as far as is reasonably practicable:

  • the health, safety and welfare of their employees
  • that their activities do not expose other people to health and safety risks

The Ionising Radiations Regulations 1999, which apply to licensed and other sites using ionising radiation, require employers to keep worker and public exposure to radiation as low as reasonably practicable. They also require employers to comply with maximum exposure limits. The statutory maximum level for a worker is now 20 millisieverts (mSv) per annum. For all others, including members of the public, it is 1mSv per annum. However, the doses most workers and the public actually receive are much lower than the statutory maximum.

Nuclear accidents and incidents

There are well-developed and tested arrangements in place for responding to any nuclear emergency at a UK civil nuclear site. These are part of the licensing requirements that the ONR imposes on operators.

In the event of a nuclear accident in the UK, the Department of Energy & Climate Change (DECC) is responsible for notifying other countries that might be affected.

Nuclear operators also voluntarily report on incidents at civil nuclear installations in England, Scotland and Wales that have possible implications for the safety of the site but do not require emergency plans to be invoked. Information on these incidents is published on the ONR website.

Find out more about emergency planning and response at nuclear civil sites.

Access DECC’s Radioactive Incident Monitoring Statistics.

International nuclear safety

The Secretary of State for Energy and Climate Change is responsible for any UK involvement:

  • with international governmental bodies operating in the nuclear area
  • in international initiatives to help Eastern European and former Soviet Union countries improve their nuclear safety (ONR supports and manages many of these initiatives)

UK progress report on the implementation of the IAEA Action Plan on Nuclear Safety

In June 2011 a Ministerial Conference on Nuclear Safety was convened to direct, under the auspices of the IAEA, the process of learning and acting upon lessons learned following the accident at TEPCO’s Fukushima Daiichi Nuclear Power Plant in March 2011. Following the Conference the IAEA produced an Action Plan for enhancing the framework that was adopted by IAEA member states. The purpose of the Action Plan is to define a programme of work to strengthen the global nuclear safety framework and it included measures to enhance the nuclear safety, emergency preparedness and radiation protection arrangements. The Plan contains 12 key areas each of which have a range of specific action points for delivery by the IAEA or member states or Operators (and in some instances there are joint actions).

While not obliged to do so the UK have produced and submitted to the IAEA a progress report on the delivery of our contribution to the IAEA Action Plan. Many of the actions proposed by the IAEA Action Plan are either current UK practice or we already had programmes in place to enhance our approach. This is largely due to the findings of the UK’s Chief Inspector of Nuclear Installation’s report on the impact of Fukushima on the UK nuclear sector. This report by the UK therefore focusses on the actions being taken that add to our already well-established and robust nuclear safety regime.

UK progress report on the implementation of the IAEA Action Plan on Nuclear Safety

Convention on Nuclear Safety

The Convention on Nuclear Safety (CNS) came into force in 1996 to raise standards of civil nuclear safety internationally. Every 3 years each of the convention’s contracting parties (53 countries and the European Commission) must submit a compliance report explaining how they’re fulfilling the articles of the convention. The report is then peer reviewed.

The ONR oversees the UK’s involvement in the convention and produces the compliance report. DECC is then responsible for submitting the report to the convention. The most recent report was submitted in January 2014.

Japanese earthquake and tsunami: implications for the UK nuclear industry

Following the accident at the Fukushima nuclear power plant in Japan, the Secretary of State for Energy and Climate Change asked UK Chief Nuclear Inspector Dr Mike Weightman to produce a report on the implications of the events in Japan and the lessons to be learned for the UK nuclear industry.

Read more about Fukushima and the UK nuclear industry, including Dr Weightman’s report Japanese earthquake and tsunami: Implications for the UK nuclear industry, on the ONR website.

Appendix 5: planning and consents for national energy infrastructure

This was a supporting detail page of the main policy document.

In England and Wales, when an application is made for development consent for a nationally significant energy infrastructure project, the following process applies:

  1. The Planning Inspectorate receives and considers the application under the Planning Act 2008.
  2. The Planning Inspectorate makes recommendations to ministers at the Department of Energy & Climate Change (DECC).
  3. DECC ministers make the final determination.

Nationally significant energy infrastructure projects are defined as:

  • power stations (including onshore and offshore wind farms) with a generating capacity of more than 50 megawatts (MW) onshore and 100MW offshore
  • large gas reception and liquefied natural gas facilities and underground gas storage (meeting the threshold set out in the Planning Act 2008)
  • above-ground electricity power lines at or above 132 kilovolts (kV)
  • cross-country gas and oil pipelines and gas transporter pipelines (meeting the conditions and thresholds set out in the Planning Act 2008)

Read more about national infrastructure consents.

National Policy Statements for Energy Infrastructure

The energy National Policy Statements (NPS) set out national policy against which proposals for major energy projects will be considered and determined. Read more about the NPS for energy infrastructure.

The Planning Inspectorate portal has further information on national infrastructure planning.

Electricity Act 1989

DECC continues to administer the determination process for consent applications for power stations (including onshore and offshore renewables) and overhead power lines made under Section 36 (S36) and Section 37 (S37) of the Electricity Act 1989 prior to the Planning Act system coming into force.

Find further information on S36/37 public inquiries.

Overhead power lines below 132kV

DECC also:

  • considers applications made by developers under S37 of the Electricity Act 1989 for overhead power lines below 132kV
  • manages statutory processes for necessary (compulsory) wayleaves, tree lopping orders and compulsory purchase orders

Read about codes of practice on optimum phasing for high voltage power lines.

Gas pipelines and generating stations

DECC is responsible for:

  • gas pipelines below the Planning Act 2008 threshold in England and Wales
  • applications submitted under the Transport and Works Act 1992 for generating stations in England

Offshore energy installations

DECC is also responsible for:

  • considering requests for safety zones around certain offshore renewable energy installations (with the exception of projects with a generating capacity of 100MW or less in English and Welsh waters, which are dealt with by the Marine Management Organisation)
  • administering the statutory scheme for decommissioning offshore renewable energy installations that was introduced by sections 105 to 114 of the Energy Act 2004

Read our guidance note for industry on the decommissioning of offshore renewable energy installations under the Energy Act 2004. We have also published an addendum to the guidance on tidal lagoon projects connected to land.

Read our guidance for industry on applying for safety zones.

Launch of consultation by European Commission on potential projects of common interest (PCI) in electricity and gas infrastructure.

On 22 December 2014 the European Commission launched a Union-wide consultation on potential projects of common interest (PCI) in electricity and gas infrastructure with a deadline of 13 March 2015.

The consultation period has now been extended to 31 March 2015.

All interested parties are invited to express their opinion whether a project is needed from an EU energy policy perspective bringing together security of supply, market integration, competition and sustainability.

The consultation is available on the Your Voice in Europe website and is an important step for preparing the second list of projects of common interest to be published by the European Commission in October 2015.

Responses should be sent to the Commission however if you would like to contact an official in DECC about this consultation please email nigel.barraclough@decc.gsi.gov.uk.

Further information

Visit the Energy Infrastructure Portal for more information about planning and consents for national energy infrastructure.

Contact

Email deccnic@decc.gsi.gov.uk for further information.

Appendix 6: oil and gas licensing

This was a supporting detail page of the main policy document.

On 1st April 2015 certain functions passed from the Department of Energy and Climate Change (DECC) to the Oil and Gas Authority (OGA) a newly created Executive Agency of DECC

The Oil and Gas Authority administers the UK’s licensing system for onshore and offshore exploitation of the nation’s oil and gas reserves. We host the UK Oil Portal to provide the necessary information to licensees and other stakeholders.

Production licences

When the OGA issues a production licence to a company (or group of companies), it is giving that licensee exclusive rights to explore for, drill for, and produce native oil and gas within a specified area. Licensees must be assured of this exclusive right before they make the necessary investments to develop oil and gas fields. Exclusivity also prevents competing wells trying to exploit the same resource.

Legislation and regulation

The OGA acts under powers Parliament gives to the Secretary of State for Energy and Climate Change in the Petroleum Act 1998 to licence oil and gas exploration. Production licences include terms and conditions under which the OGA regulates specific activities like:

  • drilling
  • field development and production
  • licence transfers and operatorship
  • storage and confidentiality of data

The Department of Energy and Climate Change (DECC) administers offshore environmental regulation and the decommissioning of offshore oil and gas installations and pipelines.

There are many petroleum-related activities that DECC and the OGA doesn’t regulate. Storage of petroleum spirit may be a matter for local authorities and/or the Health and Safety Executive (HSE). Questions about oil imports should be addressed to either or both of 2 trade associations:

UK Petroleum Industry Association
Quality House, Quality Court
Chancery Lane
London WC2A 1HP

Telephone: 020 7269 7600

Email: info@UKPIA.com

or

Downstream Fuels Association

Licensing rounds

The OGA operates a competitive system of licence awards. Most licences are issued in licensing rounds, where applicants compete for exclusive licences over particular geographical areas. To maximise economic exploitation of the UK’s oil and gas resource, the OGA chooses licence round winners on a range of technical and other criteria rather than through an auction (as happens in some other countries).

Unconventional oil and gas (including shale gas)

The OGA works closely with its regulatory partners to make sure any exploration and development activity associated with the development of new energy resources (such as shale gas) is undertaken within the structure of the licensing system.

Natural gas produced from shale is often referred to as ‘unconventional’ because it refers to the type of rock in which it is found. The technique used to access the resource is also different to conventional gas because it involves a process called hydraulic fracturing or ‘fracking’. This is where water is pumped at high pressure to create narrow fractures in the shales, which allows the gas to flow into the well bore.

Exploration for shale gas is still at an early stage with a only a modest level of exploration activity.

Payments to the OGA

The document below sets out the possible ways of making payments to the OGA for licensing (or other) purposes. Queries to Darrell Sime

Further information

You can read more about:

Visit the UK Oil Portal – a login is required.

Appendix 7: developing shale gas and oil in the UK

This was a supporting detail page of the main policy document.

Overview

The government believes that shale gas has the potential to provide the UK with greater energy security, growth and jobs. We are encouraging safe and environmentally sound exploration to determine this potential.

Fracking, or hydraulic fracturing, is a technique used in the extraction of gas from shale rock and has been extensively used over the last 60 years – it is estimated that more than 2.5 million wells have been fracked worldwide.

The UK has a strong regulatory regime for exploratory activities but we want to continuously improve it. The UK has over 50 years of experience of regulating the onshore oil and gas industry nationally.

Facts about fracking

More information is available in our “Facts about fracking” series of booklets covering:

  • Water – including how water is managed and we minimise the risk of water sources being contaminated

  • Understanding earthquake risk – including the traffic light system for monitoring seismicity

  • Regulation and monitoring

  • Climate change

  • Local air quality – including what flaring is allowed and how emissions are monitored

  • Planning permission and communities – including local issues (visual impact, traffic movements, natural environment etc) are taken into account

  • Safety from design to decommissioning – particularly on how wells are designed and inspected

What is fracking, shale gas and oil?

Hydraulic fracturing, known as fracking, is a technique used in the extraction of gas and oil from ‘shale’ rock formations by injecting water at high pressure. Shale gas is the same natural gas as is obtained from conventional gas fields, such as the North Sea.

What is the potential?

Scientists from the British Geological Survey (BGS) have estimated that the total volume of gas in the Bowland-Hodder shale in northern England is some 1300 trillion cubic feet (central estimate).

More information on what these estimates mean is available in our definition note on resources and reserves.

Definitions note: resources vs reserves

The British Geological Society’s Bowland Shale Gas study is the first in the UK to provide investors, operators and regulators with an indication of where to target future exploratory drilling. But it is not possible to estimate how much shale gas and oil the UK can produce until there has been some exploration and testing.

Evidence on safety and the environment

The Government takes the safety of the public and protection of the environment very seriously. The Government believes that the regulation is robust for exploration, but wants to continue to improve it. In 2012, the Royal Society reviewed the scientific and engineering evidence on shale gas extraction conducted by the Royal Academy of Engineering and the Royal Society.

This concluded that “the health, safety and environmental risks associated with hydraulic fracturing (often termed ‘fracking’) as a means to extract shale gas can be managed effectively in the UK as long as operational best practices are implemented and enforced through regulation.”

Royal Society review of hydraulic fracturing

In September 2013 Professor David MacKay (then DECC’s Chief Scientist) and Dr Timothy Stone wrote a report on potential greenhouse gas emissions from UK produced shale gas. They concluded that the overall effect of UK shale gas production on national emissions is likely, with the right safeguards, to be relatively small. Indeed emissions from the production and transport of UK shale gas would likely be lower than from the imported Liquefied Natural Gas that it could replace.

Public Health England assessed the risk to human health of extracting shale gas in an October 2013 report. They evaluated available evidence on issues including air quality, radon gas, naturally occurring radioactive materials, water contamination and waste water. They concluded that “the risks to public health from exposure to emissions from shale gas extraction are low if operations are properly run and regulated.”

What is fracking? More information is available in our “Facts about fracking” booklets.

Effective regulation

On 1st April 2015 certain functions passed from the Department of Energy and Climate Change (DECC) to the Oil and Gas Authority (OGA) a newly created Executive Agency of DECC

The OGA works closely with regulatory partners to make sure any exploration and development activity associated with the development of new energy resources is safe and sustainable, but we continue to improve it.

The process of obtaining consent to drill a well is the same whether the well targets conventional or unconventional gas. Operators bid for exclusive rights to an area in competitive license rounds. The operator then needs the landowner’s and planning permission, which may require an environmental impact assessment.

They also need environmental permits (from either the Environment Agency, Natural Resources Wales, or the Scottish Environment Protection Agency). The Environment Agency ensures that any shale gas operations are conducted in a way that protects people and the environment. The Environment Agency’s environmental permitting regulations cover:

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

The Environment Agency is also a statutory consultee in the planning process and provides local mineral planning authorities (normally the county or unitary local authority) with advice on the potential risks to the environment from individual gas exploration and extraction sites.

The operator must notify the Health and Safety Executive of the well design and operation plans at least 21 days before drilling is due to start. The Health and Safety Executive inspects the well design to ensure that measures are in place to control major hazards to people from well-related activities and accidents. They then seek final consent from the.

The OGA’s Regulatory Roadmap publication provides detailed information on the process operators must follow when seeking to drill for any form of onshore oil and gas in the UK.

Community and public engagement

The shale gas and oil industry has set out their commitment to community engagement in its Charter. This Charter sets out what communities can expect from companies developing shale in their areas. Operators will engage communities in advance of any application for planning permission and then again at each stage of development.

The industry has committed to a package for communities that host shale development. This includes:

  • At exploration stage, £100,000 in community benefits per well-site where fracking takes place

  • 1% of revenues at production will be paid out to communities.

  • Operators will publish evidence each year of how they have met these commitments.

This Charter and offer to communities will be regularly reviewed as the industry develops and operators consult with communities. For more information on the Community Engagement charter please visit the website of the UK Onshore Operators Group, the trade body for companies developing shale gas and oil.

For more information on the Community Engagement charter please visit the website of the UK Onshore Operators Group, the trade body for companies developing shale gas and oil.

UKOOG community engagement charter

Exploration in your area

Oil and gas sites have long been part of the landscape in many parts of Great Britain. Around 2,100 conventional wells have been drilled in the UK. The industry expects 20-40 new sites to be started in the next couple of years.

There are 176 Petroleum Exploration Development Licences (PEDL) for onshore oil and gas in the UK. We plan to conduct a new round of onshore licensing (the 14th) in 2014 and we are conducting the necessary Strategic Environmental Assessment.

Licences themselves do not give consent for drilling or any other operations (see effective regulation above). Questions about future activity should be addressed to the operator. The industry has committed to early engagement with local communities to identify and address local issues and concerns proactively among other things.

The OGA publishes a map of the currently licenced area. Another useful site is the UK Onshore Geophysical Library.

What is the government doing to develop shale?

The government established the Office of Unconventional Gas and Oil (OUGO) in December 2012 to develop the shale gas industry in the UK. The office is working closely with regulators and the industry to ensure that the regulatory regime is as clear and simple as possible while safeguarding public safety and protecting the environment.

We have made important early steps, for example:

  • The Department for Communities and Local Government (DCLG) has published planning guidance that clarifies the interaction of the planning process with the environmental and safety consenting regimes

  • In the Autumn Statement, the Chancellor announced support to encourage investment in onshore oil and gas, including shale gas, by halving the tax rate on early profits

  • The Environment Agency (EA) has announced actions to streamline and simplify the regulation of exploratory activity while maintaining environmental protection

  • Government has welcomed a package of community benefits that was brought forward by industry

  • Government has included provisions in the Infrastructure Bill to simplify procedures by which the onshore oil and gas and deep geothermal industries obtain underground drilling access 300 metres or more below the surface. For more information see our information sheet:

Underground access: factsheet

Appendix 8: environmental regulation of offshore oil and gas exploration and production, offshore gas unloading and storage and offshore carbon dioxide storage activities

This was a supporting detail page of the main policy document.

The Department of Energy & Climate Change (DECC) regulates the environmental aspects of offshore oil and gas exploration and production, offshore gas unloading and storage and offshore carbon dioxide storage activities, from exploration through production and/or storage to decommissioning.

The Offshore Environment Unit (OEU) is responsible for developing the environmental regulatory framework for offshore oil and gas exploration and production, offshore gas unloading and storage and offshore carbon dioxide storage on the UK Continental Shelf (UKCS), and for administering and ensuring compliance with the regulatory regime.

We do this by:

  • liaising with international bodies (such as the EU and OSPAR), other government departments and the devolved administrations, and stakeholders on the development of policy and regulation
  • implementing domestic legislation, international agreements and agreed codes of practice to make sure offshore oil and gas exploration and production, offshore gas unloading and storage and offshore carbon dioxide storage activities do not have a significant adverse impact on the environment or other users of the sea
  • maintaining an appropriate and up-to-date understanding of the impact of offshore oil and gas exploration and production, offshore gas unloading and storage and offshore carbon dioxide storage activities, and making sure this is reflected in the impact assessment process and environmental monitoring programmes
  • inspecting offshore installations to ensure regulatory compliance
  • providing a response to offshore environmental incidents
  • investigating and enforcing where there is evidence of regulatory non-compliance

The OEU consists of three teams, the Environmental Policy Team, the Environmental Management Team, and the Offshore Environmental Inspectorate Team.

Environmental Policy Team

The Environmental Policy Team is primarily responsible for developing and influencing domestic and international policy such that the exploitation of UK oil and gas resources is conducted with the objective of minimising environmental impact. In doing so, we identify and establish new policy objectives relating to OEU’s interests, manage OEU’s programme of Strategic Environmental Assessments (SEA), and negotiate on behalf of UK / DECC at international fora and inter-departmental environmental policy-related meetings. We also assist other parts of DECC on SEA and environmental policy issues.

For further information please contact the Environmental Policy Team by e-mail at oep@decc.gsi.gov.uk or (01224) 254015

Environmental Management Team

The Environmental Management Team (EMT) is primarily responsible for the assessment and approval of offshore oil and gas exploration and production, offshore gas unloading and storage and offshore carbon dioxide storage activities at the planning stage, prior to commencement of the offshore activities.

For further information please contact the EMT by e-mail at emt@decc.gsi.gov.uk or (01224) 254145 / 254102 / 254050 or please contact your assigned environmental manager.

Offshore Environmental Inspectorate Team

The Offshore Environmental Inspectorate Team (OEIT) is primarily responsible for regulating activities once offshore operations commence by investigating whether the requirements, restrictions or prohibitions imposed by the legislation have been, or are being complied with.

For further information please contact the OEIT by e-mail at offshore.inspectorate@decc.gsi.gov.uk or 01224 254138 or please contact your assigned offshore environmental inspector.

The EMT and the OEIT consist of a group of administrators and technical specialists – environmental managers and offshore environmental inspectors. The environmental managers and offshore environmental inspectors are allocated a portfolio of specific operators/companies and are responsible for dealing with the environmental aspects of those companies’ activities

Offshore Environmental Inspectorate

You can find out more about our role in environmental regulation of offshore oil and gas exploration and production, offshore gas unloading and storage and offshore carbon dioxide storage activities in our detailed guides:

EU Directive on the safety of offshore oil and gas operations

Following the Deepwater Horizon incident in the Gulf of Mexico in April 2010 and the European Commission’s (EC) communication “Facing the challenge of the safety of offshore oil and gas activities” (published on 13th October 2010); the EU Directive on the Safety of Offshore Oil and Gas Operations was published on the 28th June 2013 (Directive 2013/30/EU).

The objective of the Directive is to reduce as far as possible the occurrence of major accidents related to offshore oil and gas operations and to limit their consequences. DECC and HSE are jointly leading on the transposition of the Directive as it contains requirements relating to licensing, environmental protection, emergency response and liability, in addition to safety. The Directive has to be implemented by 19th July 2015.

In July 2014, the government consulted on its proposals for the transposition of the Directive. The consultation closed on 24th September 2014 and the government response has now been published. More detail regarding the transposition, including the consultation summary, is available on the HSE’s website – DECC & HSE transposition of the offshore safety directive

Offshore Safety Directive Regulator (OSDR)

As part of the transposition, DECC and HSE, working in partnership, have formed the Offshore Safety Directive Regulator (OSDR), to implement the requirements of the Directive on the safety of offshore oil and gas operations.

More detail regarding is available on the HSE’s website – Offshore Safety Directive Regulator

International Offshore Petroleum Environmental Regulators (IOPER)

DECC is a member of the International Offshore Petroleum Environment Regulators (IOPER) group. IOPER is a collaborative group of national regulators dedicated to raising environmental performance standards within the offshore petroleum exploration and production industry. Details of the IOPER members, annual meetings and events are available from the IOPER website.

Further information

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