31 January, 2019
Although relatively new on the scene, fracking has recently hit more news headlines and is unlikely to stop in the near future.
The fracking site on the Fylde Coast in Lancashire near Blackpool has recently had a great deal of publicity, mostly negative, which includes reports of mini earthquakes caused by the fracking that temporarily stopped the exploratory drilling.
The Government is using fracking as one of the resources to meet its legally binding 2050 emissions reduction target that includes demand for natural gas. The government believes that Shale gas has the potential to be a safe, secure and affordable supply of energy with carbon emission levels consistent with the carbon budgets defined in the Climate Change Act and international obligations.
The full environmental impact of fracking is not yet known, and one of the main issues that affects these areas is potential contamination of water if the containment and drainage of wastewater is not sufficient. During the fracking process, hazardous materials are released from the ground that can leach into local water sources and the ground, containment and treatment of these materials is therefore vital for any fracking site and is closely monitored by the environmental agencies.
The question is, what impact will this have on house and land prices going forward and the ability to sell properties that are in close proximity to a site?
House prices on the Fylde coast in Lancashire near the fracking site have been reported by the media as affected by the fracking and the following report in 2016 summarised the effects that could be seen on property prices particularly in relation to earthquakes caused by fracking in 2011, which were highly publicised in the media:
'Fear of Fracking: The Impact of the Shale Gas Exploration on House Prices in Britain' by Steve Gibbons, Stephan Heblich, Esther Lho and Christopher
Timmins, Spatial Economics Research Centre (SERC) Discussion Paper No. 207 (http://www.spatialeconomics.ac.uk/textonly/SERC/publications/download/sercdp0207.pdf).
Going forward, the question is will this continue and have the government put enough processes and consultations in place to give the public some peace of mind that fracking sites will not negatively affect those living close by?
The Government is planning to implement measures to provide funding to communities where the fracking is taking place or where companies apply for licences, we will have to wait and see if these incentives settle people's minds and provide resources that can positively influence these communities.
The following link shows the onshore wells for shale gas and identifies the areas that licences could be granted for in the future, these are mostly in populated areas and some areas of natural beauty:
How long will it be before the full impact of fracking both on the local environment and house and land prices is really understood?
For developers, when looking to purchase land to build new homes, the points relating to potential impact on both house prices and contamination of the land purchased and the surrounding area will need to be carefully considered and may increase the associated land acquisition costs. Environmental searches on the land will show if the site is within 4km of an area that has been offered for licensing for the onshore exploration of oil and gas by the Oil and Gas Authority, and if the land is within 4km of a Well, used for energy exploration or extraction.
If these are revealed on an environmental search, the map link above can be used to identify the licensed area and/or Well and we would recommend that the expertise of an environmental consultant are obtained to advise if further environmental investigations should be undertaken. We would also advise that this information be passed to your valuer for their opinion.
For more information contact Claire Smith in our Housing & Regeneration department via email or phone on 01772 220142. Alternatively send any question through to Forbes Solicitors via our online Contact Form.