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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> INEOS UPSTREAM LIMITED AND ANOTHER, PETITION OF AND FRIENDS OF THE EARTH SCOTLAND AGAINST THE LORD ADVOCATE [2018] ScotCS CSOH_66 (19 June 2018)
URL: http://www.bailii.org/scot/cases/ScotCS/2018/[2018]_CSOH_66.html
Cite as: 2018 GWD 22-270, [2018] JPL 1211, [2018] CSOH 66, 2018 SLT 775, [2018] ScotCS CSOH_66
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OUTER HOUSE, COURT OF SESSION
[2018] CSOH 66
P1318/17
OPINION OF LORD PENTLAND
In the petition
INEOS UPSTREAM LIMITED and another
and
FRIENDS OF THE EARTH SCOTLAND
against
THE LORD ADVOCATE
Petitioners
Interveners
Respondent
Petitioners: Moynihan QC, McBrearty QC; Burnet; DLA Piper Scotland LLP
Interveners: Balfour + Manson LLP
Respondent: Mure QC, A Sutherland; Scottish Government Legal Directorate
19 June 2018
Introduction
[1] In this petition, which came before me for a substantive hearing, Ineos Upstream
Limited and Reach Coal Seam Gas Limited seek judicial review of certain acts and decisions
of the Scottish Government in relation to unconventional oil and gas (“UOG”) in Scotland.
The basis of the petitioners’ case is that in 2017 the Scottish Government unlawfully imposed
an indefinite ban on the method of oil and gas extraction known as hydraulic fracturing or
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“fracking”. The Lord Advocate maintains that, on a correct understanding of its acts and
decisions, the Scottish Government did not impose any such ban. He contends that since
there is no ban the petitioners have no case; the petition for judicial review is based on a
series of fundamental misunderstandings of the Scottish Government’s position and should
accordingly be refused.
Fracking
[2] To set the scene I will briefly explain what is involved in the process known as
hydraulic fracturing or fracking. Fracking is a drilling technique used to fracture rocks in
order to release the oil and gas contained in those rocks. It is most frequently employed to
extract oil and gas from shale. Shale deposits are mainly found at depths greater than
1 kilometre; in Scotland they are usually located at depths of between 1 and 3 kilometres.
There are a number of shale deposits in Scotland, most notably across an area of the Central
Belt known as the Midland Valley. In 2014 the British Geological Survey published an
analysis of the potential shale resources in the United Kingdom. They estimated that the
Midland Valley holds between 49.4 and 134.6 trillion cubic feet of shale gas. Only a
relatively small proportion of these resources are likely to be commercially viable for
development or production. Exploratory work would be required so as to understand more
fully how much oil and gas could be economically and technically recovered.
[3] The oil and gas industry use a range of techniques to extract oil and gas from
underground reserves. What are referred to as conventional oil and gas reserves can be
exploited by drilling a well, allowing the oil or gas to flow out under its own pressure.
Conventional deposits of oil and gas are contained in porous rocks with interconnected
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spaces, such as limestone and sandstone. These interconnected spaces give rise to
permeability which allows the oil or gas to flow effectively through the reservoir to the well.
[4] By contrast, unconventional oil and gas deposits are contained in impermeable rocks,
such as shale or coal deposits. In these cases, the oil or gas cannot easily flow through the
reservoir. In order to extract such oil and gases, techniques such as hydraulic fracturing are
used. As I have explained, fracking is used to fracture rocks to release the oil and gas
contained in them. The rock is fractured by injecting pressurised fluids into the rock to prise
open small spaces in the rocks, which release the oil or gas.
[5] Water is injected into the shale at high pressure to create, or enlarge, existing tiny
fractures in the rock; these may only be a few fractions of a millimetre in width. The
injected water contains proportions of sand (around 5%) to help hold open the fractures.
Chemicals are also used (less than 1%) to reduce friction and protect the drilling equipment
from corrosion, and to remove accumulations of micro-organisms and mud from the drilling
equipment.
[6] Coal bed methane is also considered to be an unconventional source of gas. This is
because the gas is present in the coal rather than being held in pore spaces. To extract the
gas, water is drained from the coal seam to release pressure; this is known as de-watering.
Depending on local geological conditions, this may be carried out with or without hydraulic
fracturing.
[7] The future of unconventional oil and gas in Scotland has proved to be a highly
controversial subject. It has given rise to intense debate. Views for and against it are
strongly held on all sides of the debate. In this case the court is not at all concerned with
these questions; they raise sensitive issues of environmental, economic, and social policy.
The court is concerned only with the legal question of whether, as the petitioners allege, the
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Scottish Government has acted in excess of the powers conferred on it by imposing an
outright ban on fracking. In a written intervention Friends of the Earth Scotland submitted
that the Scottish Government had acted lawfully in imposing a ban on UOG development in
Scotland. The intervention was prepared on the basis that an effective ban had been put in
place. As I have explained, the position of the Scottish Government is that no effective ban
has been imposed. The intervention did not seek to engage with that issue, which is the real
issue in the present case. In the circumstances, I need say no more about the intervention.
Oil and gas licensing
[8] In the United Kingdom the right to search, bore for and extract petroleum, including
oil and gas, is vested in the Crown. Petroleum exploration and development licences
(“PEDLs”) may be granted, at ministers’ discretion, under the Petroleum Act 1998 (“the
1998 Act”). On 9 February 2018, pursuant to sections 47 and 48 of the Scotland Act 2016,
responsibility for onshore petroleum licensing within the Scottish onshore area was
devolved to the Scottish Ministers. A licence is granted to promote the exploitation of a
national resource in the national interest. Consequently, it imposes positive obligations on
the operator to progress work; operators are not entitled to ‘bank’ licenses as assets and to
fail to make progress. On the other hand, in view of the scale of investment the government
has only limited rights of revocation.
[9] It is important to appreciate that a PEDL does not give permission for operations; it
merely grants exclusivity to licensees in relation to hydrocarbon exploration and extraction
within a defined area. At each stage, the license holder will have to obtain not only a
ministerial consent required under the terms and conditions of the PEDL, but also
permissions and regulatory consents from land owners and a range of public authorities,
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including the Scottish Environmental Protection Agency (“SEPA”), the Health and Safety
Executive (“HSE”), the Coal Authority, Scottish Natural Heritage (“SNH”), and local
planning authorities. None of these consents and permissions is provided for in, or
guaranteed by, the grant of a PEDL. A PEDL grants exclusive rights in relation to the
exploration and development of all types of conventional and unconventional oil and gas
including tight gas, coalbed methane, mine vent gas, oil shale and shale gas. In order to
carry out UOG extraction in Scotland, in addition to a PEDL, the petitioners would require
to obtain inter alia planning permission under the regime in the Town and Country Planning
(Scotland) Act 1997 as amended (“the 1997 Act”) and related legislation, and authorisation
by SEPA under the Water Environment (Controlled Activities) (Scotland) Regulations 2011
(“the 2011 regulations”).
[10] In the recent case of R (Dean) v Secretary of State for Business, Energy and Industrial
Strategy [2017] 4 WLR 158 Holgate J discussed the nature of PEDLs and the applicable
statutory and regulatory frameworks. He drew attention to a number of features of the
licensing regime. For present purposes, it is of interest to note the following:
1. The activities licensed by a PEDL are intrinsically risky. The risks include
completely unforeseen and sometimes unforeseeable changes in circumstances.
2. Although they are “statutory licenses”, PEDLs are contractual in nature, the
obligations resting principally on the licensee.
3. Following the grant of a PEDL, the licensee is subject to a comprehensive system
of regulation under other legislation to address potential environmental and
safety issues. Obtaining consent under the license to proceed is subject to those
regulatory approvals having been obtained.
4. PEDLs are highly prospective, with no guarantee of commercial viability.
5. License holders are required to pay an escalating annual rental to the
government, designed to ensure that once a license is awarded, work proceeds in
a manner most likely to establish whether a viable oil or gas field exists and can
be developed.
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6. Variations to the terms of PEDLs, including the extension of the terms, are
considered by the licensing authority in the light of all relevant factors.
7. A PEDL is essential for a licensee not only to be able to search for and extract oil
and gas, but also to obtain the right to own the product so as to be able to sell it to
third parties. These are private law rights which are essential to an operator for
the conduct of its business. The grant of a license is essentially a property
transaction, akin to a mining licence or a mining lease.
The petitioners’ interests
[11] The first petitioners hold interests in and are the operators of PEDLs 133 and 162,
which cover defined onshore areas in Scotland. They hold 100% of the interest in PEDL 133,
and 80% of the interest in PEDL 162. The second petitioners own the remaining 20% of
PEDL 162. The petitioners aver that the second petitioners are a Scottish company which
(either itself or through associated companies) has been involved in UOG development since
about 2007; its term as licensee under PEDL 162 commenced on 1 July 2008. The first
petitioners initially acquired interests in PEDLs 133 and 162 in 2014. They also acquired the
interest in planning applications submitted for a site at Letham Moss, a small former mining
village near Falkirk, and at Powdrake Road, near Airth, Plean, in respect of coal bed
methane production; the relative sites are in the area covered by PEDL 133. The Scottish
Ministers appointed reporters to determine these planning applications in June 2013; there
was a three-week public inquiry in March and April 2014. No determination has yet been
issued. The petitioners aver that they have both made multi-million-pound investments in
Scotland in relation to UOG.
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Planning law and policy
[12] It will now assist if I summarise the main features of the relevant planning
framework, including consideration of (i) the applicable rules, policies, and practices of the
Scottish planning system, and (ii) the policy framework in place in 2014.
[13] As is well-known, Scotland has a plan-led system for land use (City of Edinburgh
at 35G-36G; and Lord Clyde at 42G-45B). Section 37(2) of the 1997 Act provides inter alia
that:
“In dealing with … an application (sc. for planning permission) the authority shall
have regard to the provisions of the development plan, so far as material to the
application, and to any other material considerations.”
[14] This applies equally where the determination is to be made by the Scottish Ministers
on a called-in application under section 46 of the 1997 Act. The ministers’ discretion in
respect of planning applications is a broad one; the exercise of weighing up the material
considerations and the development plan is a matter of planning judgment for the decision
maker. The weight to be attached to a relevant consideration is also entirely for the decision
maker, provided that he or she does not act unreasonably in a Wednesbury sense.
[15] In terms of section 25 of the 1997 Act, where in making any determination under the
1997 Act regard is to be had to the development plan, the determination is to be made in
accordance with the development plan unless material considerations indicate otherwise. It
may be said that in this sense a degree of priority is afforded to the development plan. It is
not, however, the law that greater weight is to be attached to the policies of the development
plan than to other considerations; other policy may overtake and supersede development
plan policies (see R (West Berkshire DC) v Secretary of State for Communities and Local
Government [2016] PTSR 982 per Laws and Treacy LJJ at paragraph 20).
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[16] In terms of section 3A of the 1997 Act, Scottish Ministers are obliged to prepare,
publish, and keep under review a spatial plan for Scotland known as the National Planning
Framework (“NPF”). The current NPF (“NPF3”) was published in June 2014. It represents
the Scottish Government’s spatial expression of its economic strategy and plans for
development and investment in infrastructure. In particular, it sets out the Scottish
Government’s vision for achieving (i) a successful, sustainable place, (ii) a low carbon place,
(iii) a natural, resilient place and (iv) a connected place (NPF3 paragraph 1.2).
[17] In terms of sections 8(1) and 16(2) of the 1997 Act, when preparing strategic
development plans and local development plans, the relevant authorities are to “take into
account the National Planning Framework”, along with any information and considerations
prescribed for that purpose, and such other information and considerations as appear to
them to be relevant. NPF3 is not itself part of the development plan and applications do not
have to be determined in accordance with its terms. It is, however, a material consideration
in the determination of applications.
[18] In June 2014, the Scottish Government published Scottish Planning Policy 2014
(“SPP2014”). SPP2014 is part of the Scottish Government’s national planning policy. It is a
material consideration in the determination of applications for planning permission. It sits
alongside NPF3 with other non-statutory planning policy documents including (i) Creating
Places (2013), (ii) Designing Streets (2010) and (iii) various planning circulars. It sets out the
Scottish Government’s national planning policies for achieving its vision, which includes
(i) supporting the aim of NPF3 to reduce greenhouse gas emissions and facilitate adaptation
to climate change, and (ii) achieving the target set in the Climate Change (Scotland) Act 2009
of reducing greenhouse gas emissions by at least 80% by 2050, with an interim target of
reducing emissions by at least 42% by 2020. It expressly states as a policy principle that the
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planning system should support the transformational change to a low carbon economy
(paragraph 154).
[19] Ministers’ powers to formulate and adopt national planning policy (including
SPP2014 and other non-statutory policies) derive, expressly or by implication, from the
planning Acts; these give them overall responsibility for oversight of the planning system
(Hopkins Homes Limited v Secretary of State for Communities and Local Government and
another [2017] PTSR 623 per Lord Carnwath JSC at paragraphs 19-21). Planning policy is
“not a rule but a guide” (West Berkshire, supra per Laws and Treacy LJJ at paragraph 19).
Ministers are entitled to express their view as to the weight to be given to their policies but
cannot “lay down the law” about them (West Berkshire, supra per Laws and Treacy LJJ at
paragraph 23). As with SPP2014 and the equivalent NPPF in England and Wales,
non-statutory policies such as the Scottish Energy Strategy are material considerations in the
determination of applications for planning permission. Prospective changes to policy, such
as the ministers’ emerging policy position on UOG, can also be material considerations (Cala
Homes (South) Limited v Secretary of State for Communities and Local Government [2011] 1 P &
CR 22 451 per Lindblom J at paragraphs 49-52). Ministers’ policy making powers are not
therefore restricted to NPF and SPP.
[20] NPF3 and SPP2014 include specific policies on mineral extraction and UOG. NPF3
states at paragraph 4.26:
“Reserves of coal bed methane in the Scottish midland valley (Central Belt) could
contribute to secure energy supplies in the medium term but will require careful
planning to avoid negative environmental and community impacts from extraction
activities. A framework for this is set out in the Scottish Planning Policy.”
[21] The policies contained in SPP2014 for promoting the responsible extraction of
indigenous coal, oil and gas aimed to minimise impacts on the environment, local
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communities, and the built and natural heritage. Paragraphs 245 and 246 set out specific
matters which should be taken into account in relation to proposals for shale gas and coal
bed methane extraction and hydraulic fracturing. This approach represented a significant
tightening of policy when compared to SPP2010. In an affidavit lodged in the present
proceedings, Mr John McNairney, chief planner in the Scottish Government, explained that
by 2016 planning policy applied a risk assessment approach towards UOG with the
intention of establishing buffer zones to protect sensitive receptors from unacceptable risks.
If there was an inadequate buffer, permission was to be refused. Paragraph 245 of SPP2014
provided that when considering applications planning authorities and statutory consultees
must assess the buffer zone distances proposed; where these were considered to be
inadequate the policy stated that the Scottish Government expected planning permission to
be refused. Mr McNairney referred to a statement made by the then planning minister,
Mr Derek Mackay MSP, to the Scottish Parliament on 19 February 2014, in which he stated
that the Government had made clear its direction of travel on UOG; it expected robust
understanding of impacts on the environment before consent could be given.
[22] The Scottish Government’s policy position on UOG at the time NPF3 and SPP2014
were adopted in June 2014 requires to be understood in light of the fact that in
September 2013 it had convened an independent expert scientific panel to report on the
scientific evidence relating to UOG. The remit of the independent panel was inter alia to
deliver a “robust, well-researched evidence base relating to unconventional oil and gas upon
which the Scottish Government can reliably base future policy in this area”. The panel
published its report in July 2014 after the adoption of NPF3 and SPP2014.
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The 2015 Directions
[23] On 28 January 2015 the Scottish energy minister, Mr Fergus Ewing MSP, made a
statement to the Scottish Parliament on UOG to the effect that there was to be work on
planning and environmental regulation, a health impact assessment, and a consultation
process on UOG. He stated that given the importance of this work it would be
inappropriate to allow any planning consents in the meantime. He therefore announced
what he described as a moratorium on the granting of planning consents for all UOG
developments, including fracking. The moratorium was to continue until such time as the
work referred to had been completed. The minister stated that a direction would be sent to
all Scottish planning authorities to give immediate effect to that policy. A similar direction
would be issued to SEPA.
[24] Following this announcement, the Scottish Ministers issued, under powers vested in
them by regulations 31 and 32 of the Town and Country Planning (Development
Management Procedure) (Scotland) Regulations 2013, planning directions requiring local
planning authorities to intimate the receipt of planning applications for any UOG
developments to them; the directions were originally issued in January 2015 and revised in
October of that year. The direction issued on 8 October 2015 was the Town and Country
Planning (Notification of Applications) (Unconventional Oil and Gas) (Scotland) (Number 2)
Direction 2015 (“the 2015 Planning Direction”). The definition of “unconventional oil or gas
development” for the purposes of the 2015 Planning Direction excludes the drilling of
boreholes solely for the purpose of core sampling. Subject to that exclusion, planning
authorities must notify the Scottish Ministers of applications for UOG development; and
they are prohibited from granting planning permission within 28 days of notification to
Ministers. The purpose of the direction is to allow ministers to consider whether to exercise
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their power to call in the application for determination by them. The ministers also made
directions in January and October 2015 under the Water Environment (Controlled Activities)
(Scotland) Regulations 2011. The 2011 regulations apply to any “controlled activity” as
defined in regulation 3(1); this extends to activities liable to cause pollution of the water
environment. The Water Environment (Controlled Activities) (Unconventional Oil and Gas
Development) (Scotland) (No. 2) Direction 2015 (“the 2015 SEPA Direction”) requires SEPA
to refer for ministerial determination any application for authorisation to carry on any
controlled activity in connection with UOG development, subject to the same exclusion as in
the case of the 2015 Planning Direction. The 2015 Planning Direction and the 2015 SEPA
Direction gave legal effect to the moratorium. The power of the Scottish Government to call
in planning applications for determination by them, coupled with the 2015 Planning
Direction and the 2015 SEPA Direction gives Scottish Ministers the means to control two of
the essential legal requirements for onshore extraction of UOG. By refusing planning
permission or authorisation of controlled activities under the 2011 regulations, the Scottish
Government could prevent onshore UOG development extending beyond drilling of core
samples. To date, the notification requirements under the 2015 Planning Direction have not
been triggered. No application has been remitted to ministers by SEPA under the
2015 SEPA Direction.
[25] On 6 February 2015 the Directorate for Planning and Environmental Appeals
(“DPEA”) advised parties to the Letham Moss planning appeals that in view of the
ministerial statement made on 28 January 2015 the reporters proposed to suspend work on
their report to ministers and that the appeals would be sisted to await the outcome of the
research and consultation announced by the Scottish Government. On 12 October 2015 the
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reporters published a notice on the DPEA website intimating that their work on the appeals
had been suspended and that the appeals had been sisted.
Further research and public consultation
[26] In late 2015 and 2016 the Scottish Government commissioned a series of reports and
research projects from a range of experts. The purpose of these strands of work was to
address a number of gaps in the evidence identified by the independent expert scientific
panel which had reported in July 2014. Reports were obtained on economic impacts and
scenario development (from KPMG), on climate change impacts (from the committee on
climate change), on understanding and monitoring induced seismic activity (from the British
Geological Survey), on transport issues (from Ricardo), on decommissioning, site restoration
and aftercare (from AECOM), and on the health impact of UOG (from Health Protection
Scotland). The research reports were published in full on 8 November 2016.
[27] In January 2017 the Scottish Government launched a public consultation exercise by
publishing a consultation document entitled: “Talking Fracking - a consultation on
unconventional oil and gas”. In the foreword the minister for business, innovation and
energy, Mr Paul Wheelhouse MSP, explained that once the consultation had closed and the
responses had been independently analysed, the Government would consider the full range
of evidence, and make its recommendation. He said that the Government would then ask
the Scottish Parliament to vote on the recommendation, and the Government would come to
what he described as a final decision by the end of 2017 on whether or not UOG has a role in
Scotland’s energy mix. The consultation period lasted 4 months. There were 60,535 valid
responses to the consultation. About 99% of the responses were opposed to fracking.
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The ministerial statement of 3 October 2017
[28] On 3 October 2017 Mr Wheelhouse made a statement on UOG to the Scottish
Parliament. The minister opened by stating that the Scottish Government had consistently
taken a cautious, evidence-led approach to considering the potential exploration of UOG in
Scotland. He said that he wished to set out the Government’s “preferred position on the
future of unconventional oil and gas in Scotland which is based on the findings of our
consultation and the extensive evidence we have collated.” The minister went on to explain
that the preferred position would be the subject of a full parliamentary debate and vote after
the recess. He then said that, in line with the Government’s statutory responsibilities, a
strategic environmental assessment would be commissioned following the parliamentary
vote to assess the impact of the Scottish Government’s position “prior to its finalisation.”
[29] Mr Wheelhouse continued by setting out the findings of the public consultation. He
stated that reaching a “decision” on UOG had been the culmination of a period of careful
and comprehensive evidence gathering. He said that the Government had not taken the
process or the decision lightly. He then proceeded to review the research findings. Having
dealt with the findings of the research and with the outcome of the process of public
engagement, the minister said this:
“Taking all that into account, and balancing the interests of the environment, our
economy, public health and public opinion, I can confirm that the conclusion of the
Scottish Government is that we will not support the development of unconventional
oil and gas in Scotland.
To put that position into immediate effect, we have today written to local authorities
across Scotland to make it clear that the directions that give effect to the moratorium
will remain in place indefinitely. That action means that we will use planning
powers to ensure that any unconventional oil and gas applications are considered in
line with our position of not supporting unconventional oil and gas.
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Let me be clear: that action is sufficient to effectively ban the development of
unconventional oil and gas extraction in Scotland. The decision that I am
announcing means that fracking cannot and will not take place in Scotland.
My comments relate to the use of planning powers. …”
[30] The minister referred to the fact that the transfer of licensing powers from
Westminster to Holyrood had been expected to occur in February 2017 but had yet to be
progressed by the UK Government. He explained that he had written to the Secretary of
State for Business, Energy and Industrial Strategy in the UK Government to set out the
Scottish Government’s position on the future of UOG in Scotland and to seek assurances
that the proposed devolution of licensing powers would not be affected by Brexit.
Mr Wheelhouse continued as follows:
“Although that is important, I want to make it crystal clear that using our planning
powers in the way that I have set out allows us to deliver our position, no matter
what Westminster decides. I am aware that there is a proposal for a Member's Bill on
this issue from Claudia Beamish. However, the use of planning powers is an
effective and much quicker way to deliver our policy objective, as with our actions
on nuclear power stations. Legislation is therefore not necessary.”
[31] It is convenient to explain at this point that on 1 June 2016 there had been a vote in
the Scottish Parliament on an amendment to the Environment, Climate Change and Land
Reform Bill moved by Claudia Beamish MSP. The amendment sought an outright ban on
fracking. It was passed, in a non-binding vote, by 32 votes to 29 with the Scottish National
Party having abstained.
[32] Towards the end of his statement on 3 October 2017 the minister said the following:
“Taking full account of both the available evidence and the strength of public
opinion, my judgment is that Scotland should say ‘no’ to fracking. That position will
be reflected in our finalised energy strategy, which we will publish in December.
The next step in this process will be for the Scottish Government to lodge a motion
for debate, to allow the Parliament to vote on whether to support our carefully
considered and robust position on unconventional oil and gas.”
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[33] In the debate following the minister’s statement Claudia Beamish welcomed the
indefinite extension of the moratorium, but she observed that this was not “as strong as a
full legal ban” and could be overturned at any point “on the whim of a future minister”. In
response, Mr Wheelhouse stated that the Government had put in place through the
measures he had outlined “an effective immediate ban on unconventional oil and gas
extraction activities in Scotland”.
[34] At a later stage in the parliamentary debate, Mark Ruskell MSP said that “we do not
have a ban in front of us”. He asked the minister when the Government would introduce a
permanent ban by using Scottish planning policy, environmental regulations, and licensing
powers. In reply, the minister said that he was taken aback because he did not think that
Mr Ruskell had listened to what he had said in his statement. The minister added this:
“Using planning policy, we have put in place an immediate ban on unconventional
oil and gas extraction activities in Scotland… We believe that the position is robust…
I give reassurance – I tried to make it crystal clear in my statement – that there is, in
effect, a ban on unconventional oil and gas activities in Scotland.”
Events after the ministerial statement
[35] On 3 October 2017 Mr McNairney wrote to the heads of planning at all Scottish local
authorities (“the 2017 letter”). He drew their attention to the announcement that, on the
basis of the available evidence, the Scottish Government did not support the development of
UOG in Scotland. The letter advised that the Government would continue to use planning
powers to give effect to this policy. The 2015 Planning Direction which gave effect to the
moratorium on UOG would continue to remain in force. The notification arrangements
would be on the same basis as set out in the original planning direction issued on 28 January
2015. Mr McNairney’s letter also stated that as required under the Environmental
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Assessment (Scotland) Act 2005 (“the 2005 Act”), the Scottish Government would shortly
commission a strategic environmental assessment of its preferred position on UOG.
[36] On 5 October 2017, at First Minister’s question time, Mr Ruskell observed that there
was concern that the ban was not yet legally watertight “as it merely extended a temporary
brake on planning decisions”. He asked the First Minister if she would “get the ban
properly over the line by putting it on the same footing as the ban on new nuclear power
stations, and whether she would commit to using the licensing powers when they arrived”.
In reply to Mr Ruskell’s question, the First Minister said this:
“The ban on new nuclear energy in Scotland is done through planning powers and
that is exactly what we are proposing for the ban on fracking. Let me be clear,
because to some ears, it will sound as if some members are dancing on the head of a
pin: fracking is being banned in Scotland – end of story. There will be no fracking in
Scotland, and that position could not be clearer.
… What Paul Wheelhouse outlined to the chamber earlier this week is an effective
way of banning fracking and … is the quickest way of banning fracking. Instead of
continuing to have this abstract argument, those who, like me, do not believe that
fracking should go ahead in Scotland should welcome the fact that fracking in
Scotland is banned.”
[37] On 24 October 2017 the promised debate on UOG took place in the Scottish
Parliament. In opening the debate Mr Wheelhouse said that the Scottish Government was
honouring the commitment it had previously given to allow the Parliament an opportunity
to “endorse our carefully considered and robust position on unconventional oil and gas.”
Mr Wheelhouse went on to explain that in coming to their position he had sought legal
advice and considered precedents, including the Government’s position on not supporting
new nuclear power stations or underground coal gasification. The minister then said this:
“The approach that we have adopted, using our fully developed planning powers, is
to set out a robust and effective ban, using planning policy. Our approach ensures
that decisions on onshore unconventional oil and gas developments will be made in
line with planning policy and procedure, and within the framework of Scottish
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Government policy – policy that does not support unconventional oil and gas
extraction in Scotland.
…
After this debate, we will issue a written policy statement on our position on
unconventional oil and gas. That will support the preparation of a strategic
environmental assessment, which I propose will commence shortly and conclude in
summer 2018. We will then set out our finalised position, which will be reflected in
future iterations of Scotland’s energy strategy.”
Mr Wheelhouse moved a motion in the following terms:
“That the Parliament agrees with the Scottish Government’s position of not
supporting the development of unconventional oil and gas in Scotland; endorses the
government’s decision to introduce an immediate and effective ban on onshore
unconventional oil and gas developments using its devolved powers, in line with the
Scottish Ministers’ statutory responsibilities, and notes that this position will be
subject to a strategic environmental assessment before being finalised.”
An amended motion was passed endorsing the Government’s decision to introduce an
immediate and effective ban on UOG and noting that this position would be subject to a
strategic environmental assessment before being finalised.
[38] On 8 November 2017 DPEA sought parties’ views on further procedure in the
Letham Moss planning appeals in light of the ministerial announcement made on 3 October
and the motion passed in Parliament. By email sent on 29 November 2017 DLA Piper, the
petitioners’ solicitors, advised DPEA that the petitioners were still considering the
implications of the Scottish Government’s revised policy announcement on their clients’
position. The email stated that if the appellants decided to insist on the reporters’
recommendations being submitted to Scottish Ministers (as to which no decision had yet
been made), it would be expected that the ministers would attach overriding weight to their
new “no support” planning policy and refuse the appeals, regardless of the reporters’
recommendation. The issue for the reporters, according to DLA Piper, would be whether as
a matter of law, the Scottish Ministers’ new policy was a relevant material consideration
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which the reporters would be required to take into account and, if it was such a
consideration, what weight (if any) should be attached to that policy “in circumstances
where it has still to be taken through a strategic environmental appraisal and adopted into
the next iteration of SPP.”
[39] On 7 December 2017 the Scottish Government published a position statement on
UOG. It summarised the investigations and research that had been carried out and referred
to the ministerial statement made on 3 October 2017. The position statement explained that
any policy decision that had potential for significant environmental effects had to be subject
to a strategic environmental assessment prior to its finalisation; this was required under the
2005 Act. The position statement said that it was anticipated that this assessment work
would commence in the summer of 2018, after which the policy on UOG would be finalised.
The statement explained that on the basis of the research it had commissioned the Scottish
Government did not support the development of UOG in Scotland. The Government would
embed its position on UOG in the next iteration of the National Planning Framework which
was expected in 2020 “thereby giving an assurance (that) the policy would carry significant
weight in development planning …”.
[40] On 13 December 2017 DLA Piper wrote again to DPEA by email. They explained
that they were seeking the opinion of senior counsel on the legal implications of the
ministerial announcement of 3 October 2017. Without prejudice to their clients’ final
position, they expressed the view that ministers would presumably attach significant weight
to their new policy of no support and refuse the appeals.
[41] On 20 December 2017 the Government published the Scottish Energy Strategy. This
stated that the Government’s preferred policy position would be subject to a strategic
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environmental assessment. It explained also that, once finalised, the policy on UOG in
Scotland would be reflected in the next iteration of the National Planning Framework.
[42] On 28 December 2017 the petitioners raised the present proceedings.
[43] The UK Government has waived the PEDL annual rental fees for PEDLs 133 and 162
payable in June 2016 and July 2017.
Is there a legal ban on fracking?
[44] It is true, as Mr Moynihan QC highlighted on behalf of the petitioners, that ministers
in the Scottish Government repeatedly stated to the Scottish Parliament that they had
introduced an effective and robust ban on fracking in Scotland and that they had done so by
means of the powers given to them (expressly or by implication) under planning legislation;
what they referred to as their “planning powers”. These statements (whilst they are
admissible in the context of judicial review of executive action: see for example, Toussaint v
A.G. of St Vincent & the Grenadines [2007] 1 WLR 2825) are not, however, determinative of the
legal issue that the court must address in the present petition. The legal question is not
whether ministers have accurately described or commented on their understanding of the
legal effect of the various steps they have taken or authorised to be taken under the planning
system, but the fundamentally different question of what the legal effect of those steps really
is. The latter question is one of law for the court to decide, on the basis of an objective and
independent legal analysis of the nature and effect of the Scottish Government’s acts and
decisions.
[45] In carrying out this legal analysis it is important to identify what the relevant acts
and decisions of the Scottish Government actually are in the present context. In my view
they are: (a) the decision to announce a “preferred policy position” to the effect that the
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Scottish Government will not support the development of UOG in Scotland; and (b) the
decision that the 2015 Directions should continue in force indefinitely. These are the two
decisions that are at the heart of the Scottish Government’s stance on fracking as matters
currently stand.
[46] What then is the legal effect of these two decisions?
The preferred policy position
[47] As far as the preferred policy position is concerned, a number of points seem to me
to be important. First, the evidence shows that the policy position announced so far has
never been intended to be a final policy; that was made clear by the minister in the
statement he made to the Scottish Parliament on 3 October 2017 - he explained that statute
(the 2005 Act) required that a strategic environmental assessment had to be carried out
before the policy could be finalised. The fact that the policy position was expressed as being
a “preferred” one shows that the Scottish Government understood, in my view correctly,
that unless and until the strategic environmental assessment was completed, a policy on
UOG could not lawfully be finalised and adopted. I shall come back to consider the
2005 Act in more detail later. I note that the position statement in turn made clear that there
required to be a strategic environmental assessment before the policy could be finalised.
[48] Second, I reject Mr Moynihan’s submission that in understanding the intended effect
of the policy no account should be taken of the position statement published by the Scottish
Government on 7 December 2017. That seems to me to be an artificial and unrealistic
approach, particularly in view of the fact that the minister explained to the Parliament
during the debate on 24 October 2017 that the Scottish Government would issue a written
policy statement setting out its position. In the circumstances, I consider that regard must be
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had to the position statement when it comes to considering the true meaning and effect of
the Scottish Government’s stance. It is notable that the petitioners do not attack the position
statement in the present proceedings.
[49] Third, when one looks at the various ways in which the policy (or more accurately
the emerging policy) has been expressed, it seems to me that what it amounts to is a
statement by the Scottish Government that it does not support the development or
extraction of UOG in Scotland. Nothing else that ministers have said about the effect of the
policy amounts to a formulation or articulation of the policy, but rather to commentary on it.
Such commentary does not, in my opinion, affect the meaning of the emerging policy. The
meaning of the emerging policy is a question of construction for the court; the opinions of
ministers or MSPs on that issue or on the import or merits of the policy are irrelevant to that
of Appeal at paragraph 20). So, for example, when Mr Wheelhouse said on 3 October 2017
that the Government’s actions were sufficient to effectively ban the development of UOG in
Scotland he was referring back to the two decisions I have identified: (a) the announcement
of the preferred position and (b) the decision to maintain the 2015 Directions in place
indefinitely. He was expressing his and the Government’s then view as to the effect of those
steps. The First Minister was engaged in essentially the same exercise when she answered
Mr Ruskell’s question on 5 October 2017.
[50] So, the ministerial comments reflecting the opinion that there was an effective ban on
fracking are (a) irrelevant to the legal question before the court; (b) not binding on the court;
(c) in any event, not determinative of the question of construction that the court has to
address; and (d) to the extent that they did not accurately express the legal effect of the
decisions taken must be left out of account when it comes to answering the legal question.
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[51] The other point to notice in this connection is that the emerging policy does not in
fact provide that the development or extraction of UOG in Scotland is to be prohibited. It
says something different, namely that the Scottish Government does not support such
activities. The petitioners contend that a policy of no support equates to an outright ban or
that, in any event, the policy of no support was ambiguous and should therefore be
construed compatibly with the ministerial commentary on it. In my opinion, the emerging
policy is not ambiguous. It means what it says: the Scottish Government does not support
fracking. It does not mean that any planning or other application for consent to carry on
such activity must be refused as a matter of law. It conspicuously does not stipulate that the
Scottish Government has banned fracking. This is not a technical or legalistic distinction.
The policy reflects the Scottish Government’s provisional evaluation of the position as at
October 2017 based on the outcome of their public consultation and the other evidence
available to them at that time. In light of those sources of information, they stated that their
preferred position was not to support fracking; it seems to me that this provisional view
does not amount to an attempt to lay down a legally enforceable rule, applicable to all
decision makers, that fracking is henceforth prohibited.
[52] Fourth, the petitioners’ approach reflects a misconception as to what a planning
policy truly is. A policy is not a rule; it is merely a guide (see West Berkshire supra per Laws
and Treacy LJJ at paragraph 19). It is axiomatic that a decision maker (including the Scottish
ministers in the context of a called-in application) is not bound by any rule of law to follow
policy, however strongly expressed that policy may be; he or she is entitled to depart from it
in the event that the particular facts and circumstances of the application under
consideration, when they are evaluated in the light of all relevant evidence (including the
policy), justify such a course being followed. It is accordingly open to a decision maker, as
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matters currently stand, to grant planning permission and other consents needed to allow
UOG developments in Scotland to proceed, notwithstanding the government’s emerging
policy of no support for such developments.
[53] To the extent that some sections of the ministerial statements made to the Scottish
Parliament were capable of being read as suggesting that the policy would amount to a ban
on fracking, Mr Mure QC accepted on behalf of the Lord Advocate that such statements did
not accurately reflect the legal position; they were to that extent mistaken. The way
Mr Mure put it was to say that the concept of an effective ban was a gloss; it was, he said,
the language of a press statement. Mr Moynihan, for his part, urged the court to take the
view that no meant no and that ministers should be taken at their word. In my opinion the
petitioners’ argument is unsound; when the government’s policy position is properly
understood as a matter of law, ministers have not laid down an absolute and unbending ban
on fracking. The position statement correctly sets out the legal effect of the emerging policy
as follows:
“The outcome of our public consultation shows that in those communities which
would be affected, there are considerable concerns about the potential impacts and
disruption that could be caused.
It is the Scottish Government’s position that the research we have commissioned and
considered does not provide a strong enough basis from which to address those
communities’ concerns.
On this basis the Scottish Government does not support the development of
unconventional oil and gas in Scotland.
This position is implemented using the fully devolved planning powers to establish
robust and effective controls. On 03 October the Chief Planner wrote to local
authorities across Scotland to make clear that the Planning Direction of 2015 will
continue to remain in force.
This approach ensures decisions on onshore unconventional oil and gas will be made
in line with planning policy and procedure, and within the framework of Scottish
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Government policy – a policy that does not support unconventional oil and gas
extraction in Scotland.”
The final paragraph of this extract rightly explains that decisions are expected to be made
“in line with” planning policy and procedure; this is different from stipulating that the
policy must be followed in every case. The same point is made by the reference to decisions
having to be taken “within the framework” of the Scottish Government’s policy. The
position statement makes clear that the Government’s intention was for its policy to carry
significant weight in development planning and decision making; in other words, the policy
would not be determinative of planning applications. I note that this was the view put
forward by DLA Piper, on behalf of the petitioners, in their correspondence with DPEA in
the aftermath of the October 2017 ministerial statement. A policy that it does not support a
particular type of development is, I consider, a policy that central government is entitled to
adopt. It should also be recalled that the Scottish Government is entitled to articulate a
planning policy in broad, unqualified, and indeed robust terms; it need not expressly state
in the formulation of the policy that it may be subject to exceptions - after all the objective of
the policy maker is that his or her policy should be followed. When a minister articulates a
planning policy there is no legal requirement incumbent on him or her to spell out that in its
application the policy is constrained by considerations of fairness, good faith or the
obligation to take account of the facts and circumstances of the individual case (see
West Berkshire supra per Laws and Treacy LJJ at paragraphs 21, 25 and 28).
The 2015 Directions
[54] As far as the 2015 Directions are concerned, these are essentially procedural in
character. The 2015 Planning Direction requires planning authorities to notify Scottish
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Ministers of applications for UOG development; this allows central government to consider
whether to call in the applications for determination. The 2015 SEPA Direction requires
SEPA to refer for ministerial determination any application for authorisation to carry on any
controlled activity in connection with UOG development. It is clear that neither of these
directions makes provision as to the content, meaning or effect of any planning policy. They
do not create a ban on fracking. The directions were lawfully made under statutory powers.
They require to be given effect by the authorities to whom they are addressed.
[55] I conclude that neither the preferred policy position nor the 2015 Directions
introduced a prohibition against fracking in Scotland. No decision has been made on what
the final policy position of the Scottish Government will be in relation to fracking.
The 2005 Act
[56] Strategic environmental assessment (“SEA”) is regulated by the 2005 Act. The
purpose of SEA is to ensure that the competent authorities take significant environmental
effects into account when inter alia preparing and adopting plans or programmes (Walton v
Scottish Ministers 2013 SC (UKSC) 67 per Lord Reed at paragraph 11). Section 1(1) of the
2005 Act provides as follows:
“The responsible authority shall -
(a) during the preparation of a qualifying plan or programme, secure the carrying
out of an environmental assessment in relation to the plan or programme; and
(b) do so –
(i) where the plan or programme is to be submitted to a legislative procedure for
the purposes of its adoption, before its submission; or
(ii) in any other case, before its adoption.”
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[57] As I have explained, the current position is that the Scottish Government’s preferred
policy of no support for fracking has not been finalised; it remains under preparation and
subject to further consultation and evaluation. There was no dispute between the parties
that a new planning policy on UOG development would be a “qualifying plan or
programme” for the purposes of the 2005 Act. Mr Moynihan submitted that “adoption” in
section 1(1)(b)(ii) meant “brought into effect”. Since a new planning policy banning fracking
had, he said, been brought into effect without a SEA having been carried out, there had been
a breach of section 1(1) and the policy was accordingly unlawful. As I have explained, I
consider that a new planning policy banning fracking has not been made; accordingly, no
such policy has been brought into effect. The current position is that there is an emerging
planning policy, which has not been finalised; the emerging policy does not ban fracking.
[58] In addressing the petitioners’ submission, it is important also to note that the
2005 Act provides for a process to be followed through in the course of preparation of a
qualifying plan or programme. The cornerstone of the process for carrying out a SEA is the
preparation and publication of an environmental report. Section 14(2) of the 2005 Act
provides:
“The report shall identify, describe and evaluate the likely significant effects on
the environment of implementing-
(a) the plan or programme; and
(b) reasonable alternatives to the plan or programme,
taking into account the objectives and the geographical scope of the plan or
programme.”
Thus, in order to prepare an environmental report, it is necessary first to have a proposed
plan or programme. In the present case, I consider that the only sensible approach which is
consistent with the scheme and purposes of the 2005 Act is to hold that the Ministers’
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preferred policy position as outlined in late 2017 constitutes the proposed plan or
programme. I note also that in terms of section 15(1) of the 2005 Act, before deciding on the
scope and detail of the information to be included in the environmental report, and the
consultation period, the responsible authority must send to consultation authorities, such as
SEPA and SNH, such sufficient details of the qualifying plan or programme as will enable
the consultation authority to form a view on those matters. Again, this shows that it is
necessary to have a clear plan or programme in mind in order to submit it to the SEA
process. Finally, under section 16 the responsible authority must: (a) provide consultation
authorities with a copy of the environmental report and the qualifying plan or programme
to which it relates; (b) publicise those documents; and (c) thereafter consult for a period “of
such length as will ensure that those to whom the invitation is extended are given an early
and effective opportunity to express their opinion on the relevant documents”. Again, it
would seem that the consultation process can only work if there is a proposed plan or
programme on which meaningful consultation can take place.
[59] It follows from this analysis that, as matters presently stand, there is a preferred
policy position which is to be regarded as a proposed plan or programme; that is what will
now go forward to the stage of a SEA. This will allow for a fully informed consultation
process based on the information assembled in the course of the expert investigations
in 2015-16; the responses to the public consultation exercise in 2017; and the direction of
travel of planning policy currently favoured by the Scottish Government. Mr Mure
submitted that all this would be consistent with the objective of the 2005 Act and the EU
Directive which it implements. It seems to me that this analysis is correct. It is worth noting
that Article 1 of Directive 2001/42/EC provides that its objective is to provide for a high level
of protection of the environment and to contribute to the integration of environmental
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considerations into the preparation and adoption of plans and programmes by ensuring that
an environmental assessment is carried out of certain plans and programmes which are
likely to have significant effects on the environment. In my opinion, the process now
underway will achieve this objective. I note that the consultation on the environmental
report is expected to begin in July 2018 and to last for 8 weeks; it will consider reasonable
alternatives. In accordance with the Scottish Government’s standard practice, a Business
and Regulatory Impact Assessment (“BRIA”) will be conducted at the same time.
Thereafter, when considering their final policy position, Scottish Ministers are obliged to
take account of the environmental report and every opinion expressed by the consultation
authorities and the public (section 17 of the 2005 Act). Mr Moynihan submitted that the
procedure which the Ministers proposed to follow was inconsistent with their own guidance
which states on page 11 that:
“the SEA should begin at an early stage in a plan’s preparation, as it is important that
the future consultation on the plan and the environmental report takes place when
ideas are forming and policy options are still being actively considered”.
He submitted that the policy had not only been formed, it had been applied and had had an
impact. In my view, this submission is unsound. Policy has not been formed; it is still
evolving and remains to be finalised under the SEA process.
[60] It follows that the petitioners’ challenge insofar as based on failure to comply with
the 2005 Act fails.
Other grounds of challenge
[61] Since I have held that, as a matter of law, there is no prohibition against fracking in
Scotland, the petitioners’ other grounds of challenge may be dealt with briefly; essentially,
they were all predicated on the proposition that the Scottish Government had imposed an
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effective prohibition against fracking. First, the challenge based on alleged unlawful fettering
of discretion must fail. The time for evaluating whether discretion has been fettered is at the
stage when the final policy comes to be applied in the context of determination of an
application for consent to proceed with a UOG development (West Berkshire supra per Laws
and Treacy LJJ at paragraphs 17 and 21). That point has not been reached. I can see no basis
for holding that the preferred (emerging) policy operates so as to fetter the fair and proper
determination of planning applications in accordance with the applicable statutory
framework.
[62] Second, the petitioners complain that ministers have used their statutory powers
for an improper purpose. This ground of challenge, which substantially overlaps with the
first, again depends on a ban having been put in place. Since I have concluded that there is
no ban, this line of attack cannot succeed. Moreover, I can see no merit in the contention
that the Scottish Government has misused its statutory powers. The Scottish
Government’s power to formulate and adopt national planning policy is derived, expressly
and by implication, from the 1997 Act. The emerging policy will take its place among
other local and national policies, and along with those policies will carry weight at the
point when a planning application (or application under the 2011 regulations) falls to be
determined. The position is quite different from the one that arose in Laker Airways v
Department of Trade [1977] QB 643 where guidance issued by the Secretary of State had the
purported effect of undermining the policy reflected in primary legislation.
[63] Third, there is no substance in the petitioners’ case insofar as based on breach of
legitimate expectation. It is clear that the Scottish Government’s position on UOG extraction
has been developing for a period of some years. There can be no legitimate expectation as to
the way in which broad and discretionary ministerial powers, including the power to
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formulate policy, will be exercised. The petitioners have failed to identify any statement or
assurance given by ministers that their policy on UOG would remain unaltered in the
future. On the contrary, it must have been clear to the petitioners that ministers were
reviewing their policy; indeed, all planning policies are inherently transient and liable to be
reviewed and developed. As commercial investors, the petitioners would be well aware of
this. It seems to me that the only expectation that the petitioners could legitimately claim to
have was that when planning (and other) applications came to be decided, they would be
lawfully determined in accordance with the law and policy then applicable. For these
reasons the petitioners’ complaint of breach of legitimate expectation must, I consider, be
rejected.
[64] Turning next to the petitioners’ case based on infringement of their rights under
Article 1 of the First Protocol to the European Convention on Human Rights (“A1P1”), this
too can be briefly dealt with. Mr Moynihan argued that the petitioners’ interests in the
PEDLs, including legitimate expectations of the term extensions for which they provide, and
the petitioners’ financial resources amounted to possessions for the purposes of A1P1. He
maintained that the PEDLs had been frustrated, without consideration having been given by
the Scottish Government to the financial consequences, for example in relation to
decommissioning costs; no attempt had been made to strike a fair balance he said. Mr Mure
submitted in response that in the circumstances of the present case the petitioners had no
substantive interest protected by A1P1.
[65] This aspect of the dispute again requires to be assessed on the basis that at present
there is only an emerging and unfinalized planning policy of no support for UOG extraction;
as I have explained, this does not amount to an outright ban. The petitioners’ arguments on
this branch of their case were predicated on the basis that their interests in the PEDLs would
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be of no commercial value in the event that the alleged ban on fracking remained in place.
In my opinion, it is not possible at the present time to assess what the effect of any eventual
policy on fracking may be on the petitioners’ interests in the PEDLs. The SEA and BRIA
processes are still to be followed through; clearly it would be inappropriate for the court to
attempt to prejudge what the outcome of those processes may be or to try to predict what
the terms of any final planning policy may ultimately transpire to be. The eventual terms of
the policy, its justification and aims, the impact which it will have on the holders of PEDLs
such as the petitioners, and its proportionality are all matters that are highly germane to any
argument based on A1P1. The court cannot come to any view on such issues until a final
policy has been adopted. The petitioners’ complaint of a breach of their rights under A1P1
is premature.
[66] The emerging policy is merely one consideration to which regard will be paid in the
determination of any application by the petitioners for planning (or other) consent. Since
the emerging policy does not amount to a ban, I cannot see how it interferes with any
possessory interest that the petitioners may have in their PEDLs. I did not understand
Mr Moynihan to submit that if there was no ban there was still nonetheless an interference
with the petitioners’ A1P1 rights. It should also be borne in mind that the petitioners have
never had any legitimate expectation that they would obtain all (or indeed any of) the
necessary permissions for the purposes of UOG extraction. They have not been deprived of
their interests in the PEDLs; these have not been withdrawn or revoked. There has been no
legislative change affecting the viability of the PEDLs. Such possessory interests as the
petitioners might have in the PEDLs are, in any event, highly vulnerable to the inherent
commercial risks of an industry that is constantly affected by fluctuations in market prices.
Having regard to these factors and to the substantial uncertainty that exists about the extent
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of the recoverable amount of UOG in Scotland, I am doubtful whether the petitioners’
interests in the PEDLs would qualify as possessions for the purposes of A1P1. It seems to
me that there is considerable force in the views on similar issues expressed by
Sir Christopher Bellamy QC in R (Royden) v Wirral MBC 2003 BLGR 290 at paragraph 143:
“Even assuming that a hackney carriage vehicle licence, or its value, constitutes
'property', that 'property' arises solely because of the legal regime in force in the
Wirral which restricted the number of licences in issue. It has been the case, at least
since 1985, that the restriction on the number of licences in issue in the Wirral could,
in law, be removed. It follows that anyone acquiring a licence after 1985 did so on
the implied understanding that that might occur. The 'property' in the licence was,
therefore, inherently subject to the possibility of such a change occurring. On this
view, there is no 'interference' with the property, since the possibility of 'de-
restriction' occurring was always intrinsic to the 'property' itself. This approach may
also be expressed in wider terms, with which I myself would respectfully agree,
namely that changes in the law which may affect property values, or the value of a
business, cannot normally be impugned under art 1 of the First Protocol solely on the
grounds that a change in the law has caused a diminution in value.”
[67] It is not, however, necessary for me to come to any concluded view on these and
other questions raised in the context of this branch of the case since I consider the claim
under A1P1 to be premature.
[68] Finally, the petitioners argued that the alleged ban on fracking was outside the
devolved competence of the Scottish Ministers since it related to a reserved matter, namely
“oil and gas, including - (a) the ownership of, exploration for and exploitation of deposits of
oil and natural gas” (Scotland Act 1998 Schedule 5, Part 2, Head D2(a)). This too must fail
on the ground that there is no ban. In any event, the argument seems to me to be
misconceived: town and country planning is not a reserved matter; nor is protection of the
environment. The powers exercised by ministers in relation to the emerging policy of no
support for fracking and the 2015 Directions come under these heads and are only loosely or
consequentially connected with the oil and gas reservation in the Scotland Act (see Christian
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precluded from making policy in respect of planning and environmental issues raised by, or
affecting, reserved matters in Scotland. The 2015 Directions were lawfully made under
powers given to the Scottish Ministers.
Conclusion
[69] The petition is predicated on the proposition that the Scottish Government has
introduced an unlawful prohibition against fracking in Scotland. Whilst acknowledging that
there have been a number of ministerial statements to the effect that there is an effective ban,
the Lord Advocate, on behalf of the Scottish Ministers, made it clear to the court that such
statements were mistaken and did not accurately reflect the legal position. The stance of the
Scottish Government before the court is that there is no legally enforceable prohibition. For
the reasons set out in this judgment, I consider that the Government’s legal position is
soundly based and that there is indeed no prohibition against fracking in force at the present
time. What exists at present is an emerging and unfinalized planning policy expressing no
support on the part of the Scottish Government for the development or extraction of UOG in
Scotland. The process of policy development is not yet complete; the important stages of a
strategic environmental assessment and a business and regulatory impact assessment have
still to be carried out. There is no basis on which the court should interfere with those
procedures; the petitioners will have a full opportunity to contribute to and participate in
them. I conclude that since there is no prohibition against fracking, the petitioners’ case is
unfounded; their application for judicial review of the alleged ban must accordingly fail.
[70] I shall sustain the respondents’ first and second pleas-in-law, repel the petitioners’
pleas and refuse the petition. I shall reserve all questions as to expenses.