Report to the Leader of the County Council
Report submitted by: Interim Executive Director for Environment
Date: 10 December 2014
Part I
Electoral Division affected:
None
The Environment Agency draft Decision on Applications for Environmental
Permits from Cuadrilla Elswick Ltd for the Proposed Exploratory Shale Gas
Site at Roseacre Wood, Fylde, Lancashire
Contact for further information:
Clare Phillips, 01772 534188, Environment Directorate,
clare.phillips@lancashire.gov.uk
Andrew Mullaney, 01772 534190, Environment Directorate
andrew.mullaney@lancashire.gov.uk
Executive Summary
This report sets out the key issues in the Environment Agency's draft decision (and
further consultation) on Cuadrilla Elswick Ltd applications for environmental permits
from for the proposed exploratory shale gas site at Roseacre Wood, Fylde,
Lancashire.
The report sets out a recommended response from the County Council, taking
account of the council's role as mineral planning authority and public health authority
for Lancashire. The response addresses those recommendations from the Director
of Public Health's recent Health Impact Assessment on shale gas that relate to the
Environment Agency's permits.
Approval would normally be sought from the Cabinet Member for Environment,
Planning and Cultural Services for the County Council's response to the consultation
of this kind. For the purposes of this decision however, approval for the County
Council's response is being sought from The Leader because the Cabinet Member
holds a position on the County Council's Development Control Committee.
Recommendation
The Leader of the County Council is asked to consider and approve the
recommended response to the consultation as set out in the report.
Background and Advice
1. The Consultation
This report describes the Environment Agency's draft decision (and further
consultation) on Cuadrilla Elswick Ltd applications for environmental permits from for
the proposed exploratory shale gas site at Roseacre Wood, Fylde, Lancashire. This
is the second part of a two stage process. The County Council has previously
responded to an Environment Agency consultation when Cuadrilla first submitted
their applications for environmental permits to the Environment Agency for their
proposed new sites at Roseacre (see background papers).
The Environment Agency has now published the draft permits and is inviting further
comment. Each draft permit is accompanied by a decision document that explains
how the applications were considered
The Environment Agency says it is 'minded to grant' Cuadrilla the environmental
permits needed to carry out their proposed operations. The draft permits set out the
conditions needed to protect groundwater, surface water and air quality and to
ensure the safe storage, management and disposal of wastes. If permits are issued,
Cuadrilla would have to follow the proposed conditions that are designed to ensure
that operations do not cause harm to people or the environment.
The consultation documents can be viewed online via the following web site:
https://consult.environment-agency.gov.uk/portal .
Approval would normally be sought from the Cabinet Member for Environment,
Planning and Cultural Services for the County Council's response to the consultation
of this kind. For the purposes of this decision however, approval for the County
Council's response is being sought from The Leader because the Cabinet Member
holds a position on the County Council's Development Control Committee.
2. The Draft Permits
The main features of the draft permits are as follows.
Environmental permit for the management of mining waste involving waste facilities,
the flaring of gas in plant with a capacity of over 10 tonnes per day, and groundwater
activity.
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A mining waste operation for the management of extractive waste not
involving a Mining Waste Facility.
In respect of hydraulically fractured wells, a non-hazardous Mining Waste
Facility for the accumulation of injected hydraulic fracturing fluid which will
remain in the underground target formation and has become waste;
An above ground hazardous Mining Waste Facility for the temporary deposit
and accumulation of hazardous waste in storage containers as the wells are
successively drilled. The hazardous waste will include drill cuttings coated
with residual Low Toxicity Oil Based Muds (“LTOBM”).
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A groundwater activity for the discharge, namely of fracturing fluid into the
target formation, that might lead to an indirect input of a pollutant to
groundwater.
The incineration by flaring of hazardous waste, namely natural gas above 10
tonnes per day, as an activity listed in schedule 1 of the Environmental
Permitting (England and Wales) Regulations 2010.
Environmental permit for a radioactive substances activity permit. Accumulate
radioactive waste and Dispose of radioactive waste.

The permit allows the Operator to accumulate and dispose of radioactive
waste (naturally occurring radioactive material which comes from
underground geology) from the specified premises.
3. Key features of the draft 'minded to grant' decisions.
The key features of the draft decisions are:
Environmental permit for a mining waste operation
The wastes described are solid, liquid and gas and both oil and gas are defined as
minerals. The Environment Agency is satisfied that the draft permit and associated
conditions will require that extractive wastes are managed in a way that minimises
harm to human health and the impact on the environment. The operator has
demonstrated this through a waste management plan that accompanies the permit
application. The Environment Agency is satisfied that the proposals are in line with
the waste hierarchy.
In particular there is a requirement, wherever possible, to re-use the flow back fluid
once the gas has been separated. This will reduce the amount of waste which needs
to be disposed at an offsite facility. About 10-40% of the injected fluid is predicted to
return to the surface.
The applicant proposes to leave some fracture fluid deep underground. The Agency
believes that leaving some of the retained fluid in situ is the 'Best Available
Technique'. The Agency has assessed the components of the fluid to be used in
fracking process and is satisfied that it is non-hazardous.
The Agency is therefore satisfied that the fluid that will be retained underground is
non-hazardous, and over time the retained fluid will become indistinguishable from
the water already present in the target formation.
Environmental Permit for a radioactive substances activity permit
Naturally occurring radioactive material (NORM) is present in many geological
formations including oil and gas bearing strata such as shale formations. The flowback fluid that returns to the surface following hydraulic fracturing, as well as the
sediments and scales in gas or water process vessels, is likely to contain sufficient
NORM that it will be classed as radioactive waste. The level of radioactivity is
extremely low. The Environment Agency has assessed the impact and proposals for
NORM disposal and is satisfied that the applicant has demonstrated that it has
suitable arrangements and contracts in place with licenced waste disposal
companies for its treatment.
Environmental permitting of groundwater activities
The Environment Agency has assessed the proposed activities that could involve the
discharge of pollutants into groundwater (a ‘groundwater activity’) and the nature of
these pollutants. The Agency is satisfied, subject to conditions, that there is minimal
risk of direct discharge of pollutants into groundwater. The Agency is also satisfied
that the indirect entry of non-hazardous pollutants will be limited so as not to cause
pollution.
The operator has informed the Environment Agency of the chemicals they propose
to use in activities and they have been assessed as non-hazardous. Operators are
expected to propose only non-hazardous substances for use.
An assessment of subsurface geology has considered the potential for retained
pollutants in the shale rock to migrate upwards into contact with any groundwater
bearing formations. This outcome has been assessed as very low and with no
plausible pathway.
The rock formation directly above the target formation, known as the Millstone Grit
(at depths of ~1300m to ~1550m below ground level), has been assessed as a
groundwater unit. A groundwater activity permit is therefore required because of the
theoretical possibility that fluid could migrate from the target formation into the
Millstone Grit.
The Agency has assessed the possibility of fluid migration as very low. This is
because of the absence of a pressure gradient driving the fluid once the fracturing
pressure is turned off. Moreover, close monitoring of fractures (using the micro
seismic array and in accordance with the Fracture Plan that must be approved by
DECC and the Agency) will prevent any fractures moving into the Millstone Grit from
the target formation, thus preventing the movement of fluid. The Agency has
assessed the fracture fluid as non-hazardous. It is also satisfied that the chemical
similarity between the fluid and the water in the Millstone Grit is sufficiently high that
any indirect discharge would be insignificant. Finally, the Agency believes that if any
fluid reaches the Millstone Grit it will not move far from the point of entry because of
the confined nature of the rock.
Additionally, the Environment Agency considers the proposed well construction will
form a barrier to prevent the escape of fluids. It is satisfied that well integrity is
assured through compliance with the well examination regime and regulation by the
Health and Safety Executive, and further through conformance to Oil & Gas UK and
UK Onshore Operators' Group good practice guidelines for well design and
construction. Hydraulic fracturing plans and a seismic monitoring programme will be
submitted to Department of Energy and Climate Change (DECC) and the
Environment Agency for approval prior to hydraulic fracturing operation commencing;
operation of the traffic light system for monitoring of induced seismicity is also
designed to mitigate the risk from induced seismicity, including any potential for
damage to well integrity. The potential for fractures that are propagated by hydraulic
fracturing to extend beyond the target formation has been assessed to be very low
and the growth of fractures resulting from each fracturing stage will be assessed with
the aid of the seismic monitoring array.
Monitoring arrangements and conditions
The draft permit includes pre-operational requirements to provide baseline
monitoring of groundwater, air quality and surface water for approval before the start
of operations. The permit also includes a requirement to provide for a monitoring
plan at least 4 weeks prior to gas flaring.
The Environment Agency has specified monitoring of groundwater and surface water
in the permit and this will be carried out until the permit is surrendered.
4. Health Impact Assessment
In November, the County Council's cabinet endorsed the recommendations of the
Director of Public Health in his report on the 'Potential Impacts of the Proposed
Shale Gas Exploration Sites in Lancashire'.
The report contains 45 recommendations relating to a broad range of shale gas
issues and processes. Some 15 recommendations relate to the Environment
Agency; and six of the 15 relate directly to the permits. In other words, the EA
permits can provide a mechanism for the delivery of just six of the 45
recommendations. The Agency can of course contribute to the implementation of
the HIA recommendations through other mechanisms outside of the permits.
The draft permit was issued after the publication of the HIA. The Environment
Agency has therefore had the opportunity to consider the HIA recommendations in
its determination and is satisfied that there will be no significant impact on human
health from the activities it regulates.
Recommendation 9 from the HIA states:
EA should consider requiring the Applicant to measure the levels of fugitive
emissions and establishing conditions on the maximum permissible levels for
fugitive emissions.
The draft permit requires that greenhouse gas emissions are prevented and where
that is not possible minimised. The applicant will monitor for fugitive emissions of
methane. The Agency says it is not possible to apply a limit on fugitive emissions as
by definition they are unplanned and from a variety of sources.
During drilling of the exploratory boreholes, fugitive emissions of natural gas are to
be prevented by increasing the hydrostatic pressure of fluids so as to prevent gas
release. The well will also be equipped with physical control equipment which
enables the borehole to be shut at the surface to prevent escape of gas emissions.
Gas monitoring equipment will be in constant use at the surface. The permit does not
allow the venting of natural gas unless it is necessary for safety reasons.
Fugitive emissions of methane could potentially arise from the wellbore and mud
circulation system. The operator has provided a specific risk assessment for this
scenario, which includes monitoring and proposes emergency control measures. The
operator will carry out testing of all surface pipework to check for leaks prior to
starting the operations and will be carrying out monitoring using Flame Ionization
Detection monitoring equipment during the operations as part of the Environmental
Management and Monitoring Plan required by the permit. The operations will be
benchmarked against baseline levels and should elevated levels of methane be
detected, the well will be shut and the cause for the changes investigated and
remedied. Operation will only resume once the Agency is satisfied that the issue has
been resolved.
Overall, the Agency is satisfied that these measures minimise the risk of fugitive
emissions and, together with condition 3.1 of the permit, provide acceptable controls.
Recommendation 10 from the HIA states:
EA should consider requiring substantial permit variation when the Applicant
applies for extended flow testing period.
The current application to the EA already covers extended flow testing, so this
recommendation is addressed by the permit
Recommendation 17 from the HIA states:
EA should establish whether remaining fracking fluid left in the wells will be
considered as waste and how they will be monitored in the long term following
the surrender of the permit.
The Agency reasons that hydraulic fracturing fluid left underground will become
waste once it no longer serves a useful purpose. The Agency also explains its
approach to monitoring. Any permit can only be surrendered when it no longer
considers that ongoing monitoring is required.
Elsewhere in the permit, the Agency explains that it has taken a conservative
approach and this is why appropriate mitigation measures have been proposed and
included throughout the permit.
These will limit the potential of fracture propagation beyond the target formation and
this will in turn reduce the chances of fracture fluid being lost to other formations.
These mitigation measures include the stepped approach to the hydraulic fracturing
process, using small volumes of fluid initially and monitoring the propagation of the
fractures using the seismic arrays, then increasing the volumes used up to a
maximum volume which has been proposed at a much reduced volume than
previously used at Preese Hall, and is limited in the permit.
The Hydraulic Fracture Plan to be approved by DECC will also need approval by the
Environment Agency prior to hydraulic fracturing commencing and this will be a
condition of the permit. The plan will be designed to ensure that the propagation of
fractures is carefully monitored. It should also be noted that it is not in the operator’s
interest to create fractures that extend into the Millstone Grit as it is a waste of
energy and may result in additional water having to be pumped for no extra gas
production
Recommendation 18 from the HIA states:
EA and LCC should satisfy themselves that there are adequate waste
treatment facilities available for safe storage, transport and disposal of the
waste generated before the permit is granted.
The Environment Agency regulates how waste will be dealt with. Issues relating to
the provision and capacity of facilities are matters for the waste planning authorities,
central government and market forces. The Agency states that in the event that
sufficient storage and treatment capacity is not available for a particular waste
stream, operations generating that waste will need to cease.
Recommendation 19 from the HIA states:
EA should establish the maximum additional storage for flow back fluid and
ensure that the site's spill containment capacity takes into account additional
capacity.
On site storage capacity and containment measures are covered by the permit, and
much detail is provided about the storage arrangements and the volume of
containers. There is also a significant amount of detail in relation to the pad
construction, its membrane (including assurance testing) and the drainage ditch
around the perimeter of the well. Unfortunately, it is not possible to easily identify
whether the pad and its drainage ditch would have sufficient capacity to contain a
spill from all (or the majority) of the storage containers. The Agency should
undertake such an assessment before granting a final permit.
Recommendation 30 from the HIA states:
EA should ensure long term plans should be in place for monitoring any
contamination
Monitoring requirements are addressed in the permit, including baseline monitoring
before operations commence. In the event there was a breach of any permit the
Environment Agency would take such action as it considered appropriate at that time
which could include informing other regulators and the Director of Public Health.
Any permit can only be surrendered when the Agency no longer considers ongoing
monitoring is required.
The Environment Agency has the power to impose further conditions if they think
that they are reasonable and necessary to ensure that they are satisfied that the well
can be decommissioned and that there will be no risk of pollution and the permit can
be safely surrendered. The Permit will remain in force until it is surrendered.
There may of course be greater public demand for long term monitoring which goes
well beyond when the Agency deems it necessary and reasonable. The HIA
recognises there is a need for monitoring to provide public reassurance, and this
may go beyond the Agency's requirements.
The County Council will therefore need to discuss with the Agency the role it can
play in a programme of long term monitoring after the site has been restored.
5. Comment and recommended response
Lancashire County Council is in receipt of a planning application from Cuadrilla
Elswick Ltd for the proposed exploratory shale gas site at Roseacre Wood, Fylde,
Lancashire and an associated application for a monitoring array. The application for
the site development will be for drilling, fracking and extended flow testing with a
direct connection to a local gas transmission pipeline if extended testing is to be
carried out. It is proposed to drill 4 vertical vertical/lateral boreholes extending
underground within a defined quadrant as projected to the surface. The application
for the array is for up to 80 monitoring boreholes located strategically around the site
and which will be used to monitor seismicity associated with the fracking and ground
water. The planning application is accompanied by an environmental statement
which has been produced as a result of the environmental impact assessment of the
proposed development.
It should be noted that although shale gas operators must have planning permission
from the planning authority, they must also apply to the Environment Agency under a
separate regime for a range of environment permits. The Environmental Statement,
that accompanies the planning application, was also presented to and used by the
Environment Agency in the determination of the Environmental Permits.
The interrelationship between the permit application determination and the
information presented in the Environmental Statement is recognised. The
Environment Agency view on the suitability of issuing permits will be an important
consideration in the determination of planning permissions. The County Council
reserves the right to make further comment until a view on the Environmental
Statement is established as part of the determination of the planning application.
It is the County Council's view that the Environment Agency should give further
consideration to the following points
a. The Environment Agency has assessed the impact and proposals for
NORM disposal and is satisfied that the applicant has demonstrated that it
has suitable arrangements and contracts in place with licenced waste
disposal companies for its treatment. It is the County Council's view that
the Agency should be satisfied prior to the granting of any permits for the
site that adequate capacity is available, and will remain available into the
future to treat and dispose of the waste streams set out in the permit. It is
the County Councils view that the operator shall review the waste
management plan every five years from the date of initial approval and
submit this to the Environment Agency for approval. Given the uncertainty
in capacity for storage, treatment and disposal of waste, EA should require
the operator to review the waste management plan before the second well
(and not after five years) is drilled in order to inform subsequent waste
management activities. As is recognised in the draft permit, there should
also be a presumption in favour of reusing all flowback water.
b. The Environment Agency has specified monitoring of groundwater and
surface water in the permit and this will be carried out until the permits are
surrendered. It is recognised the Agency will only accept the surrender of
a permit after it is satisfied there is no risk to the environment. It is the
County Council's view that monitoring should be undertaken for the long
term, well after site restoration, to demonstrate there is no risk of any
impact occurring in the long term.
c. The Agency should consider a public consultation period before the
surrender of permits happens.
d. The Agency seeks to regulate the pollution from the entire site during its
operation. This will mean that emissions from the whole site will be
managed and not just the flare.
e. The Agency should specify the maximum storage capacity in volume for
fracturing fluid to be used. It is the County Council's view that the Agency
should i) use international best practice standards to measure fugitive
emissions ii) establish a pre operating condition of a explicit threshold for
fugitive emissions beyond which the agency will ask the operations to
cease.
f. With regards to point source emissions to air, emission limits and
monitoring, it is noted that there are no limit values for oxides of nitrogen,
carbon monoxide, total volatile organic compounds in the draft permit. It is
also unclear whether the levels of other hazardous air pollutants e.g.
benzene will be measured specifically. It is assumed this is because of
the technical difficulties of measuring the constituents of a flame at a
temperature of 800 to 1000 degrees celsius. If this is the case, the EA
permit should require limit values (either by proxy or by monitoring close
by) for the above pollutants and consider measuring a comprehensive list
of hazardous air pollutants.
Consultations
N/A
Implications:
This item has the following implications, as set out in the report.
Risk management
No significant risks have been identified in relation to the proposals contained within
this report.
List of Background Papers
Paper
Date
Contact/Directorate/Tel
Report to The Leader:
Applications for environmental
permits from Cuadrilla
Bowland Ltd for the proposed
exploratory shale gas site at
4 August 2014
Clare Phillips. Environment
Directorate. 01772 534188
Preston New Road at Little
Plumpton, Lancashire.
Reason for inclusion in Part II, if appropriate
N/A