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Planning labyrinth threatens Yorkshire's resources boom
July 16, 2013 / 9:42 AM / 4 years ago

Planning labyrinth threatens Yorkshire's resources boom

SNEATON, England July 16 (Reuters) - In North Dakota, the home of U.S. shale gas, a would-be driller can fill out a two-page form and get the go-ahead in two days. In North Yorkshire, England, a completed application can run to 50 pages, and the process takes months.

The British Geological Survey recently estimated shale rock beneath northern England holds 1,300 trillion cubic feet (tcf) of gas - enough to meet UK needs for 50-70 years, assuming a 10-15 percent recovery rate. But early indications are that planning institutions and processes are not ready for a flood of applications.

The county of North Yorkshire has a coal mining history and is already home to conventional gas projects led by privately owned Moorland Energy and Third Energy in the Cleveland Basin. Part of that basin lies under the North York Moors National Park. It contains shale rock, the exploitation of which, through hydraulic fracturing or “fracking” and horizontal drilling, has transformed the U.S. energy industry.

Sirius Minerals, meanwhile, is planning one of the world’s largest potash mines in response to booming global demand for the crop fertilizer, also within the national park’s boundaries. It has found the going pretty tough, too.

“There’s a huge amount of paper work to deal with. Everyone’s watching; there’s pressure on both sides,” operations director Graham Clarke told Reuters at the drill site near the coastal town of Whitby, where a large red rig pierces a clear summer sky.

Five minutes drive away, giant posters about the mine and artist impressions of what it might look like line the walls of Sneaton village hall at a walk-in information day, where Sirius Chief Executive Chris Fraser mans the barbecue in his shirtsleeves.

Sirius boasts that of its 18,000 shareholders, 4,500 are from Yorkshire. The promise of much-needed jobs are a big selling point for both the potash and the gas projects. The unemployment rate in Yorkshire is 9.4 percent, nearly two points above the national average.

For conventional gas explorers in the area the shale rock could be a welcome boost.

“In a way this (shale) is a godsend,” said Glynn Williams, partner at private equity group Epi-V, an investor in gas driller Moorland Energy. The difficulties are negotiating the planning system and raising capital as a small independent, he said.

A planning application from Moorland Energy for a gas processing plant needed to feed local production into the main grid showed 45 different consultees, including Natural England, North Yorkshire County Council, and the Highway Authority.

The firm appealed after the council failed to give a verdict after 14 months, well over the stipulated four month timeframe. The appeal, decided by national rather than local government, was eventually successful.

“They (the council) were slightly under-staffed, and being commercially minded, time is money, so we had to hurry the process along,” Williams said.

John Dewar, co-founder of the other gas company in the area, Third Energy, agreed.

“(One) challenge facing a small land operator in the onshore business is that the planning and consent process is much more complex than for offshore fields,” he told Reuters.

Much of the success of shale oil and gas in North Dakota, which now accounts for over 10 percent of U.S. energy output and now has the lowest unemployment rate in the country, is down to the ease and speed of drilling new wells and developing infrastructure such as pipelines and processing plants.

Population density is a key part of this amenable planning process. Yorkshire, which by British standards is sparsely populated, has seven and a half times more people than North Dakota, but in a space 20 times smaller.

The North Yorkshire County Council said delays such as that experienced by Moorland Energy were not unusual in complex cases, and “in no way reflects any suggestion of tardiness”.

The council added it was “well placed to deal with any potentially large number of planning applications in relation to exploiting shale gas in the area”.


At Helmsley, on the southern edge of the North York Moors National Park, the park’s planning director Chris France’s desk is stacked with the Sirius case files that have occupied three members of his staff for the past year.

“We’re a National Park under pressure,” said France, who says the cost of the Sirius application to the park is 370,000 pounds, compared with 62,000 pound cost for placing it. He says applications for the giant potash mine have stretched his office to the limits.

Sirius Minerals says the mine could create 1,000 jobs in the area and pay 300 million pounds tax a year when in full production. The National Parks’ decision is due on July 29.

France remains more concerned about the toll these developments could take on the park itself.

“Our worry is there’ll be a cumulative effect which will gradually erode the whole point of a National Park - wild open spaces which are special and need to be preserved.”

He expects shale gas applications will be next.

“We would treat fracking in the same way as any mineral extraction; we start from the view of ‘No’,” he said. To overturn this, the applicant needs to persuade the National Park that the project could not be developed elsewhere and its development is in the national interest.

Late on Monday the park’s consultants published a report saying Sirius Minerals’ planning application “overstated” the need for the minehead to be built in the park’s borders, which knocked as much as 20 percent off the company’s shares on Tuesday. Sirius said this was “inconsistent” with a lack of remaining objections from groups like the Environment Agency.

In the villages along the moors, a number of residents are supportive of the Sirius project.

“They’ve got to allow it to be built. The area desperately needs the jobs,” said Tony Bistro, a property developer living in Helmsley.

“When there’s an opportunity for jobs you’ve got to take it. They don’t come round that often,” said taxi driver Anthony Ring.


Experiences in Poland may be instructive. The fanfare over shale has soured there, with Exxon Mobil, Marathon Oil and Talisman Energy all getting out due to the red tape and difficult geology.

Kamlesh Parmar, chief executive of 3Legs Resources , which has been exploring for shale oil and gas in north Poland since 2007 in partnership with ConocoPhillips , said a centralised system for planning was crucial to making the process more efficient.

“Local authorities tend to be terrified of getting something wrong, so they delay, ask loads of questions, and as a small company you suffer death by a thousand cuts,” Parmar said in an interview in London.

“That’s what has to be avoided, it needs to be centrally driven,” he added.

The British government has accepted the need to clarify how the planning process works for shale and other onshore gas projects and will publish industry guidance later this month.

Local residents are also keen to maintain their influence over projects that fall on their patch.

Adam White, who runs the Brandysnap Bistro in the village of Thornton-le-Dale on the edge of the moors, said he felt the government was giving shale gas a green light before really developing a strategy for how it would be exploited.

White campaigned unsuccessfully against the development of Moorland Energy’s gas processing plants on the outskirts of his village, gathering 14,000 signatures against the project.

“I feel we’re losing our local power, our localism, and I think that’s going to continue,” he said.

Parmar, whose focus at 3Legs remains on Poland, said the shale buzz in Britain was giving him a sense of deja vu.

“What I see in the UK is what happened in Poland three or four years ago,” he said.

“There’s a lot of hype, and not everything is going to work, but it’s still pretty exciting.”

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