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Council defeats legal challenge over environmental impact assessment for oil wells development and assessment of indirect greenhouse gas emissions

A Planning Court judge has dismissed a legal challenge to Surrey County Council’s grant of planning permission for the drilling of four new oil wells.

Mr Justice Holgate said that the main issue raised by the challenge in Finch, R (On the Application of) v Surrey County Council [2020] EWHC 3559 was whether a developer's obligation under the Town and Country Planning (Environmental Impact Assessment) Regulations 2017 to provide an environmental statement ("ES") describing the likely significant effects of a development, both direct and indirect, required an assessment of the greenhouse gas ("GHG") emissions resulting from the use of an end product said to have originated from that development.

Surrey granted planning permission to Horse Hill Developments Limited on the Horse Hill Well Site at Hookwood, Horley to retain and expand the site (including two existing wells), and to drill the four new wells, for the production of hydrocarbons over a period of 25 years.

The ES assessed the GHG that would be produced from the operation of the development itself. However, the challenge concerned the non-assessment by the ES of the greenhouse gas that would be emitted when the crude oil produced from the site is used by consumers, typically as a fuel for motor vehicles, after having been refined elsewhere.

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Mr Justice Holgate said it was agreed that once the crude oil produced from the development was transported off site it entered, in effect, an international market and the refined end product could be used anywhere in the world, far removed from the Surrey Weald.

“Furthermore, the issue raised by the claimant has ramifications far beyond the legal merits of the present challenge as they relate to the production of crude oil,” the judge said. “It would apply to the winning of other minerals for subsequent use in the generation of energy. Furthermore, the extraction of minerals or the production of raw materials for use in industrial processes, leading eventually to the consumption or use of an end product, will generally result in GHG emissions at each stage. For example, the production of metals, followed by their use to manufacture parts for motor vehicles and the assembly of such vehicles, will result in GHG emissions from the cars, vans and lorries when they are eventually purchased and driven.”

The judge said the issue raised in the legal challenge might also arise in the case of other industries. “For example, each of the successive stages which may be involved in the handling of waste, recycling, recovery and disposal to landfill can generate GHG.”

Mr Justice Holgate said it went without saying that the extraction of crude oil resulting in the supply of fuel would result in GHG emissions when that end product was used.

“It is common ground that that is addressed by Government policy on climate change and energy, aimed inter alia at reducing the use of hydrocarbons. The issue raised in the present challenge is whether, by virtue of the 2017 Regulations, it was necessary for the planning authority to go further than apply those policies in its decision on whether to grant planning permission for the development, by requiring those GHG emissions to be estimated and assessed as part of the Environmental Impact Assessment ("EIA") of the development.”

The judge said the challenge arose because those opposed to the development had serious concerns about the effects which the extraction and use of hydrocarbons had on climate change.

At this point it was important to emphasise the nature of the court's role in dealing with an application for judicial review,” he noted.

The grounds of challenge, as amended, were:

(1) Surrey failed to comply with the obligations of Directive 2011/92/EU (as amended) ("the EIA Directive") and the 2017 Regulations by:-

(a) failing to assess the indirect GHG impacts of the development arising from the combustion of the oil it produces; and/or

(b) failing to take into account the environmental protection objectives established by the UK which were relevant to the project, namely the urgent need to address the climate crisis and the requirement to reduce GHG emissions by at least 100% below the 1990 baseline.

(2) Surrey failed to comply with the obligations of the EIA Directive and the 2017 Regulations and/or erred in law by interpreting paragraph 183 of the National Planning Policy Framework ("NPPF") and paragraphs 12 and 112 of the Minerals Planning Practice Guidance ("Minerals PPG") so as to permit the downstream GHG emissions from the oil produced by the proposed development to be excluded from assessment.

(3) Alternatively, paragraph 183 of the NPPF and paragraphs 12 and 112 of the Minerals PPG were unlawful because they were not in conformity with the obligations of the EIA Directive and their application in this instance vitiated the defendant's decision.

Mr Justice Holgate rejected the challenge. On ground 1(a) he found that the case law confirmed that EIA must address the environmental effects, both direct and indirect, of the development for which planning permission was sought, (and also any larger project of which that development forms a part), but there was no requirement to assess matters which were not environmental effects of the development or project.

“In my judgment the scope of that obligation does not include the environmental effects of consumers using (in locations which are unknown and unrelated to the development site) an end product which will be made in a separate facility from materials to be supplied from the development being assessed. I therefore conclude that, in the circumstances of this case, the assessment of GHG emissions from the future combustion of refined oil products said to emanate from the development site was, as a matter of law, incapable of falling within the scope of the EIA required by the 2017 Regulations for the planning application.”

The judge concluded that no legal criticism could be made of Surrey’s focus on the land use and development proposed because that was the "project" which was the subject of the planning application and the related EIA.

“Viewed in that way it is impossible to say that SCC's judgment that GHG emissions from the combustion of refined fuels were not an environmental effect of the proposed development was, as a matter of law, irrational. SCC's judgment was not beyond the range of conclusions which rational decision-makers could lawfully reach,” he said.

Mr Justice Holgate dealt with the remaining grounds more briefly, given that the claimant accepted that they would fall away if ground 1(a) failed. He went on to conclude that these grounds should also be rejected.

The judge also commented on the “substantial amount of evidence” produced in the case, particularly in the form of witness statements. “Some of this material was, on its face, inadmissible in proceedings for judicial review. The admissibility of certain other passages was either unclear or dubious. This necessitated attempts by parties to clarify the status of the material, which were not wholly successful. Fortunately, I was not asked to make, nor, as it turns out, did I need to make, formal rulings on this subject. The reasoning in this judgment does not depend upon the resolution of any such issue.”

He said the principles governing the admissibility of evidence in proceedings for judicial review were “well-established and should, by now, be well-known. They were summarised, for example, in Flaxby Park Limited v Harrogate Borough Council [2020] EWHC 3204 (Admin) at [15] to [20].”

Mr Justice Holgate said it was also important to draw attention to the recent observations of the Court of Appeal, presided over by Lord Burnett LCJ, in R (Dolan) v Secretary of State for Health and Social Care [2020] EWCA Civ 1605 at [116] to [121].

“There is an increasing concern about the need for procedural rigour in judicial review in order for justice to be done. Prolix documents conceal rather than illuminate the case being advanced and the real issues genuinely needing to be resolved. This makes the Court's task more difficult, it is wasteful of costs and it may lead to delay. It can also lead to a disproportionate and unjustifiable use of the Court's resources for one case at the expense of other litigants waiting to have important issues raised by their cases resolved. The delivery of justice by allocating an "appropriate share" of the Court's resources to a case, while taking into account the needs of other cases underlies the overriding objective in CPR1.1 and other recent decisions, such as R (Wingfield) v Canterbury City Council [2020] EWCA Civ 1588 at [5] to [11].”

The judge added that these were “matters to which practitioners, their clients and litigants need to pay careful attention in accordance with CPR 1.3, both in their own interests and in the interests of all court users.”

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