Unconventional oil and gas policy: SEA

2 Methodology

2.1 This section of the Environmental Report sets out:

• the approach to the assessment, including the use of environmental baseline information and its level of detail;
• the approach to the SEA and the assessment of reasonable alternatives;
• background information on the development parameters associated with unconventional oil and gas development.

SEA baseline and other information / reference sources

2.2 The purpose of the environmental baseline is to provide a description of the environmental characteristics against which the changes arising from the policy are assessed. It is usual to consider how the environmental baseline would have continued to evolve in the absence of the policy that is being assessed. Environmental trends are therefore taken into account.

Environment baseline information

2.3 The environmental baseline for the SEA is structured around the following SEA topics, all of which have been scoped in to the SEA:

• Air
• Biodiversity, flora and fauna
• Population and human health
• Soil
• Water
• Climatic factors
• Cultural heritage, including architectural and archaeological heritage
• Landscape and geodiversity
• Material assets.

2.4 The baseline reflects the nature of the unconventional oil and gas issues for each SEA topic and the likely spatial extent of these. Some SEA topic areas have a national and international relevance, e.g. climate change. Others are more local to the areas where unconventional oil and gas is most likely to develop in the absence of the preferred policy position, e.g. impacts on heritage assets or their setting. Local authorities in the areas identified with the most likely potential for unconventional oil and gas development include West Lothian, City of Edinburgh, East Lothian, Midlothian, Falkirk, North Lanarkshire, South Lanarkshire, Glasgow, East Dunbartonshire, South Lanarkshire, Clackmannanshire, Stirling, and Fife. Where relevant, information which relates to these areas is included in the baseline. The baseline also includes reference to broader national trends.

2.5 The scope of baseline information included under each SEA topic area is informed by the Scottish Government commissioned research on unconventional oil and gas and the relevant environmental issues. The environmental baseline is presented in Appendix 1 and additional information is referred to in the assessment in Sections 4 to 14.

2.6 As described above, the scope of the environmental baseline collated under each SEA topic is informed by the commissioned research on unconventional oil and gas e.g. for air quality this reflects the pollutants identified from unconventional oil and gas development, for health this focuses on the issues identified relevant to the potential health effects of unconventional oil and gas development.

Approach to the SEA

2.7 A narrative approach is used for the SEA based on the description of the environmental effects of the alternatives under each of the SEA topic areas:

• Air
• Biodiversity, flora and fauna
• Climatic factors
• Cultural heritage, including architectural and archaeological heritage
• Population and human health
• Landscape and geodiversity
• Material assets
• Soil
• Water.

2.8 The description of environmental effects under each topic area is informed by:

• the environmental protection objectives of relevant plans, programmes and strategies;
• the baseline information and analysis of existing environmental problems; and
• the existing evidence base documents which have been prepared for Unconventional Oil and Gas in Scotland and within the UK. Other available evidence is drawn upon as required to inform the assessment.

2.9 As noted previously, it is recognised that there are different levels of detail in the evidence base surrounding different SEA topics, and some impacts are more location specific. However, within the scope of the area of the Midland Valley identified as having potential for unconventional oil and gas, the SEA is not site-specific, and the SEA describes the broad impacts for some topic areas, and more detail for others.

Regulatory framework

2.10 In order to provide context for the assessment, the role of relevant regulatory controls is taken into account within the assessment of each SEA topic. This is summarised in the plan, programme and strategy review (Section 3 and Appendix 2) within the topic areas for the assessment findings, and in Section 15, Mitigation.

Reasonable alternatives

2.11 The 2005 Act requires that the Scottish Government also identify, describe and evaluate the likely significant effects on the environment of any reasonable alternatives to the preferred policy position, taking into account the objectives and geographical scope of the plan or programme. This section outlines what has been assessed, including the reasonable alternatives that have been considered.

2.12 In considering what a “reasonable” alternative is, the Scottish Government’s commitment to decarbonise the whole energy system and tackle climate change has been taken into account.

2.13 The Climate Change (Scotland) Act 2009 sets a long-term target to reduce greenhouse gas emissions by 80% from the baseline (which is 1990 or 1995 depending on the gas). The Act also contains annual targets for each year to 2050. All of these targets are set on the basis of territorial emissions across the Scottish economy as a whole. On 24 May 2018, Scottish Ministers brought forward a draft Climate Change Bill that proposes, in response to the UN Paris Agreement, to increase the 2050 target to a 90% reduction and keep the setting of a further target for net-zero greenhouse gas emissions under regular review. In its advice to the Scottish Government on how the Bill might be drafted, the Committee on Climate Change (CCC), said^[9]: “In order to achieve a 90% target, strong and well-designed policies would be required”.

2.14 In 2016 the Scottish Government commissioned the CCC to carry out a study into the compatibility of unconventional oil and gas with Scottish statutory climate change targets.^[10] It concluded that fossil fuel consumption must remain in line with the requirements of these targets. Therefore, Scottish unconventional oil and gas production must displace imported gas, rather than increase domestic consumption. It also concluded that additional production emissions from unconventional oil and gas extraction in Scotland would make meeting existing Scottish climate change targets more challenging, and in order to be compatible with Scottish climate change targets, emissions from production of unconventional oil and gas would require to be offset through reductions in emissions elsewhere in the Scottish economy.

2.15 The Scottish Government’s preferred position is that it does not support the development of unconventional oil and gas in Scotland. This is on the basis that the development of an unconventional oil and gas industry in Scotland would make achieving Scotland’s 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.

2.16 It is recognised that some may regard the development of the industry - the ‘business as usual’ option described below - or a pilot project, subject to the relevant licensing and permitting regimes, as alternatives to the preferred policy position. While the Scottish Government is not minded to view these as reasonable alternatives it does, however, wish to invite views on their assessment.

Business as Usual

2.17 As an alternative to the preferred policy position of no support for the development of unconventional oil and gas in Scotland, under this option an unconventional oil and gas industry could continue to develop in Scotland. This is defined as ‘business as usual’. Applications for planning permission and all other consents would be dealt with in the normal manner and in line with applicable procedural requirements and relevant policy. In particular, applications for planning permission would be determined in accordance with the development plan then in force unless other material considerations indicated otherwise. Scottish Ministers would also exercise their newly devolved powers in relation to onshore oil and gas licensing in Scotland to consider the timing of future onshore licensing rounds.

2.18 The assessment of this option also draws out the environmental impacts of de-watering for coal bed methane (CBM), where these differ from hydraulic fracturing for shale oil or gas. As described previously, 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 the pore spaces. CBM may be extracted through dewatering, with or without hydraulic fracturing, depending on local geological conditions (though currently it is usually extracted without the use of hydraulic fracturing). The Scottish Government does not however consider that it would be a reasonable alternative to differentiate between CBM extraction and hydraulic fracturing in finalising the preferred policy position. This is because many of the impacts associated with unconventional oil and gas, including impacts on local communities, arise irrespective of whether hydraulic fracturing or de-watering techniques are used. Indeed, the social impacts identified in the responses to the Talking “Fracking” public consultation, while not captured in this SEA, are significant factors which will be considered by the Scottish Government in reaching a view on the finalised policy.

KPMG scenarios

2.19 The assessment of the ‘business as usual’ reasonable alternative is based on the KPMG (2016) development scenarios of a) central, b) low and c) high levels of exploration, appraisal and extraction of onshore unconventional oil and gas, as representing a ‘broad range of impact scenario’ of extraction within which broad locational effects, concentrated within central Scotland, can be considered. The assessment draws out any differences between the three unconventional oil and gas development scenarios where identified. There are similarities in the effects for all three scenarios identified under some of the SEA topic areas due to the general nature of the effects. Therefore conclusions relate principally to the scale of development and the associated effects. The environmental effects of the preferred policy position include the environmental effects of unconventional oil and gas development avoided, and any wider high level effects identified which will also occur within Scotland.

Pilot project

2.20 The assessment includes consideration of the development of a theoretical single pilot project in one of three alternative locations within the Midland Valley and within a PEDL area where resource has been identified. The purpose of a theoretical pilot project would be to further inform the evidence base, including increasing understanding of the potential resource, and impacts associated with its extraction. The theoretical pilot project is based on a number of assumptions including that a project would have research and geoscience as its key driver, and be required to be delivered in collaboration with an independent research body or an academic institution and demonstrate whole lifespan of development (exploration, appraisal, production, and decommissioning) over approximately 10 years. To ensure that the range of potential effects of a single pilot project are considered, the assessment considers how effects would vary if the pilot were located in an unspecified rural or semi-urban or urban fringe geographical location.

2.21 For the purposes of the assessment a theoretical pilot project is assumed to be one pad with multiple wells. The number of wells is not defined, however it is assumed that more wells would result in greater impacts. Table 2.1 below illustrates the assumed parameters for the three alternative pilot locations.

Table 2.1: Assumed parameters for the three alternative hypothetical pilot locations

SEA topic area	Pilot 1 Rural	Pilot 2 Semi-urban	Pilot 3 Urban fringe
Air	Outside of AQMA	Close to AQMA	Outside of AQMA
Water	Area of higher water quality	Area of moderate water quality	Area of poor water quality
Soil	Area of high carbon soil	Area of moderate carbon concentration	Area of moderate carbon concentration
Biodiversity flora and fauna	National biodiversity importance (proximity to SSSI)	Direct pathways to area of international biodiversity importance	Local biodiversity importance
Population and human health	Small villages, low deprivation, rural road network	Close to medium sized centre of population with higher levels of deprivation, urban road network	Close to larger urban area and many settlements, several with higher levels of deprivation, major urban transport infrastructure
Cultural and archaeological heritage	Unknown archaeology only	Unknown archaeology only	Unknown archaeology only
Climatic factors	Climatic factors impacts same for all pilots	Climatic factors impacts same for all pilots	Climatic factors impacts same for all pilots
Landscape	Area of local landscape value, rural character	Lower landscape value, close proximity to urban area	Lower landscape value, urban industrial character
Material assets	Waste disposal impacts same for all pilots	Waste disposal impacts same for all pilots	Waste disposal impacts same for all pilots

Approach to the assessment

2.22 The approach to the assessment includes the following stages:

• Identify the environmental effects of the reasonable alternatives and preferred policy position on each of the SEA topics and the stage of unconventional oil and gas development to which they relate;
• Describe the current pressures and trends on that SEA topic area, as relevant to the environmental effects identified;
• Describe the existing regulatory processes which control the effects identified;
• For each environmental effect the scale of effect, timescale of effect, whether the effect is temporary or permanent, and any spatial variation is described for each alternative.

2.23 The assessment considers the potential for cumulative effects across each SEA topic, and between topics (e.g. potential impacts across water and air and their cumulative impact on population and human health). It also identifies areas where the existing review of the regulatory framework has identified that regulation could be strengthened, helping to mitigate environmental effects described.

• The assessment is presented as a narrative, framed around key questions and with the use of tables as appropriate. The structure is as follows: What are the environmental effects of unconventional oil and gas development on [SEA topic]?
• How do these effects relate to the current 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 in relation to the alternatives identified:
  • ‘Business as usual’–Pilot project
  • Preferred policy position
• Cumulative, secondary and synergistic effects.
• Summary table.

Uncertainty

2.24 The subject matter of this assessment mean that there are a number of areas of uncertainty, some of which would only be resolved if exploration and production of unconventional oil and gas were to take place. These include:

• The extent of unconventional oil and gas deposits present in central Scotland their technical and commercial viability;
• In the absence of the preferred policy position, the likely scale and phasing of any exploitation of these unconventional oil and gas deposits;
• The need to secure all relevant permissions and licenses; and
• The geographic distribution of pads and wells across Central Scotland, including location with respect to sensitive human, natural and cultural receptors.

2.25 While existing regulatory processes, allied to good working practices and monitoring, would help ensure that many of the most serious adverse effects would be avoided, significant areas of uncertainty remain and are highlighted throughout this report.

2.26 There is also uncertainty regarding the impacts of a new supply of unconventional oil and gas on the wider energy market. However, the Scottish Government commissioned research,^[11,12] identified that the relative small scale of potential Scottish production relative to the scale of US production and a highly interconnected European energy market would likely mean there was no impact on domestic or global energy prices. The commissioned research also highlighted the potential for domestically produced unconventional oil and gas to have a positive impact for manufacturing companies which use it as a feedstock, should import substitution lead to lower costs of their primary input through avoiding importing and transportation costs. However, it did not quantify these potential impacts given the uncertainties.

2.27 The impact of Scottish production at an EU or global emissions level is unlikely to be significant. At the domestic level, total Scottish GHG emissions will rise as a result of GHG emissions associated with the exploration, exploitation, processing and transport of unconventional oil and gas, all other factors being equal. As a result, this SEA focuses on the environmental effects of the preferred policy position, and reasonable alternatives that are likely to occur within Scotland. Where appropriate, however, it does refer to potential wider effects whilst highlighting the very high levels of uncertainty associated with these.

Assessment of significance

2.28 In line with the requirements of the Environmental Assessment (Scotland) Act 2005, the assessment of significance is based on the following:

(a) the probability, duration, frequency and reversibility of the effects;
(b) the cumulative nature of the effects;
(c) the transboundary nature of the effects;
(d) the risks to human health or the environment (for example, due to accidents);
(e) the magnitude and spatial extent of the effects (geographical area and size of the population likely to be affected);
(f) the value and vulnerability of the area likely to be affected due to—
(i) special natural characteristics or cultural heritage;
(ii) exceeded environmental quality standards or limit values; or
(iii) intensive land-use; and
(g) the effects on areas or landscapes which have a recognised national, Community or international protection status.

2.29 Within the assessment, the assignment of a minor or significant effect is based on a judgement of a combination of the above matters. The factors influencing these judgements are presented in summary tables for each topic covered by the assessment. None of the effects identified for the SEA topic areas are identified as having transboundary effects. Although issues affecting climate change have global implications, this is inherent within that topic area and it does not result in identifiable impacts on other member states.

Mitigation

2.30 As outlined in the approach to the assessment for the ’business as usual’ options, existing environmental regulation and mitigation is taken into account as ‘assumed mitigation’ and factored into the assessment of the significance of effects. Areas of potential further mitigation identified from the evidence base are also included where they impact on the scale of effects avoided by the preferred policy position. These are likely to be considered at a project scale and implemented through consenting processes.

Risk and uncertainty

2.31 The issue of risk is of particular relevance to this assessment due to the challenges in quantifying the likelihood of some of the potential environmental effects identified.

2.32 There are a range of uncertainties that in the absence of the preferred policy position would influence the development of unconventional oil and gas and the potential impacts that would result. This includes uncertainties over the scale and location of unconventional oil and gas development and uncertainties over the environmental effects arising.

2.33 While the positive influence of regulatory processes has been taken into account in making judgements about the likely significance of environmental impacts, the risk of more significant impacts has been noted within the text where levels of certainty allow. This is based on a high level comparison of the scale of development, the level of certainty about its environmental effects and the potential for significant adverse effects in the absence of regulation. While this is recognised as a simplistic approach, it does highlight areas of risk and key uncertainties, particularly related to accidents or other unplanned events, or failures in adherence to regulatory procedures.

Monitoring

2.34 Recommendations are made for monitoring the likely significant environmental effects identified. The focus is on the use of existing monitoring frameworks, within other relevant plans, programmes and strategies.

Difficulties encountered and data limitations

2.35 This is a strategic level assessment of a high level policy position and the approach has been designed to reflect this. The evidence base does not consistently make clear the differentiation between the environmental impacts of coal bed methane and shale gas extraction. However, where different effects can be identified these are drawn-out in the assessment. The environmental impacts of shale oil production are assumed to be the same as the environmental impacts of shale gas production. This reflects the similarity in the two processes and is consistent with the treatment of the two processes within Scottish Government Expert Panel report (2014)^[13], which also recognises that it is not yet clear whether any such possibility of shale oil production exists in Scotland.

2.36 Scotland currently imports shale gas. The preferred policy position is likely to result in some oil and gas products continuing to be sourced from elsewhere. However, as decisions on this lie beyond the scope of the policy, and given the difficulty in defining such sources and predicting the associated environmental effects (extraction, processing, transport) with any degree of certainty, it is considered appropriate that the scope and focus of this SEA is on the effects that would occur within Scotland. As noted above, uncertainties about the market response to the production of unconventional oil and gas in Scotland make it equally difficult to judge the likely effects of changing production patterns and demand, including indirect effects on the wider take-up of low carbon energy sources.

Assumptions on development parameters to inform assessment

2.37 In order to ensure consistency in assessment, the following table summarises the parameters of unconventional oil and gas development, identified from the existing evidence base, which have been used to inform the assessment.

Table 2.2: Development parameters used to inform assessment

Development	Parameter
Area of a well pad	Pads are usually around the size of a football pitch (5,000-8,000 square metres)[14]. For the purposes of the assessment the area of 8,000m2 is assumed.
Pad infrastructure	A drilling pad is a base built to provide space for the drilling rig, piping and storage equipment, and other site facilities such as mobile cabins for workers.[15]
	Flood lighting, generators, sealed container units for chemicals and waste materials and fluids. Portable offices and work amenities[16]
	The average height of a typical drilling rig is about 38 metres[17]
	Perimeter fencing[18] Assumed part of site construction and safety, and illustrated in diagram of exploration and appraisal at Figure 7 within Talking “Fracking” consultation document.
	Combination of all the above references gives the description of potential pad infrastructure during exploration, appraisal and early years of production as: Drilling rig, piping and storage equipment, flood lighting, generators, sealed container units for chemicals and waste materials and fluids, portable offices and work amenities and perimeter fencing.
Traffic movements	Traffic movements to be sustained at around 190 per week for a period of approximately two years during the exploration and appraisal phase[19]. After the well is completed, it can be expected to operate with much lower levels of traffic movements for a period around 5 to 10 years until the decommissioning and site restoration phase. As a result, the rate of vehicle movements greatly fluctuates throughout the life of each well[20]. Each shale gas well pad could require between 13,000 and 93,000 vehicle movements, spread over about a 20 year period. A coal bed methane well pad is estimated to require about 93,000 vehicle movements over about 12 years’[21]. It is important to note that these figures do not reflect vehicle size. For instance, the impact from a Heavy Goods Vehicle (HGV) is judged to have more adverse environmental impacts compared to basic workforce transportation vehicles. The movement of vehicles to and from unconventional oil and gas sites is influenced by several factors including the location and size of the facility, the nature of the underlying geology, and the availability of a local water source.
Number of wells and pads:	KPMG low scenario Shale: 10 pads 10 wells per pad 15-year life span CBM: 2 pads 15 wells per pad 12-year life span[22] Total area approx.: 9.6ha KPMG central scenario Shale: 20 pads 15 wells per pad 15-year life span CBM: 2 pads 15 wells per pad 12-year life span[23] Total area approx.: 13.6ha KPMG high scenario Shale: 31 pads 30 wells per pad 15-year life span CBM: 2 pads 15 wells per pad 12-year life span[24] Total area approx.: 26.4ha
Peak production year[25]	Low scenario Shale gas: 2047 Associated liquids: 2048 Central scenario Shale gas: 2048 Associated liquids: 2044 High scenario Shale gas: 2049 Associated liquids: 2048