Agenda item

            The Committee considered the undernoted report:

 

“1.0      Purpose of Report or Summary of main Issues

 

1.1       Members are advised that DfE has recently commenced consultation into an application by EHA Exploration Ltd. for Petroleum Licence PLA1/16.  DfE is simultaneously consulting on a second licence application (PLA2/16) by Tamboran Resources (UK) Limited, relating to the Lough Allen Basin and encompassing 608 km² of Fermanagh and Omagh local government district lands to the west of Upper and Lower Lough Erne.  The PLA1/16 licence application encompasses an area of approximately 1,134 km², including wards within Antrim And Newtownabbey, Armagh City, Banbridge and Craigavon, Lisburn and Castlereagh, Mid Ulster and Belfast borough and city councils.  A map illustrating the extent of the licence area, together with a list of the Belfast City Council wards included is attached as Appendix 1 to this report.  DfE has advised that an oil or gas field often lies directly below only a small area on the ground surface, and they are relatively rare and difficult to find, so having a large licence area allows the Licensee to understand the local geology more fully and increases their chances of making a discovery.

 

1.2       In commencing the consultation exercise, DfE has advised that in assessing previous Petroleum Licence applications, the Department would have consulted on the basis of an ‘intention to award’, having already obtained Ministerial approval.  In November 2018 however, and in the continuing absence of an Assembly or Minister, the Secretary of State published new guidance to government Departments entitled ‘Guidance on decision-making for Northern Ireland Departments during the period for Northern Ireland Executive formation’.  In line with this guidance, DfE has completed a Public Interest Test and concluded that it should continue all necessary preparatory work to ensure that a decision on the Petroleum Licence application can be taken as soon as possible after a Minister is appointed.

 

1.3       The objective of DfE’s current consultation is therefore to ensure that the Department has taken account of the range of opinions in preparation for making a recommendation to a future Minister as to whether or not a Petroleum Licence should be granted to the applicant.  DfE has stated that it wishes to ensure that the Department has an informed view of any issues that may have the capacity to impact on the granting of the Licence or on its terms and conditions.

 

1.4       DfE has advised that persons wishing to provide representations in respect of Petroleum Licence Application PLA1/16 must do so on, or before 5th July 2019. DfE has further advised that once the consultation has closed, the Department will consider the Petroleum Licence application, along with consultation comments received.  A recommendation on the award of the Licence and any required conditions will eventually be passed to a future Minister for consideration.

 

1.5       DfE has confirmed however, that any final decision to grant a Petroleum Licence in NI will have to await Ministerial and / or Executive approval.

 

2.0       Recommendations

 

2.1       Members are asked to:

 

·        Note the contents of this report and;

 

1.      Agree to provide consultation comments regarding the granting of the licence or on the licence’s terms and conditions ahead of the DfE deadline of 5th July 2019 and that

2.      A draft Committee consultation response is attached as Appendix 2

 

3.0       Main report

 

3.1       DfE has advised that no oil or gas has been commercially produced in Northern Ireland (NI) to date, meaning that NI is currently entirely dependent on imports to meet its oil and gas requirements.  DfE has further advised that small quantities of oil and gas have been recorded in some exploration wells in NI, meaning that certain areas remain a prospect for oil and gas in porous sandstones at depths of 1-3 km below ground level.

 

3.2       EHA Exploration Limited has recently submitted an application for a Petroleum Licence covering the area denoted within Appendix 1 to this report.  The proposed licenced area overlies part of a geological basin, the nature of the underlying geology meaning that there may be potential for oil to be present.  

 

3.3       Within NI, petroleum licences include the following three components and time scales; (i) a five-year Initial Term, during which an agreed work programme of exploration must be carried out; (ii) a five-year Second Term, during which a field development programme must be approved; and (iii) a 20-year Third Term, called the production period.

 

3.4       During the Initial Term, exploration activities are focussed on identifying a suitable drilling target. Before the end of year three though, the Licensee must decide whether they wish to proceed to the drilling of an exploration well or to relinquish the Licence. If the Licensee decides that they wish to drill an exploration well, they must enter into a contractual arrangement with the landowner for permission to use a site and obtain all the permits required to carry out the drilling operations.  If the Licensee completes their work programme to the satisfaction of the Department, they can opt to continue the Licence into the Second Term which will normally involve the drilling of additional wells and the submission of a Field Development Plan if any commercially viable discoveries are found.  If the Field Development Plan is approved by DfE and the Licensee obtains planning permission and other consents, the Licence may enter the Production Period, which includes the development of the field, the commercial production of oil and/or gas, followed by the eventual decommissioning of the production facilities at the end of the production phase.

 

3.5       Initial works to be undertaken therefore include using geochemical surveys as an initial reconnaissance tool to identify areas suitable for further detailed exploration methods.  The applicant proposes carrying out soil sampling and using updated analytical techniques to pinpoint any indicators of subsurface oil or gas.  The applicant also proposes to survey across known fracture zones, faults and significant geological boundaries.

 

3.6       Following the initial assessment, works focus on the most promising areas for follow-up geochemistry and geophysical surveys.  Both passive electromagnetic and seismic reflection methods are proposed to image the subsurface geological structures in these areas.  The objective of these surveys is to understand the structure of the rocks at depth and to identify one or more areas where oil or gas might be trapped in the sandstone reservoir rocks. If analysis of these structures results in the identification of one or more drilling targets, the applicant would inform DfE of its intention to drill one or more exploration wells.  The applicant has indicated at this stage that they would favour the use of slimhole drilling techniques to minimise the footprint and operational impact of any exploration wells.  The EHA Exploration Ltd. proposed draft work programme is as  follows:

 

3.7       Years 1 – 3 (Part I)

 

·        Analysis and modelling of existing exploration data and the results of Tellus airborne geophysics and ground geochemical surveys.

·        Reconnaissance geochemical surveys over whole Licence area.

·        Geophysical surveys;

o   Electromagnetic surveys

o   2D seismic acquisition 300 – 450 line kms

·        Further modelling and analysis of new data.

 

3.8       Years 4 – 5 (Part II)

 

·        Plan and design the exploration well(s).

·        Application to drill (planning, technical, environmental).

·        Subject to obtaining all necessary permits, drill exploration well.

·        Analyse results.

·        Plug and abandon well, restore wellsite or, if successful, complete well for possible future production.

 

3.9       A draft Committee consultation response is attached as Appendix 2 to this report for consideration.

 

3.10      Financial & Resource Implications

 

            There are no financial or resource implications at this time other than officer time to review the consultation.

 

3.11      Equality or Good Relations Implications / Rural Needs Assessment

 

            This is a request to respond to a consultation by DfE, the Good Relations and Rural Needs Assessment are not known by Council at this time.”

 

 

            During discussion, a number of Members stated that they had a number of concerns in relation to the proposals and the Committee agreed:

 

1.      that its response to the consultation would be that a Petroleum Licence not be granted, given the potential impacts on the environment and human health, concerns regarding insufficient information and analysis/evidence provided by the Department for the Economy (DfE); and

2.      that officers would amend and incorporate the Committee’s comments into the draft response ahead of the DfE’s deadline of 5th July 2019.

 

            The response, as amended, reads:

 

“Dear Sir/ Madam,

 

The People and Communities Committee has considered the matter of the Department for the Economy’s (DfE) recent consultation into Petroleum Licence Application PLA1/16 by EHA Exploration Limited at its meeting of 4th  June 2019 and would provide the following comments by way of response.

 

The Committee notes that DfE, in the presence of an Assembly and Minister, would normally have consulted on a Petroleum Licence application on the basis of an ‘intention to award’, having already obtained Ministerial approval. DfE has advised however that under current circumstances and having regard to the November 2018 Secretary of State, ‘Guidance on decision-making for Northern Ireland Departments during the period for Northern Ireland Executive formation’, the Department has completed a public interest test and concluded that the Department should continue all necessary preparatory works to ensure that a decision on this Petroleum Licence application can be taken as soon as possible after a Minister is appointed.

 

Although DfE has initiated an eight-week consultation exercise, running from 7th May 2019 until 5th July 2019, this Committee would express its concern that the consultation exercise has been commenced directly after the 2019 Northern Ireland Local Government elections have been concluded and at a point where local government Committee memberships and governance arrangements are still being finalised. The Committee would therefore contend that given the significance and extent of Petroleum Licence Application PLA1/16 for Belfast City and for other council areas, the Department has afforded insufficient time for Petroleum Licence Application PLA1/16 to be adequately scrutinised by Committee and Council and for a comprehensive technical response to the licence application to be provided to them to inform our response to the Department. 

 

Nevertheless, given the timeframe set forth by DfE, the Committee has reviewed the content of the Redacted Application Form for Petroleum Licence Application PLA1/16 and various other supporting documents and would comment as follows.

 

The Committee has concerns that the licence applied for relates to an area of some 1,134 km², described as west, south and east of Lough Neagh and geographically illustrated in Appendix E Area Under Consideration. The area applied for therefore covers wards within Antrim and Newtownabbey Borough Council, Armagh City, Banbridge and Craigavon Borough Council, Lisburn and Castlereagh City Council, Mid Ulster Council and Belfast City Council. Within the Belfast City Council area, wards principally affected are those located in the southwest, west and north of the city; thereby potentially affecting in excess of 100,000 residents living within these areas. The proposed licenced area also encompasses aspects of the Belfast Hills, including Black Mountain and Divis.

 

Given the potential impacts on the environment or human health, and Members’ concerns regarding insufficient information and analysis or evidence provided by the DfE on this and concern over the long term sustainable development impact for NI, the People and Communities Committee has agreed not to support the granting of this Licence by the Department.”