Abstract
Keywords
Introduction
Halite Energy Group Limited v Secretary of State for Energy and Climate Change (‘the Preesall case’) concerns the application for a development consent order for an underground gas storage facility at Preesall in Lancashire and is to date the only application for an underground facility under the Planning Act 2008.
Despite the Examining Authority's recommendation to grant development consent (report dated 21 January 2013 1 ), the application was refused by the Secretary of State on 9 April 2013. 2
A judicial review of this decision was brought by the applicant, Halite Energy Group Limited (‘Halite’). In January 2014, the claim was successful and the High Court overturned the Secretary of State's decision. 3 The application has now gone back to the Planning Inspectorate and is currently being re-determined.
This article discusses the nature of geological information required for such a development consent, the standard of proof, management of uncertainties and the interaction of other regulators. It will not look at the detail of the geological issues at the Preesall site itself. It will instead explore the lessons from this case for future underground facilities and how to manage geological uncertainty in the planning process. In particular, the article considers the possible implications for a future geological disposal facility for higher activity radioactive waste and the soon to be drafted National Policy Statement in respect of a geological disposal facility in England.
The Examining Authority's position on geological assessment
In its report of Findings and Conclusions and Recommendations to the Secretary of State 4 the Examining Authority found that the geological information presented by Halite was insufficient for the purposes of the Gas Supply Infrastructure and Gas and Oil Pipelines National Policy Statement (NPS) EN-4.
Under the Planning Act 2008, a development consent order application must be decided in accordance with any relevant NPSs except to the extent that: it would cause the UK to breach any international obligation; it would lead to a breach of duty imposed on the Planning Inspectorate or Secretary of State; the application would otherwise be unlawful for any reason; the adverse impact of the proposed development would outweigh its benefits; and/or the Planning Inspectorate or the Secretary of State are satisfied that any condition prescribed for deciding the application otherwise than in accordance with a national planning statement is met.
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The Energy Overarching National Policy Statement EN-1 (‘NPS EN-1’) sets out the need for further gas storage capacity in the UK to ensure its security of supply, specifically including increased gas storage capacity in underground storage facilities or as liquefied natural gas in tanks above ground. 6
NPS EN-1 also acknowledges that an underground storage facility would be subject to stringent safety standards covering the life cycle of a facility from design and build through to decommissioning under the Control of Major Accident Hazards Regulations 1999 (‘COMAH Regulations’).
NPS EN-4 requires an applicant to carry out a detailed geological assessment to demonstrate the suitability of the geology at the site for the type of underground gas storage proposed. 7
NPS EN-4 also states as follows at paragraph 2.8.9: In addition, a study of the geological integrity of the overlying strata and potential for collapse, taking account of the proposed minimum and maximum working pressures, will need to be undertaken. The assessments should include the construction, operational and decommissioning phases and should cover the long term integrity of the affected strata after decommissioning or closure of the storage facility. [PINS] will consider the geological assessment alongside the environmental assessment if the former does not form part of the [Environmental Statement]. ‘In this area of public administration … policy statements should be interpreted objectively in accordance with the language used, read as always in its proper context.’
The Examining Authority considered first whether the storage volumes proposed were reasonably achievable. It then considered the key risks associated with geology, project infrastructure, residential areas and local amenities which might affect site selection.
Subsequent to development consent being granted, the geological hazards associated with an underground gas storage facility would be dealt with under the COMAH Regulations by the Health and Safety Executive (HSE), who regulates and approves the ultimate design and operation of the caverns. The geological suitability of the site is nevertheless a legitimate planning concern. Various surface infrastructure would be constructed in parallel with Halite seeking COMAH approval of the preconstruction safety reports for cavern construction. It is correct, therefore, for the planning regime to assess whether the site is geologically suitable for the proposed development. If, after the further assessment required by the HSE under the COMAH Regulations, the development was not permitted by the HSE to proceed or to proceed on a more limited basis, then the benefit of the development may not outweigh the disruption caused to the community and the environment.
The Examining Authority stated at paragraph 5.65 of their report that ‘we consider that the geological analysis submitted as part of the application falls short of that required by NPS EN-4 to prove beyond reasonable doubt that the geological structure, thickness and faulting of the halite are suitable for the construction of caverns of the particular sizes and shapes within the specified areas and in order to support the volume of gas storage proposed for the application’.
However, the Examining Authority's overall conclusion was that the application could be granted on the proviso that Halite (1) ‘demonstrate that the suitability of the salt in the two polygon areas is as high as it is assumed for the purposes of the application’ 8 and (2) that a development consent order is made subject to ‘a major proviso concerning the procurement of more detailed geological data to confirm the ability of the two polygons to store substantial volumes of gas’. 9
The Examining Authority's conclusion was that the risks were not sufficient to refuse to grant the development consent order as more comprehensive geological surveys would be carried out post approval.
The Secretary of State's position on geological assessment
The Secretary of State’s decision letter stated that there was ‘significant uncertainty surrounding the two proposed potential cavern developments areas given the lack of hard geological data to demonstrate their suitability for underground gas storage’. 10
The Secretary of State concluded that in the absence of a pre-application geological assessment as required by NPS EN-4, the suitability of the proposed underground storage facility could not be properly assessed and may also have gone some way to contributing to local fears and opposition to the project. 11
The Secretary of State was also of the view that ‘there is a clear gap in geological data contained in the application which means that Halite have failed to demonstrate the suitability of the geology at the site for salt cavern storage. The Secretary of State considers that the absence of such an essential element of the project bears heavily on his decision’. 12
Without being able to confirm the size of the facility as the number and size of the caverns was dependent on further geological information, the Secretary of State decided it was not possible to understand with a degree of certainty the potential benefits of the project against the more clearly defined potential impacts (one of the tests for whether development consent should be granted under section 104 of the Planning Act 2008).
The Secretary of State considered it would not be appropriate in this particular case to grant consent which was conditional on the collection of evidence as to the suitability of the geology at the site after grant. The figure of 300 million cubic metres for the minimum capacity proposed by the Examining Authority was, to some extent, arbitrary and, in the circumstances, the Secretary of State considered that he could not reasonably rely on this assessment as a basis for decision-making. 13
The High Court's position on geological assessment
Halite brought a claim for judicial review of the Secretary of State's decision on five grounds: the Secretary of State had misunderstood national policy at paragraph 2.8.9 of NPS EN-4; the decision was taken on the basis of a material mistake of fact, was procedurally unfair and/or irrational in concluding that the Secretary of State was ‘not persuaded’ that Halite had complied with the requirements of EN-4 as regards provision of geological survey data; the decision was procedurally unfair in concluding that ‘there is a significant possibility that either no development would be possible or the project as ultimately constructed would have a much smaller storage working capacity than has been envisaged in the application before the Secretary of State’; the decision was procedurally unfair in concluding that a certain type and/or level of geological information was a ‘pre-requisite’ for an application for an underground gas storage facility under the Planning Act 2008; and the decision was irrational in that the Secretary of State failed to set out adequate reasons for his conclusions, including that he had ‘no convincing evidence in front of him as to the size of the project that might ultimately be constructed and hence is unable with any degree of certainty to consider the potential benefits, especially in respect of the need for infrastructure of this type, against the more clearly defined potential impacts’. Although the Examining Authority addressed that by proposing a minimum storage capacity of at least 300 million cubic metres, the Secretary of State found that he could not reasonably rely upon that as a basis for decision making.
The High Court held that the Secretary of State's decision to refuse development consent for the Preesall underground gas storage facility was unlawful and could not stand. Whilst detailed geological data for the site is required under NPS EN-4, the court found that this did not necessarily have to include capacity and the Secretary of State did not, therefore, correctly apply the national policy. It was also held that there was a lack of fair and transparent process in certain parts of the examination on the part of the Examining Authority and the challenge on the basis of fairness therefore succeeded. The court concluded that there were real deficiencies in the reasoning of the Secretary of State in his decision letter and that these were sufficient to make his decision irrational.
The points regarding standard of proof and geological capacity are considered in more detail below.
Standard of proof
The High Court found that both the Examining Authority and the Secretary of State applied too high a standard on geology – references to the criminal standard of proof, beyond reasonable doubt, were an error of law and unfair to Halite. The appropriate burden of proof is the balance of probabilities. The High Court cited R (on the application of Bleaklow Industries Limited) v Secretary of State for Communities and Local Government [2008] EWHC 606 at [92] as authority for this.
The reality of virtually all underground developments is that it will not be possible to fully understand the actual geological environment until planning consent has been granted and works have started underground. Collecting information through boreholes, seismic investigations and other means will only provide a certain amount of data which will then have to be interpreted through modelling techniques.
A sieve map technique was adopted by Halite of all known hazards and constraints (such as faults or proximity to existing workings) and a 3D model developed. The proposed cavern development areas were defined by avoiding known hazards.
Consequently the areas were located where there was actually less geological data. The assumption was made that the areas were suitable for the cavern construction based on extrapolation of data in the 3D model which concluded that the known faulting did not extend into these areas. This conclusion was entirely plausible, but could only be confirmed on further geological surveys.
Capacity of the underground facility
In the judicial review proceedings, the Secretary of State submitted that the detailed geological assessment was required by NPS EN-4 to establish both the suitability of the geology for storage and also that the site had capacity to accommodate all of the development proposed.
The visual impact of the surface infrastructure in this case was understandably of concern, and the amount of surface infrastructure was reported to be uncertain until one knew the actual capacity of the caverns proposed. Consequentially the capacity of the caverns was required to be demonstrated by the applicant.
The High Court, however, concluded that whilst detailed geological data for the site is required, this does not necessarily have to include capacity. Capacity is a land use planning issue, but in this case the High Court found that it does not need to be pursued through a geological assessment. NPS EN-4 did not state that capacity was needed to be considered as part of the geological assessment. Capacity could instead be covered in the environmental statement when assessing the impact of the proposed development. If, post grant of consent, the host rock was found to not be able to provide the maximum capacity applied for, then the surface impacts of the project would be no worse and likely less than those assessed in the environmental statement.
Commentary and implications for a future geological disposal facility for higher activity radioactive waste
The planning process does not regulate geological safety or releases into the environment (including the geological environment). Safety is regulated by the HSE and, for underground projects involving nuclear activities, also the Office of Nuclear Regulation. In England, the Environment Agency regulates emissions into the environment and other activities such as waste management and disposal. The Environment Agency also has regulatory responsibilities under the COMAH Regulations.
It was an agreed principle in the Preesall case that there should be no duplication of the safety aspects which require approval under COMAH. However, the roles of regulators when it came to geological assessment in the Preesall case were not clear cut. There were concerns raised in the examination process over the requirement for certain geological information being an overlap with the HSE's domain, but that it was reasonable to require that information for land use planning purposes and for it to be a matter for the development consent order in advance of the COMAH regime applying.
More detailed geological assessments were undoubtedly required post development consent by the HSE as each of the individual caverns needed to be designed and approved on an individual basis under the COMAH Regulations. Construction of each cavern could not be commenced before it had regulatory approval under COMAH. This included the submission and approval of a pre-construction safety report (which would set out the detailed design of the caverns).
In July 2014, the UK Government published its White Paper on Implementing Geological Disposal – a framework for the long-term management of higher activity radioactive waste. 14
It is the UK Government's policy to manage higher activity radioactive waste in the longer term through geological disposal. Geological disposal involves isolating radioactive waste within a highly-engineered facility deep inside a suitable rock volume to ensure that no harmful quantities of radioactivity every reach the surface environment.
The White Paper makes it clear that a geological disposal facility will be a Nationally Significant Infrastructure Project, and the government intends to amend the Planning Act 2008 to bring geological disposal facilities into the Act's scope for England. 15 In addition, the government intends that surface-based borehole investigations that are necessary to characterise and assess potential sites will also be brought within the definition of Nationally Significant Infrastructure Projects, in their own right. The government has also stated that it will develop a generic (non-site specific) National Policy Statement to support the planning process for a geological disposal facility.
The National Policy Statement for a geological disposal facility will have to set out the process for geological assessment. Given the significance of geology for a geological disposal facility, it would be advisable for the National Policy Statement to provide more detailed guidance than EN-4 did for underground gas storage on what a detailed geological assessment should cover to support a development consent order application, how geology relates to the planning process and what is within the jurisdiction of other regulatory regimes. NPS EN-4 does not provide any detailed guidance on what is required for a detailed geological assessment for an underground gas storage facility and consequentially there was uncertainty and disagreement around what should be included in the geological assessment in the Preesall case, as discussed above.
It is unavoidable that there will be ongoing geological uncertainties at the planning stage for a geological disposal facility, and further assessment will be required. The National Policy Statement should therefore set out the framework for resolving such issues during the progression of the project after development consent has been granted. It should be made clear that additional geological assessment will be required after the grant of the development consent order to validate the modelling assumptions which will undoubtedly be present in the geological assessment which will have been submitted as part of a development consent order application.
The National Policy Statement should ideally establish: (1) what geological suitability issues need to be resolved before development consent can be granted; (2) the burden of proof for this; (3) what can be dealt with after approval and be a condition set out in the development consent order; and (4) what are not planning matters and for other regulators to deal with. In addition, the National Policy Statement should provide advice on the overall capacity of a geological disposal facility, given there is still likely to be uncertainty over the ultimate final size of a facility at the development consent order stage.
A development consent application will have to include a detailed geological appraisal to demonstrate the suitability of the site for the development proposed. It should demonstrate on the balance of probabilities that the geology is the type of medium appropriate for the purpose of a geological disposal facility. However, the ultimate size of the underground facility of a geological disposal facility and its waste storage capacity should not have to be proven by the geological assessment. Parameters for the facility's size and capacity should be set out in the environmental impact assessment in order to ensure that the impact of development has been appropriately assessed.
As with NPS EN-6 (National Policy Statement for Nuclear Power Generation), a National Policy Statement for a geological disposal facility should consider the issue of overlapping consenting regimes and provide guidance on the extent to which matters dealt with by other regimes (such as Generic Design Assessment) may be relevant to the development consent order process. The National Policy Statement should direct the Planning Inspectorate and the Secretary of State to assume that other permitting regimes will be properly applied and enforced, and they should not duplicate the consideration of matters that are within the remit of the other regulators.
A geological disposal facility will have numerous additional consenting processes to go through in addition to planning, in particular the nuclear site licence application process with the Office of Nuclear Regulation and environmental permitting with the Environment Agency. These are both staged licensing processes, with requirements through the lifetime of the licence/permit to continue to demonstrate compliance with the nuclear safety case and/or environmental safety case. If at any time the project cannot meet those safety cases, the operations will not be able to proceed.
The new siting process in the White Paper makes it clear that in addition to a section 106 agreement to mitigate the impacts during construction and operation and the funding arrangements to facility community engagement during the planning process, there will be an additional investment to a community that hosts a geological disposal facility. The National Policy Statement should also clearly set out the processes which will ensure that the impacts of a geological disposal facility will be addressed. In addition to those provided in the planning regime, this will include the ongoing financial requirements of the operator under nuclear site licensing and environmental permitting and the decommissioning funding which is particular for a geological disposal facility.
Conclusion
The Preesall case was decided on its own local and project-specific facts as well as the National Policy Statements which are applicable to underground gas storage. It is still nevertheless important case law and provides useful guidance for future underground projects, in particular in relation to the requirements for detailed geological assessments.
The High Court judgment serves as a reminder of the correct standard of proof for establishing suitability: the balance of probabilities. The case also provides useful guidance on what is a legitimate planning consideration and what is for the assessment and control of other regulators such as the HSE and the Environment Agency.
Underground developments can present particular difficulties in the planning regime due to the uncertainties which will often exist around the actual characteristics of the underground development site, which will only be completely understood once the construction of the facility has commenced.
Some uncertainties cannot be resolved at the pre-planning stage. It is therefore of crucial importance that the planning process clearly identifies these realities and has a clear procedure for managing the uncertainties from pre-planning assessment through to development consent order conditions and the framework of controls which will be for the post planning assessment of other regulators.