Reed Smith Client Alerts

Authors: Nicholas Rock

Earlier this month, the Environment Agency (EA) published a new regulatory position statement on the environmental permitting of existing onshore oil and gas facilities (including shale gas facilities).

The EA now considers that operators of existing facilities should be subject to the environmental permitting regime for a range of onshore oil and gas activities that their permits (if granted before 1 October 2013) do not currently cover.

The aim is to bring existing operators into line with the requirements placed on operators of new onshore oil or gas exploration or appraisal facilities.

The activities of existing operators that now require an environmental permit are:

  • Management of extractive waste (such as drilling muds and drill cuttings) whether or not this involves a waste facility
  • Flaring of waste gas using a flare which has the capacity to incinerate over 10 tonnes a day
  • Water discharge activities
  • Groundwater activities, such as an indirect discharge of pollutants as part of high pressure, high volume hydraulic fracturing
  • Managing waste that meets the radioactivity thresholds in the EP Regulations 2010 (as a radioactive substances activity), for example naturally occurring radioactive material, or NORM, in the wastewater generated by the hydraulic fracturing process

Operators of existing onshore oil or gas production facilities undertaking these activities will now either need to:

  • Apply to vary their existing environmental permits to add these activities or operations
  • Apply for a new environmental permit if they do not already have one

A permit review process will now run until June 2016 under which the EA is going to review all permits granted to operators of existing onshore oil and gas facilities before 1 October 2013.

The EA will also serve a request for information on the holders of petroleum exploration and development licences that operate existing onshore oil or gas facilities, but do not have an existing permit, to determine whether they need to apply for a permit variation or a new permit. EA notices will also specify by when such applications should be made.

The EA has said that it will not take enforcement action against operators of existing onshore oil or gas facilities that need to apply for a variation or a new permit, provided they:

  • Make an appropriate application for a new/varied permit by the date specified by the EA in its review
  • Conduct their activities on the site in such a way that they pose no risk of pollution of the environment or harm to health
  • Comply with existing permit conditions, unless otherwise agreed in writing by the EA
  • Are not undertaking high pressure, high volume hydraulic fracturing

If any existing operator is undertaking any of the newly covered activities described above, and is not operating in a way that avoids all risk of pollution/harm, or is undertaking any fracturing activity, there is therefore a risk of enforcement in line with the EA’s enforcement and sanctions policy and guidance.

For further information, please contact the authors or your usual Reed Smith relationship lawyer.

Client Alert 2015-105