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10 March 2014 | Comment | Article by Shelley Ikram

Fracking – How far down does ownership go?

The current dispute between landowners near Fernhurst, Sussex and the energy company Celtique Energie has brought the process of fracking into the spotlight once again. The landowners have refused to give permission for Celtique Energie to drill beneath their land. This has prevented Celtique from drilling a well which is long enough to extract shale oil or gas.

If Celtique attempted to drill without the landowners’ consent then they would be at risk of the landowners bringing a trespass claim against them.

The leading case on the issue of drilling is the Supreme Court decision of Bocardo SA v Star Energy UK Onshore Ltd [2010]. In that case Star Energy attempted to drill for oil on Bocarda’s land without their permission. Bocardo issued trespass proceedings against Star Energy.

Although the Supreme Court dealt mainly with the amount of damages to be awarded to Bocardo (as that was the basis of the appeal) it also considered the issue of how far below the surface Bocardo owned its land. Star Energy argued that Bocardo did not own the land at the depth which the wells had been drilled. The Supreme Court affirmed the decision inMitchell v Mosley [1914]which was that the owner of the surface land was the owner of strata beneath it including the minerals that were to be found there. The exception to this rule was when the rights to minerals have been disposed of or retained by someone else by a conveyance, common law or statute.

The Supreme court accepted that since Mitchellit was possible to penetrate much deeper into the earth’s surface than had previously been the case. Therefore there must be some stopping point at which features such as temperature and pressure mean that the concept of strata no longer exists. However in this case the wells were from 800 feet to 2,800 feet in depth and so the concept of strata was still applicable.

As the law currently stands, if energy companies begin fracking without first obtaining the permission of the owners of land above it is likely they will be met by an application for an injunction preventing them from doing so. The Department for Energy and Climate Change is already making changes to planning laws, and they are now considering a statutory exception allowing energy companies to drill beneath land which they do not own. A consultation on this is expected shortly. If the government does decide to step in it will be interesting to see how it approaches balancing the rights of land owners versus the desire to utilise new sources of energy.

Author bio

Shelley is a Senior Associate in Hugh James Commercial Property team. She has extensive experience in acquisitions and disposals, consortium schemes, and planning and infrastructure agreements.

Shelley has experience in dealing with both private and public sector clients including Barratt, Taylor Wimpey, Persimmon, Welsh Assembly Government and The Crown Estate.

Disclaimer: The information on the Hugh James website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. If you would like to ensure the commentary reflects current legislation, case law or best practice, please contact the blog author.

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