Nottinghamshire Minerals Local Plan

Background Paper

Hydrocarbons – Oil and Gas

January 2016

Purpose of background paper

This background paper considers the planning issues surrounding the exploration and production of hydrocarbon (oil and gas) resources. This includes conventional resources such as oil which have a long history of development in Nottinghamshire and unconventional resources such as coal bed methane and shale gas which have yet to be exploited but which could provide new energy resources in the future.

Other background papers supporting the Minerals Local Plan

• Aggregates; • Safeguarding; • Archaeology; • Biodiversity; • Brick clay; • Hydrocarbons – oil and gas; • Industrial Dolomite; • Landscape; • Flood Risk; • Site Selection.

Nottinghamshire Minerals Local Plan Hydrocarbons background paper Jan 2016 Index

Page

1. Introduction 1

2. The hydrocarbon industry in Nottinghamshire and national context 1

3. National policy 3

4. Oil and gas licences 4

5. Oil 7 6. Mine gas 8

7. Coal bed methane 8 8. Underground coal gasification 11 9. Shale gas 12

Nottinghamshire Minerals Local Plan Hydrocarbons background paper Jan 2016 1. Introduction

1.1 Hydrocarbon minerals, which comprise oil and gas, are the most important energy minerals produced and consumed in the UK. In 2012 national production stood at nearly 100 million tonnes and consumption 181 million tonnes – see Table 1 below which includes coal for comparison.

Table 1 UK Fossil Fuel production and Consumption 2012 (million tonnes)

Production Consumption Oil 49 67 Gas 39 73 Hydrocarbons total 88 140 Coal 11 41 Fossil fuels total 99 181

Source: BGS UK Mineral Statistics Yearbook 2013

1.2 Over 99% of our current production is offshore and one of the biggest energy issues facing the UK is the expected rapid decline in our domestic oil and gas production due to the depletion of offshore resources. This has become increasingly apparent in that in 2008 the British Geological Society (BGS) reported UK fossil fuel production as being 160 million tonnes, therefore a decline in production of some 60 million tonnes has occurred over the last 4 years with consumption staying largely the same.

1.3 According to the Government, by 2020, the UK is expected to be importing around three quarters of its primary energy needs. This factor combined with high energy prices and recent technological advances has created a very strong commercial and political impetus to explore for and develop new conventional and unconventional resources both offshore and onshore. The latter includes coal bed methane extraction, underground coal gasification and shale gas.

2. The hydrocarbon industry in Nottinghamshire and the national context

2.1 The location of Nottinghamshire’s current oil and gas production sites including the first planning permissions to explore for coal bed methane is illustrated in Plan 1.

2.2 The continued production and development of the County’s oil resources is unlikely to raise any significant issues for the new Minerals Local Plan to deal with. The same applies to the capture and burning

Nottinghamshire Minerals Local Plan 1 Hydrocarbons background paper Jan 2016 of methane gas escaping from many of the County’s old coal mines. Much less certain is the future prospects of the coal bed methane and shale gas both within Nottinghamshire and nationally.

Nottinghamshire Minerals Local Plan 2 Hydrocarbons background paper Jan 2016

2.3 The remainder of this paper looks at national policy guidance on hydrocarbons and the oil and gas licensing system before considering each resource in turn.

3. National policy

3.1 The National Planning Policy Framework (NPPF) sets out minerals planning policy for onshore oil and gas. The Government is clear that responsibility for determining planning applications for onshore oil and gas activities, including for the exploration of shale gas and coal bed methane, will be with Minerals Planning Authorities (MPAs) (such as Nottinghamshire County Council). Decisions will therefore continue to be taken in accordance with up to date local plans.

3.2 The NPPF also makes it clear that MPAs should identify and include policies for extraction of mineral resources of local and national importance in their area. This includes both conventional and unconventional oil and gas. This is addressed in the revised Nottinghamshire Minerals Local Plan.

3.3 The NPPF also expects MPAs to ensure that mineral extraction does not have an unacceptable adverse impact on the natural or historic environment or human health. These issues are also addressed in the Nottinghamshire Minerals Local Plan.

3.4 Unlike aggregates and most other building and construction minerals, there is no requirement to provide for a certain level of production and/or landbank of permitted reserves within the Local Plan. Rather the Local Plan must provide a policy framework that is positive towards the oil and gas industry taking account of any local and other planning issues that will influence where proposals should be located.

3.5 The Government has prepared planning policy guidance on Fracking (July 2013). As the unconventional gas industry develops, the Government wants to ensure an effective, locally-led planning system is in place. The guidance provides advice on the planning issues associated with the three phases of extraction of hydrocarbons. It will be kept under review and should be read alongside other planning guidance and the NPPF. The guidance states that the exploratory, appraisal or production phase of hydrocarbon extraction can only take place in areas where the Department for Energy and Climate Change (DECC) have issued a licence under the Petroleum Act 1998 (Petroleum Licence).

3.6 The Government guidance makes it clear that the planning system is about controlling the use and development of land and should not address other control processes such as health and safety, emissions etc. It sets out the principal issues that MPAs should address with any

Nottinghamshire Minerals Local Plan 3 Hydrocarbons background paper Jan 2016 proposal including the following (only relevant issues will apply to individual proposals i.e. some may not apply if they are not relevant to the proposal):

• noise associated with the operation; • dust; • air quality; • lighting; • visual intrusion into the local setting and the wider landscape caused by the placement of any building or structure within the application site area; • landscape character; • archaeological and heritage features; • traffic; • risk of contamination to land; • soil resources / the impact on best and most versatile agricultural land; • flood risk; • land stability / subsidence; • internationally, nationally or locally designated wildlife sites, protected habitats and species, and ecological networks; • nationally protected geological and geomorphological sites and features; • site restoration and aftercare.

3.7 The guidance also makes it clear where issues should be addressed by other agencies (i.e. not the MPA) these may be relevant to planning applications and therefore may be put before a MPA.

4. Oil and gas licences

4.1 The UK’s onshore oil and gas resources are vested in the Crown and the right to explore and produce oil and gas is controlled by licences issued by the Department of Energy and Climate Change. Details can be summarised as follows:

The Petroleum Exploration & Development Licence system

Since 1995, a single licence, the Petroleum Exploration and Development Licence (PEDL) has been issued by the Department of Energy and Climate Change (DECC) to cover the three main stages of petroleum activity – exploration, appraisal and development.

Licences have an initial term of 6 years during which time a programme of exploration work agreed with DECC must be carried out.

Licences can then be extended for a second term of 5 years to enable further activity of any kind to take place, including exploration subject to planning permission being obtained.

Nottinghamshire Minerals Local Plan 4 Hydrocarbons background paper Jan 2016 The licence may be further extended for a third term of normally 20 years to allow for extraction.

Applications for licences are invited by the DECC in formal rounds for blocks based on 10 x 10km Ordnance Survey grid squares.

Coal bed methane: A PEDL is also required for coal bed methane exploration, appraisal and extraction. Furthermore those wishing to gain access to coal for the purpose of extracting methane will require permission from the owner of the coal, usually the Coal Authority, which has produced maps indicating areas where a licence for coal bed methane extraction would normally be refused or granted.

4.2 Licensed areas in Nottinghamshire are shown on Plan 2. It should be noted that, in addition to the licences, the Coal Authority must give consent to extract mine gas, coal bed methane and to drill through coal seams.

4.3 The granting of a licence does not convey any presumption in favour of planning permission being granted which must be obtained in the normal way from the Minerals Planning Authority (MPA).

Nottinghamshire Minerals Local Plan 5 Hydrocarbons background paper Jan 2016

Nottinghamshire Minerals Local Plan 6 Hydrocarbons background paper Jan 2016 5. Oil

5.1 Oil exploration in Nottinghamshire began prior to the Second World War when oil reservoirs in Carboniferous sandstones found below the Coal Measures were identified near Eakring in the north of the county. These sandstones occur at great depth and underlie most of Nottinghamshire. They are porous and permit the passage of oil and gas which, being lighter than water, tend to migrate upwards. Overlying impermeable rocks or some other geological feature such as a fault may act as a trap creating potential oil fields.

5.2 A number of other oilfields have since been discovered in the County; most in the north except for Rempstone (see Plan 1). Eakring remained the most productive field until it became depleted in the early 1960s. Since then the Beckingham Field became the most important although production in this field has declined sharply in recent years due to depletion. In 2010 nine fields were active including Eakring where production recently resumed following a successful new drilling programme.

5.3 Until the late 1970s Nottinghamshire was the largest producer of on- shore oil in the UK, although at 30,000-50,000 tonnes per annum1 this was small compared to offshore production. In recent years oil production in Nottinghamshire has been much lower, although the lack of local published data on production statistics prevents any direct comparison with past production levels.

5.4 Since the 1970s national on-shore oil production has been dominated by the development of the Wytch Farm Field in Poole Harbour, Dorset which peaked at over 4 million tonnes per annum in the mid-1990s. There have also been some significant new discoveries in Lincolnshire but nothing on the scale of Wytch Farm. Today Nottinghamshire accounts for only a very small percentage of national on-shore oil production. The oil recovered is nevertheless of high quality and mainly used in the plastics and chemical industries, rather than as a fuel. The majority of oil is distributed by rail from a central collecting station at Gainsborough.

Oil - future prospects and planning issues

5.5 There seems little prospect of any major new fields being discovered in this intensively explored resource. New technologies might allow more oil to be extracted of what remains in the ground, but there is no evidence to suggest that a major increase in oil production will occur in the foreseeable future. The scale of oil production in Nottinghamshire is such that few significant planning and environmental issues have been raised and it seems unlikely that future oil extraction will raise any critical issues for the Local Plan to resolve. The policy approach set out

1 Nottinghamshire Minerals Local Plan 2005

Nottinghamshire Minerals Local Plan 7 Hydrocarbons background paper Jan 2016 in the 2005 Minerals Local Plan (Policies M13.1-3) is broadly in line with the NPPF. Policy MP12 of the new Minerals Local Plan is in line with National Policy and Guidance.

6. Mine gas

6.1 Mine gas (not to be confused with coal bed methane – see below) is the methane trapped within coal that naturally seeps out of old and current mine workings. These seepages have become much more of an environmental and safety issue due to the number of deep mine closures over the past 30 years. As soon as the mine ventilation systems are switched off the gas will start to accumulate and eventually escape via shafts and fissures to the surface.

6.2 This gas can now be collected and burnt on site to generate electricity so making good use of this very potent and explosive greenhouse gas that would otherwise be lost to the atmosphere. Its collection can also help resolve health and safety issues that uncontrolled gas seepages to the surface can cause. The environmental impacts associated with this type of development are limited and can usually be resolved by careful siting of the generator and other plant.

6.3 In Nottinghamshire mine gas has been exploited for nearly 10 years and in 2010 there were 11 active schemes with 4 more proposed (see Plan 1). There is no data of gas production but each scheme is likely to last around 25 years, with gas generation usually ceasing when rising groundwater cuts off the gas supply.

6.4 Future mine gas proposals are unlikely to be submitted to the County Council for consideration as very few further opportunities exist to exploit this gas but, subject to adequate environmental safeguards, there are clear environmental and sustainability advantages in maximising the use of this resource. This is the stance taken by the Minerals Local Plan (Policy MP12) which is still considered to be the only reasonable option for dealing with the exploitation of this resource.

7. Coal bed methane

7.1 Most coal at depth contains large quantities of methane which, with the right technology, can be extracted in-situ leaving the seam intact in the ground – a process known as coal bed methane extraction. The potential viable resource is most likely to exist at depths between 200 - 1500 metres. At shallower depths the gas will probably have escaped to the surface and below 1500 metres the costs of drilling are unlikely to be recovered. Plan 3 indicates the extent of the potential resource in Nottinghamshire based on these parameters. This indicates that the entire eastern half of the county has the best potential for coal bed methane extraction. Plan 4 is a cross section of the County which

Nottinghamshire Minerals Local Plan 8 Hydrocarbons background paper Jan 2016 illustrates the general relationships of the underlying coal measures to the surface.

7.2 This industry is best developed in the United States of America where it accounts for nearly 10% of domestic natural gas production2. In the USA the extraction of methane has proved viable within a wide range of geological environments from the Appalachian Coalfields in the east, that are of a similar age and character to those in the UK, to the much younger coals flanking the Rocky Mountains in the west.

7.3 In the UK and Europe the industry is in its infancy and only recently has interest started to develop and exploration activity begun.

7.4 The position in Nottinghamshire in respect of exploratory drilling for Coal Bed Methane is as follows:

• Live planning permission at land east of Eaton, Retford (due to expire 4th February 2016); • Planning permission implemented and restored at Daneshill, Torworth; • Planning application withdrawn at land south of Grove Road, Retford; • Lapsed planning permission at land south of Bumblebee Hall, Hodstock.

7.4 Elsewhere in the UK coal bed methane proposals are being developed at Keele University, Staffordshire and in Scotland. To date none of these are on the scale seen in the USA and it is too early yet to gauge what the potential of this resource will be in the future.

7.5 The NPPF and national guidance advises that the Minerals Local Plan or other Development Plan Documents (where appropriate) should identify the extent of the coalfield with reserves at depths below the surface of between 200-1500m along with areas licensed by the Coal Authority. For Nottinghamshire this area is illustrated in Plan 3.

7.6 Avoiding residential areas and areas designated for their wildlife or heritage value will be key considerations across the UK. The proximity of water abstraction points within the aquifer is likely to be a particular local issue for Nottinghamshire and any key constraints are likely to differ on a site by site basis.

2 http://energy.cr.usgs.gov/oilgas/cbmethane/

Nottinghamshire Minerals Local Plan 9 Hydrocarbons background paper Jan 2016

Nottinghamshire Minerals Local Plan 10 Hydrocarbons background paper Jan 2016

7.8 The potential environmental impact of coal bed methane exploration and extraction is broadly similar to oil. The main distinction is that the resource area is likely to be much more extensive and a denser network of boreholes may be necessary (with the spacing of one borehole 500 – 1000 metres being typical). Another distinction is that significant amounts of water trapped in the coal have to be extracted during well stimulation. This water, which is usually saline, can be difficult to dispose of in an environmentally acceptable way.

7.9 This issue along with the contamination of aquifers has been a matter of some concern in the USA. Ultimately the significance of coal bed methane extraction and the environmental issues raised will depend very much on just how intensively this resource is developed.

7.10 The Minerals Local Plan (Policy MP12) sets out the County Council’s requirements in terms of Coal Bed Methane.

8. Underground coal gasification

8.1 Energy can also be recovered from coal in the ground by a process known as ‘underground coal gasification’. This burns the coal underground using steam/water and oxygen to generate hydrogen, carbon monoxide and methane. It generates far more energy than coal

Nottinghamshire Minerals Local Plan 11 Hydrocarbons background paper Jan 2016 bed methane which does not extract any energy from the solid coal itself. Globally this technology has not been applied to any significant extent and the prospect of this technology being developed in the UK remains very uncertain.

8.2 If pursued it is likely that underground coal gasification would be first tested and applied offshore where licences exist.

9. Shale gas

9.1 Vast quantities of methane exist in many shale deposits worldwide and technological advances are now making it possible to economically exploit this gas. Like coal bed methane extraction, this technology is most developed in the USA where it has gone though period of very rapid development and is now being exploited on a very large scale. In 2010 it accounted for 23% of domestic natural gas production3. The North American resources known as ‘Shale Gas Plays’ are very large, being found in large geological basins between the Appalachian and Rocky Mountains extending north into western Canada.

9.2 The UK also has a significant, but as yet largely untested, potential shale gas resource. The first exploration well is near Blackpool in Lancashire.

9.3 The wells target deeply buried Carboniferous shales which are seen as the most promising prospect in the UK. The Department of Energy and Climate Change (DECC) has published a report looking at the potential of Britain’s onshore basins of unconventional Hydrocarbons. This identifies a wide range of geological formations that could contain shale gas. The most promising prospects in Nottinghamshire appear to be within Carboniferous basins not too dissimilar to those being explored in Lancashire. These too are found at great depth and exist in the south and far north of the county (see Plan 5).

9.4 Currently, there are no shale gas extraction or fracking activities taking place in Nottinghamshire. However, a planning application has been submitted to the County Council for groundwater monitoring boreholes at Misson.

9.5 Shale gas extraction involves vertical and horizontal drilling to reach the shale rock layer. A mixture of water and sand is then pumped under high pressure into the bore hole to fracture the rock (a process known as ‘fracking’). The gas trapped in the rock is then released and can be collected. Large quantities of water (around one million gallons per day per borehole) and large energy requirements are involved.

3 http://geology.com/energy/world-shale-gas

Nottinghamshire Minerals Local Plan 12 Hydrocarbons background paper Jan 2016 9.6 The Government believes unconventional gas has the potential to provide the UK with greater energy security, growth and jobs. While shale gas in the United Kingdom (UK) is in the very early stages of development, scientists from the BGS have estimated that the total volume of gas in the Bowland Hodder shale in northern England at some 1,300 trillion cubic feet. The BGS is doing further work to establish the amount of shale gas in the Weald Basin in the south east of England.

9.7 In January 2012, the Government stated that they were supportive of the industry '…so long as such exploitation proved to be technically and economically viable, and can be carried out with full regard to the protection of the environment'.

9.8 There have been various reports of pollution incidents and concerns in some of the US operations. The Blackpool exploration is believed to have caused some very small earthquakes and as such this activity is receiving a great deal of media attention and controversy.

9.9 Like coal bed methane, it is too early to know if shale gas will become a major national and local issue or if its development will stall due to economic or other constraints.

9.10 The Minerals Local Plan (Policy MP12) sets out the County Council’s requirements in terms of proposals for shale gas.

Nottinghamshire Minerals Local Plan 13 Hydrocarbons background paper Jan 2016

Nottinghamshire Minerals Local Plan 14 Hydrocarbons background paper Jan 2016 Key references

1. National Planning Policy Framework (2012) 2. Nottinghamshire Minerals Local Plan Nottinghamshire County Council 1997 and 2005 3. Onshore Oil and Gas Mineral Fact Sheet British Geological Survey 2011 4. The Unconventional Hydrocarbon Resources of Britain’s onshore Basins – Shale gas Department of Energy and Climate Change 2010 5. Note of meeting with British Geological Survey 17 January 2011 6. UK Coal Response for new Exploitation Technologies Final Report British Geological Survey Commissioned Report CR/04/015N 2004 7. Coal bed methane : Potential and Concerns Fact sheet U.S. Geological Survey 2000 8. United Kingdom Minerals Yearbook 2009 (and earlier years) British Geological Survey 2010 (and earlier years) 9. Coalbed Methane and Coal Stratigraphy Research United States Geological Survey http://energy.cr.usgs.gov/oilgas/cbmethane/ Accessed December 2011 10. World Shale Gas Resources http://geology.com/energy/world-shale-gas Accessed December 2011

Nottinghamshire Minerals Local Plan 15 Hydrocarbons background paper Jan 2016