Hampshire County Council

Executive Member, Policy & Resources Item 1

17 March 2005

Proposal for oil exploration on County Council land at Woodhouse Lane,

Hedge End

Report by the Director of Property, Business and Regulatory Services

1

Summary

1.1

The following decision is sought:

i) the request for the grant of a licence to use County Council land at Woodhouse Lane, Hedge End for the purposes of oil exploration be declined.

2

Reason(s)

2.1

To accede to the request would not be consistent with the management of the County Council's land assets in the best interests of the local community, having regard to the asset management issues identified in the attached report.

2.2

This decision supports the following Aim of the Corporate Strategy

Aim 2 - Stewardship of the environment by protecting the County Council's land assets and ensuring that Hampshire remains a place where people want to live.

3

Other options considered and rejected

3.1

None

4

Conflicts of interest declared by the decision-maker or other Executive Member consulted

4.1

None

5

Dispensation granted by the Standards Committee

5.1

None

6

Reason(s) for the matter being dealt with if urgent

6.1

Not applicable

Approved by:

..........................

Date of decision:

.........................

Councillor T K Thornber

Hampshire County Council

Executive Member, Policy & Resources Item 1

17 March 2005

Proposal for oil exploration on County Council land at Woodhouse Lane,

Hedge End

Report by the Director of Property, Business and Regulatory Services

How the conclusion in this report fits in with the Corporate Strategy

This scheme will impact on the delivery of the following Corporate Aim:

Aim 2 - Stewardship of the environment by protecting the County Council's land assets and providing and ensuring that Hampshire remains a place where people want to live.

1

Summary

1.1

The purpose of this report is to consider the response the County Council should take as landowner to the proposal from Northern Petroleum to construct an exploratory site, of up to three wells, to drill for hydrocarbons on County Council land for which the company has submitted a planning application.

2

Introduction

2.1

Petroleum rights in the UK are held by central government who control all aspects of petroleum industry activities from exploration to production with the grant of Petroleum Exploration Development Licences (PDL).

2.2

Northern Petroleum (GB) Ltd currently holds a licence for approximately 80sq miles of southern Hampshire.

2.3

In 1988 an exploration well adjacent to Junction 7 of the M27 motorway at Hedge End found oil, but at the time it was not considered suitable for further testing. However, subsequent exploration and extraction from other parts of the same Great Oolite Field have suggested that further tests should be carried out. Northern Petroleum is now seeking a site from which to drill wells to establish if the oil can be produced in commercially viable quantities in the Hedge End area.

2.4

In order to proceed with exploration the company requires approval of the landowner and planning consent. The site of the previous well is no longer available and, as the County Council owns much of the undeveloped land to the east and south of Hedge End, an approach was received from Northern Petroleum to establish a well(s) on County Farms land off Woodhouse Lane, Hedge End.

2.5

As Northern Petroleum is licensed by the Department of Trade and Industry in the exploration of publicly owned mineral assets it was considered appropriate for discussions to be held with the Company to establish if a suitable site and form of operation could be identified which would suit the County Council's management of its land assets and thereafter for planning consent to be sought. The Company has dealt with the issue through a planning consultant who contacted the Estates Practice as the managers of the County Farms Estate. Several discussions have taken place with the consultants for Northern Petroleum about the planning requirements and the licence proposed by the Company for its initial occupation of the land for exploration, and any subsequent extension to allow extraction.

3

Planning Application

3.1

The consultant was aware that, in order to proceed with exploration, the Company required both the landowner's consent, which in constitutional terms is a decision of the Executive Member for Policy and Resources, and the submission of a formal planning application. The consultant was advised that the earliest date for the former was 14 April 2005 and it is understood that, in order to have the prospect of construction during the summer months, the consultant, on behalf of the Company, submitted a planning application on 2 February 2005 with the prospect of it being determined by the County Council's Regulatory Committee on 24 April 2005.

3.2

The detailed information contained in the Planning Application (which was lodged by the consultant and handed to the Estates Practice on 2 February 2005) is the first time that the County Council has had the opportunity to consider the proposals in sufficient detail for an informed decision to be made as landowner.

3.3

The Planning application has been formally registered by the Environment Department who, as a matter of routine, when such applications are lodged consult with the Local Planning Authority (Eastleigh Borough Council) and affected Parish Councils (in this case both Hedge End and Botley Parish Councils).

3.4

The process under which the County Council as the Minerals and Waste Planning Authority will determine such planning applications is independent of any considerations by the County Council as landowner.

3.5

Many organisations each year have the desire and interest to submit planning applications on Council land - as indeed they are free to do. The vast majority of organisations - virtually all - usually accept the convention that the Council wishes the landowner's consent to be determined in advance of a planning application. The fact that this protocol has not applied in this case, means that we have the unusual position of media interest, District and Parish Council involvement, and local concern generated by a formal planning application being submitted before the ownership issues could be considered by the Executive Member.

4.

Evaluation

4.1

The petroleum and oil industry is a major investor and employer in Hampshire and the industry has demonstrated its ability to successfully operate in environmentally sensitive areas such as Poole Harbour. As part of the current licensed programme of exploration, the County Council's land has been identified by Northern Petroleum as their preferred site from the limited alternative locations from which the previous finds under Hedge End may be tested.

4.2

However, although the proposed site is located in the centre of an area of farm land it is bounded by the Berrywood Primary School, and housing development to the north, west and south. The Primary School, which is also within County Council ownership is the largest in Hampshire with 680 pupils. The edge of the school site is approximately 250 metres from the nearest edge of the proposed exploration site. The nearest residential development is approximately 280 metres from the edge of the exploration site. Whilst the site is within a field pattern defined by strong hedgerows, which would provide some visual screening, the height of the proposed drilling rig at 34m means that it would be visible from the surrounding development.

4.3

The Governors of the Berrywood Primary School have been consulted on the proposed drilling and have expressed their concerns over the potential impact on the operation of the school and risks to the wellbeing of the pupils, both during the exploratory drilling and any subsequent long term extraction. The particular concerns are the risk of explosion or airborne contamination from the drilling process, any storage of flammable materials and the gas flares which would be used in the process. Concerns also exist regarding the risk of exacerbating existing respiratory conditions of pupils and the effect the noise would have on the enjoyment of the school, particularly the recently opened sensory garden.

4.4

When compared with the current arable use of the land it is obvious that the industrial and exploration processes involved sit uneasily with the operation of the Primary School and nearby development. A formal risk assessment of the issue could be done, which would need to consider the tight Health and Safety Regulations which cover the oil industry.

4.5

In the main, the exploration or production sites already operating are in more isolated locations although other schools and houses in Hampshire have co-existed with much more significant oil refining and production facilities such as those at Fawley.

4.6

The proposal for a 3-year licence would bring some revenue to the Council. However, this is not a material consideration compared to the asset management issues for the County Council as landowner which include:

· the nature and duration of the proposed use, and its impact

· the opportunity costs of granting any licence

· the benefits to the County Council and local community

· the specific issues relating to nearby development

· any considerations of safety

· any matters of policy and practice relating to access to Council land and the asset management policies of the Council

· any relevant commercial considerations

It should be noted that the royalties from any subsequent extraction of oil will be payable to Central Government and not the land owner.

4.7

Unlike a private landowner the County Council also has a duty to consider its role as the Local Education Authority in relation to the School and the impact on the wider community. The expressions of concern of the School Governors and the perception of the risks which the operation would bring to the local community (including the School) are of relevance to the County Council.

4.8

Whilst the short-term use of the Woodhouse Lane site for exploration could be accommodated for a period of up to 3 years in terms of the farm tenancy of the land, the possibility of establishing an industrial operation for up to 30 years in the event of sufficient oil deposits being found would reduce the viability of the farm operation. Should the proposed Botley Bypass be constructed the viability of the farm holding will also be diminished during the same period.

4.9

There are no plans for current development on the site. Potentially, the land has development value (in the medium to long term) and decisions on the future use of the land will be made through the current Local Plan and future Local Development Frameworks. It would not be advisable that any prejudicial interest in the land be created.

4.10

In addition to the concerns expressed by the School Governors there is also emerging local concerns over the similar issues together with a particular concern over the generation of intrusive noise levels, particularly at night.

4.11

It would be normal practice if the County Council proposed any such use to consult at an early stage with the community concerned. Through the prior submission of the planning application and by not adopting the protocol mentioned above, this opportunity has been lost.

5.

Conclusion

5.1

Concerns expressed as to the impact of the proposal, such as visual intrusion, noise, nuisance and issues of public safety would normally be considered in the course of determining the planning application, deciding whether development should be allowed to proceed, and if so on what conditions. However, as landowner the County Council must also consider the impact the operation would have on the County Council's landholdings for up to 33 years, and the benefits of the proposal to the local community. The planning application was submitted without following the normal protocol of first consulting the County Council as landowner to obtain consent. Having regard to the nature and level of information submitted in support of the application, and the lack of consultation with the community at an early stage, I am not satisfied that the proposal brings any significant benefits to the local community. Certainly, the impact of the proposal outweighs the limited financial returns that would be received should the application be granted.

5.2

If the request for a licence to explore from County Council land at Woodhouse Lane is refused then the Company could choose to withdraw its planning application or wait for the matter to be determined by the Regulatory Committee, expected to be at its meeting on 24 April.

6

Consultation with local Member

6.1

Councillor P Brown has been consulted on this project/scheme and has expressed concern over the proximity of the site to the Berrywood Primary School and the potential impact on the school and the adjoining housing.

Recommendations

That:

1

the request for the grant of a licence to use County Council land at Woodhouse Lane, Hedge End for the purposes of oil exploration be declined on the basis of the asset management issues identified in the report.