News that Scottish Ministers have extended a fracking licence in the central belt of Scotland was met yesterday with something like disbelief.  

The 400km2 licence, called PEDL162, is owned by INEOS and Reach CSG, who recently lost a judicial review against the Scottish Government’s position on fracking.

While it is unlikely the 12 month extension will allow the operators to do much in terms of advancing their shale gas ambitions, the terms of the licence provided clear grounds to revoke it.  

PEDL162 was acquired by Reach CSG in 2008, who got planning permission for exploratory extraction of coalbed methane in 2011, and an accompanying permit from SEPA, some time before the moratorium on onshore oil and gas extraction was put in place in January 2015. INEOS jumped on board in October 2014, buying an 80% stake in the licence. Planning permission for the well expired in 2016 with no drilling having taken place, a 2014 application to extend planning permission having been withdrawn by Reach. Community opposition to a planning application at a second site resulted in that also being withdrawn. The initial term of the licence was due to expire in 2014 but was extended twice by the UK Government to 30 June 2018. These, and the recent extension, were granted despite the ‘drill or drop’ terms of the license which state that the operator is required to drill one well during the initial phase, or allow the licence to automatically cease.

Under the ongoing moratorium on unconventional onshore oil and gas extraction, the operators, INEOS and Reach CSG could undertake seismic surveying and core sampling, in the areas under licence, including PEDL 162 and neighbouring PEDL 133. However, any applications to drill or frack for shale gas or coalbed methane would be determined by Scottish Ministers, who are unlikely to approve them given their position of no support for fracking.

Powers over onshore oil and gas licensing were devolved to the Scottish Government under Scotland Act 2016, and transferred on 9 February 2018, giving Scottish Ministers the authority over existing and future licensing. It is extremely uncomfortable for the Scottish Government that their first use of these powers was to extend a fracking licence.

The decision adds to the confusion created by INEOS’s recent legal challenge, and the arguments put forward by the Scottish Government’s lawyers in court. Ultimately, it increases the pressure on the Scottish Government to move forward with its decision making process, legislate to ban fracking and draw a line under this issue for good.