Unconventional oil and gas policy: SEA

Non-Technical Summary

Introduction to the Scottish Government’s Preferred Policy Position

The Scottish Government has taken a cautious, evidence-led approach to considering onshore unconventional oil and gas in Scotland. This included the establishment of an Independent Expert Scientific Panel (‘the Expert Panel’) to examine the evidence on unconventional oil and gas, including hydraulic fracturing, or ‘fracking’, and coal bed methane extraction.

In January 2015, the Scottish Government announced a moratorium on onshore unconventional oil and gas development in Scotland. The moratorium created space to explore issues identified by the Expert Panel, and to carry out a full public consultation. A series of independent research studies were commissioned on issues such as climate, seismic activity, transport and health impacts.

On 24 October 2017, the Scottish Parliament voted in favour of the Scottish Government’s preferred policy position of not supporting onshore unconventional oil and gas development in Scotland.

A Strategic Environmental Assessment (SEA) on the Scottish Government’s preferred policy position is required to be undertaken, and the findings are set out in this Non-Technical Summary and the Environmental Report.

Unconventional oil and gas in Scotland

What is unconventional oil and gas?

Unconventional oil and gas deposits are contained in impermeable rocks, such as shale or coal deposits. The term ‘unconventional’ in unconventional oil and gas refers to the types of geology in which the oil and natural gas are found. For the purpose of this study, unconventional oil and gas includes shale gas, associated liquids and coal bed methane.

Hydraulic fracturing (or ‘fracking’) is a drilling technique that is used to fracture rock to release the oil and gas contained in those rocks. It is most commonly used to extract oil and gas from shale. The rock is fractured by injecting pressurised fluids to open small spaces which allow the release of oil or gas.

Coal bed methane (CBM) 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 within rock. To extract the gas, water is drained from the coal seam to release pressure (known as dewatering). This may be undertaken with or without hydraulic fracturing, depending on local geological conditions.

What is unconventional oil and gas used for?

Unconventional oil and gas can contribute to the provision of natural gas (for energy or energy production) and natural gas liquids as a raw material for the petrochemical industry.

Where is unconventional oil and gas found in Scotland?

Most of Scotland’s unconventional oil and gas deposits occur in and around former coalfields and oil shale fields in Scotland’s Central Belt as well as in the area around Canonbie, Dumfriesshire.

What is involved in the development of onshore unconventional oil and gas?

Unconventional oil and gas development typically involves the following phases of activity: exploration, appraisal, production and decommissioning.

• The exploration phase tests the commercial viability of a site and can include drilling boreholes, seismic surveys, horizontal drilling and hydraulic fracturing tests in relation, most commonly, to shale oil or gas developments.
• Where the exploration phase suggests sites are likely to be viable, the appraisal stage involves more detailed tests to ensure the oil and/or gas can be extracted. Concrete pads and access roads will normally be built, drilling rigs erected and vertical and horizontal drilling undertaken. The exploration and appraisal phases may last between two and six years.
• If a site is suitable for production it is likely that more wells will be drilled and hydraulically fractured (in the event shale oil and/or gas is being targeted or if hydraulic fracturing is required in the pursuit of coal bed methane), with accompanying site activity. After around two years, when the well is established, activity is likely to be limited to maintenance. Production may continue for around 15 years. If the site is targeting gas from coal seams, operations are also likely to include the pumping and treatment of water to release methane that is trapped in the rock.
• Once a site is no longer able to supply oil and gas viably, it will be decommissioned with wells being plugged and abandoned. Surface buildings and equipment will be removed and monitoring and aftercare regimes put in place. Decommissioning can take between two and five years.

How much potential for unconventional oil and gas development is there in Scotland?

There is considerable uncertainty about the scale of unconventional oil and gas development that could take place in Scotland, in the absence of the Scottish Government’s preferred policy position. This includes uncertainty about the amount of oil and gas that it would be economic to extract. This would influence the scale of development that could take place across Central Scotland.

To help understand the possible effects of unconventional oil and gas development in Scotland, this environmental assessment has drawn on three scenarios each reflecting a different scale of development, developed by KPMG as part their Economic Impact Assessment of unconventional oil and gas in Scotland^[1] which is one of a suite of research studies commissioned by the Scottish Government to inform the evidence base,. The scenarios are:

• Low: 10 developments, each with 10 wells; and two CBM developments, each with 15 wells.
• Central: 20 developments, each with 15 wells; and two CBM developments, each with 15 wells.
• High: 31 developments, each with of 30 wells; and two CBM developments, each with 15 wells.

This environmental report has drawn on a wide range of evidence sources about the environmental effects of unconventional oil and gas development, including the suite of studies commissioned by the Scottish Government^[2].

What is Strategic Environmental Assessment?

Strategic Environmental Assessment (SEA) is a way of considering the environment when preparing public plans, programmes and strategies. It identifies potential significant environmental effects and, where necessary, describes how these effects can be avoided or reduced. Through consultation, SEA also provides an opportunity for the public to express their views on proposed policies and their potential environmental impacts.

In this case, SEA is being used to assess the likely environmental effects of the Scottish Government’s preferred policy position of not supporting onshore unconventional oil and gas development in Scotland.

How was the Strategic Environmental Assessment undertaken?

SEA is an assessment of the likely significant environmental effects of the preferred policy position and alternatives to it. The Environmental Report first considers the environmental effects of unconventional oil and gas development on each of the SEA topics (air, water, soil, climate, biodiversity, flora and fauna, cultural and archaeological heritage, landscapes and geodiversity, material assets and population and human health). It then considers:

• How do these effects relate to the current environmental pressures and trends?
• What current regulatory processes control these effects?
• What stages of unconventional oil and gas development result in these effects, and what is the nature of these effects? This is considered for each of the following scenarios:
  • Business as usual
  • Pilot project
  • Preferred policy position

The evidence base does not consistently make clear differences between the environmental impacts of coal bed methane and shale oil and /or gas extraction. However, where different effects can be identified these are drawn-out in the assessment. Cumulative, secondary and synergistic effects are considered, followed by potential mitigation. Findings are then presented in a summary table for each of the SEA topics.

The assessment identifies positive and negative environmental effects and the significance of these, considers whether they would be temporary or permanent, and notes where they would arise in the short, medium or long term. It also distinguishes between effects arising directly from the preferred policy position and any ‘secondary’ effects, which would indirectly impact on the environment. ‘Cumulative’ effects are also identified, including where there will be several impacts in particular areas, or on specific environmental features.

Which reasonable alternatives have been considered?

Part of the assessment involves considering alternative policy positions (referred to as ‘reasonable alternatives’). The Scottish Government’s preferred position is that it does not support the development of unconventional oil and gas in Scotland. The Scottish Government considers the development of an onshore unconventional oil and gas industry in Scotland would make achieving its ambitious energy and climate change commitments even more challenging. The Scottish Government acknowledges the important role of gas in the transition to a low carbon energy future. However, the addition of an onshore unconventional oil and gas industry would not promote Scotland’s ability to meet the established greenhouse gas emissions targets and objectives in relation to protecting and enhancing the environment.

It is recognised that some may regard the development of the industry, subject to the relevant licensing and permitting regimes, as alternatives to the preferred policy position. These alternatives are described in the report as:

• ‘business as usual’;
• pilot project.

While the Scottish Government is not minded to view these as reasonable alternatives it does, however, wish to invite views on their assessment.

What are the key environmental challenges relating to unconventional oil and gas development in Scotland?

Air: Air quality across Scotland is generally good. In most areas, pollution levels are well below limits set to protect human health and the environment. Poor air quality is, however, a particular concern in a number of towns and cities across central Scotland. Road transport and industrial emissions account for a large share of air pollution, with localised hotspots tending to be in locations with high traffic volumes. Unconventional oil and gas development could affect air quality through leakage of gas, by pollution from on-site ‘flaring’ and from the exhausts of on-site equipment and transport movements.

Water: Scotland has large water resources relative to its total land area. Recent decades have seen significant improvements in the quality of water in many rivers, canals and estuaries, though more work is required to improve the quality of many rivers across the Central Belt. Flooding is a significant issue in a number of urban centres in central Scotland, often coinciding with areas where communities are particularly vulnerable to the impacts of flood events. Flood risk has increased as a result of development, changes in the way farmland is managed, changing rainfall patterns associated with climate change and, along the coast, sea level rise. Natural habitats including woodlands, wetlands and peatlands are recognised as playing an important role in managing the risk of flooding. Unconventional oil and gas development could pollute ground and surface water due to the release of contaminated water or other hazardous materials. Where water is pumped out of the ground to release methane, there could be impacts on the levels of ground and surface water, with knock on effects for biodiversity and the supply of water for other uses.

Soil: Scotland’s soils are diverse and are important for biodiversity, agriculture and forestry, play a significant role in absorbing and storing carbon from the atmosphere, and absorb and filter water. Unconventional oil and gas development could increase the amount of soils lost to development, could increase the risk of soil pollution from leaks and accidental release of materials and could result in the release of greenhouse gases from high carbon soils.

Climate: Scotland’s climate is characterised by generally cool summers, mild winters and rainfall spread throughout the year. There is growing evidence that Scotland’s climate has changed over the past century and scientific projections suggest that patterns of change will continue. Key trends include drier summers, wetter winters and more frequent heavy rainfall. Total annual rainfall is increasing in Scotland. Warming trends are resulting in rising sea levels, whilst an increase in storminess could increase the risk of storm surges or increased wave heights. Climate change could have adverse effects on other aspects of the environment, including water and air quality, as well as biodiversity and human health. Scotland has made good progress in cutting its greenhouse gas emissions so as to play its part in global efforts to slow the rate of climate change. Unconventional oil and gas development could result in greenhouse gas emissions as a consequence of leakage, processing, transport and use of gas.

Biodiversity, flora and fauna: Scotland has a rich natural heritage, with a network of nationally and internationally important sites supporting many rare plants, birds and animals. Biodiversity across Central Scotland has historically been under pressure from new development, agricultural change and the loss of semi-natural habitats such as wetlands, woodlands and hedgerows. Unconventional oil and gas development could add to these pressures by further fragmenting habitats, increasing noise and disturbance, affecting water dependent habitats, the accidental release of polluting materials and adding to the risk of climate change and the spread of invasive species.

Cultural and archaeological heritage: Scotland’s historic environment includes thousands of historic buildings and monuments. Within central Scotland, important historic assets include World Heritage Sites, Conservation Areas, battlefields, archaeological sites, historic buildings, historic designed landscapes and former industrial sites. Continued development and factors such as climate change mean that many historic sites, including those not protected by designation, are under pressure. Unconventional oil and gas development could contribute to these pressures.

Landscape and geodiversity: Scotland contains a wide variety of landscapes including mountains, moorland, farmland, coasts and islands. Together these landscapes contribute to the attractiveness of Scotland as a place to live, visit and invest. New development, together with changes in agriculture and forestry are increasing pressure on Scotland’s landscapes, whilst further impacts result from changing climate and our efforts to slow and adapt to it. Unconventional oil and gas development could add to development pressures on the landscape across central Scotland as well as contributing to climate related landscape change.

Material assets: Scotland has many natural resources and material assets, not least its high quality agricultural land, and extensive areas of forestry and woodland. Scotland’s transport infrastructure is also a key asset, connecting our urban and more remote rural areas. Unconventional oil and gas development could reduce opportunities to access some natural resources whilst increasing pressure on transport infrastructure.

Population and human health: The population in Scotland is estimated to be 5 million people and is concentrated in central Scotland in Glasgow and the Clyde Valley, the Lothians, Fife, Falkirk, Stirling, Clackmannanshire and Ayrshire. Scotland’s population is continuing to grow, though there is significant variation in trends within the Central Belt and across Scotland more widely. The population is, however, aging, with an increase in the proportion of older people. The contribution of a high quality environment to people’s health and wellbeing is increasingly well understood, with factors such as air pollution and water quality, as well as access to outdoor recreation playing an important role. Unconventional oil and gas development could affect population and human health in a number of ways including noise and light pollution, odour, the risk of accidental release of polluting materials, increases in road traffic, visual impacts, health and safety impacts and concerns about minor earth tremors that could be associated with exploration and extraction.

Which existing environmental protection objectives are relevant?

There are many established environmental protection objectives, which form the context for the assessment. International and national level policies and strategies aim to protect and enhance our environment. Biodiversity objectives focus on sites and species which are of particular value, and aim to protect and improve natural heritage networks. Objectives for water, soil and air aim to reduce pollution, and to reverse the effects of past emissions. Landscape objectives protect our most scenic areas, reflect the importance of the interaction between people and the land, and aim to enhance areas where landscape qualities have been eroded over time. Cultural heritage objectives range from protection of internationally and nationally important assets to recognition and management of more locally important buildings and archaeology, and their wider setting. Cutting across all of these objectives, international and national climate change objectives are expressed in targets for reducing greenhouse gas emissions, and also support adaptation to changing weather patterns.

Proposals for unconventional oil and gas development would be subject to a number of regulatory and consenting processes designed to ensure that these environmental protection objectives are met. These include regulations governing emissions to air and water, the assessment of impacts on important nature conservation sites, requirements for environmental monitoring, health and safety measures and the management of accidental release of hazardous material. The following bodies act as regulators:

• Scottish and UK Governments;
• Oil and Gas Authority;
• Coal Authority;
• Health and Safety Executive;
• Scottish Environment Protection Agency;
• Scottish Natural Heritage;
• Historic Environment Scotland; and
• individual local authorities through the planning process.

This range of regulatory and consenting processes would mean that some of the more significant environmental effects of unconventional oil and gas development could be avoided or reduced in significance.

Findings of the Strategic Environmental Assessment

What would happen to the environment without the preferred policy position?

Business as usual

In the absence of the preferred policy position, proposals for unconventional oil and gas development may come forward. Subject to gaining planning consent and meeting other regulatory requirements, development could take place at locations across central Scotland.

There is considerable uncertainty as to the amount of development that would occur, whilst a number of potential impacts would depend on the locations where development took place. The assessment has therefore drawn on assumptions based on previous technical studies commissioned by the Scottish Government.

Where appropriate the assessment has distinguished between different types of unconventional oil and gas development and between the various operations that these activities entail. The detailed findings are set out in the Environmental Report with a summary of the main effects presented here.

The development of an unconventional oil and gas industry in Scotland has the potential for significant negative effects on:

• air as a result of direct gas emissions, and of exhaust emissions from construction activities and traffic serving the developments;
• water quality as a result of the pollution of ground and surface water due to the release of contaminated water, hazardous materials or saltwater intrusion. The combined effects of pollution and the abstraction of water could result in more significant impacts on the water environment;
• climatic factors as a result of the uncontrolled and controlled release of produced gas to the atmosphere, the release of greenhouse gases as a result of site development and the release of greenhouse gases from the processing and use of Scottish unconventional oil and gas. The combined effects of these greenhouse gas emissions could be significant. The development of an unconventional oil and gas industry in Scotland would make achieving the Scottish Government’s energy and climate change commitments even more challenging and would not promote its objectives in relation to decarbonising the economy;
• biodiversity flora and fauna as a result of the loss and fragmentation of habitats and due to the risks associated with accidental spills of hazardous materials, the spread of invasive species and impacts on wetland systems upon which particular species depend. The combined impact of these effects, together with disturbance and the effects of accelerated climate change, could be significant;
• cultural and archaeological heritage as a result of changes affecting the setting of important historic sites;
• landscapes and geodiversity as a result of the impact of unconventional oil and gas development on the character and quality of landscapes, and the associated visual impacts of oil and gas extraction sites; and
• population and human health as a result of potential risks to physical health and safety. The combined effect of this with a range of other impacts (noise, light pollution, odours, recreation and amenity and road safety), could also be significant.

Several of these effects could combine to result in more significant effects on population and human health (for example as a consequence of cultural heritage, landscape, water, air and climatic impacts) and on biodiversity, flora and fauna (for example, as a consequence of air, water and climate impacts).

Pilot project

An alternative development scenario, based on a single unconventional oil and gas pilot project was also assessed as a further alternative to the preferred policy position. The very limited scale of development implied by this alternative would result in much lower environmental impacts. The potential for significant effects would remain depending on the pilot’s location relative to sensitive communities, habitats, waterbodies or historic sites, while the risk of pollution associated with accidents or unplanned emissions would remain. There could also be significant population and human health effects as a result of physical health and safety risks.

What are the environmental implications of the preferred policy position?

The effect of the preferred policy position would be to avoid the environmental impacts associated with the development of unconventional oil and gas in Scotland listed above. The avoidance of these impacts means that the preferred policy position would result in significant positive environmental effects across all of the SEA topic areas.

The preferred policy position would also avoid significant cumulative environmental impacts that could result from an unconventional oil and gas industry in Scotland.

What measures could be put in place to avoid, reduce or manage the environmental effects of the preferred policy position or Reasonable Alternatives to it?

The assessment has concluded that the preferred policy position would not result in significant negative impacts on the environment, so additional measures to avoid, reduce or manage its environmental effects are not required.

The assessment did, however, find that an alternative policy approach, based on allowing unconventional oil and gas development in Scotland, could result in significant negative effects on the environment, even when taking account of existing regulation and consenting processes. Therefore, mitigation measures are identified for alternatives to the preferred policy position. These include:

• monitoring and regular site inspections during all stages of development to identify and address air or water pollution, noise, light or odour impacts;
• use of technology to limit greenhouse gas emissions or for the treatment, re-use and disposal of waste water;
• management of traffic movements and sharing of infrastructure for adjacent sites;
• measures to reduce the risk and severity of accidental pollution spills;
• best practice in site selection, design, construction and restoration methods and programming; and
• carbon off-setting measures such as woodland planting or investment in low carbon energy development.

The effectiveness of many of these measures would depend on the characteristics of the development in question, so it is not possible to describe their effectiveness accurately. While they would help reduce the scale and severity of effects, it is, however, likely that environmental impacts would remain.

What monitoring is proposed?

It is important to monitor the implementation of the preferred policy decision to identify and address any potential or unforeseen negative environmental effects.

There is a strong relationship between the preferred policy position on unconventional oil and gas in Scotland and the Scottish Government’s energy policy. It is anticipated that any unforeseen environmental effects would be most likely to relate to the energy sector, and the sourcing, production and use of different energy sources.

Therefore the proposed monitoring and reporting mechanism for unforeseen adverse effects will be the Annual Energy Statement which will be published by the Scottish Government. This Statement will set out:

• the latest energy statistics;
• the progress made towards existing targets and the new 2030 targets progress made under each of the six Strategic Priorities;
• changes within the UK energy market and international frameworks; and
• an assessment of technological changes and advances with a bearing on Scotland’s energy system.

Official Statistics on Scotland’s greenhouse gas emissions inventory are published annually by the Scottish Government. Independent reports on Scotland’s progress in reducing emissions are published annually by the Committee on Climate Change. The Scottish Government’s current Climate Change Plan has established a new monitoring framework, with annual reports on progress towards a suite of policy output and implementation indicators.

How can I comment on this Environmental Report?

The consultation on the preferred policy position on unconventional oil and gas development and the Environmental Report and partial Business and Regulatory Impact Assessment (BRIA) runs for an eight week period from 23 October 2018 until 18 December 2018. Comments on the preferred policy position, Environmental Report and partial BRIA can be submitted to the Scottish Government’s consultation platform Citizen Space. You can view and respond to the consultation online at: https://consult.gov.scot/energy-and-climate-change-directorate/preferred-policy-position-on-uog/.

You can save and return to your responses while the consultation is still open. Please ensure that consultation responses are submitted before the closing date of 18 December 2018. If you are unable to respond online, please complete the Respondent Information Form (see ‘Handling your Response’ below) and send it to:

If you respond using Citizen Space you will be directed to the Respondent Information Form. Please indicate how you wish your response to be handled and, in particular, whether you are happy for your response to published.

If you are unable to respond via Citizen Space, please complete and return the Respondent Information Form included in this document. If you ask for your response not to be published, we will regard it as confidential, and we will treat it accordingly.

All respondents should be aware that the Scottish Government is subject to the provisions of the Freedom of Information (Scotland) Act 2002 and would therefore have to consider any request made under the Act for information relating to responses made to this consultation exercise.

How will responses be considered?

Following the consultation period, the consultation responses on the preferred policy position, this Environmental Report and the partial BRIA will be analysed.

Responses to the consultation will be taken into account in the preparation of the final policy position.

Finalising the Scottish Government’s position

Following analysis of the consultation responses, Ministers will finalise their policy on unconventional oil and gas development in Scotland and publish a SEA post-adoption statement.

Suggested questions for responses to this Environmental Report and the Scottish Government’s preferred policy position

Respondents may find the following questions helpful to provide a focus for their responses to this Environmental Report and the preferred policy position.

• What are your views on the accuracy and scope of the information used to describe the SEA environmental baseline set out in the Environmental Report?
• What are your views on the predicted environmental effects as set out in the Environmental Report?
• What are your views on the ‘reasonable alternatives’ outlined in the Environmental Report? Please provide any other ‘reasonable alternatives’ which you think should be considered.
• What are your views on the findings of the SEA and the proposals for mitigation and monitoring of the environmental effects set out in the Environmental Report?
• Do you have any views on the proposals contained within the Scottish Government’s preferred policy position statement? There is no need to restate views already expressed in relation to the Talking “Fracking” public consultation as these have been, and will continue to be, taken into account as we move towards finalising the Scottish Government’s policy position.