Horse Hill judicial review key for oil and gas drilling in UK: Bracewell LLP

A UK judicial review into oil drilling by UK Oil & Gas (UKOG) in Surrey could have wider significance for the country's fossil fuel extraction plans, lawyers at Bracewell LLP said in a June 20 briefing on the energy trilemma and legal disputes.

On June 21-22 the Supreme Court is to consider whether it was unlawful for Surrey County Council not to require UKOG to provide an assessment of downstream (scope 3) greenhouse gas emissions from products resulting from the developer's approved plans to drill four new oil wells at Horse Hill, Surrey.

"It could be a really important decision because it's the first time the Supreme Court will look at this issue and it comes ahead of separate judicial reviews in respect of the government's 33rd oil and gas licensing round and its approval of West Cumbria Mining's coal mine," Bracewell Partner Robert Meade said.

A successful challenge over Horse Hill could also encourage challenges to be brought in respect of future approvals of other fossil fuel production and storage projects, Meade said.

"The time limit for an appeal on the re-opening of Centrica's Rough Storage Facility has passed, but any future plans to expand or open new storage facilities could be challenged, much as the Islandmagee storage project in Northern Ireland is currently being challenged," he said.

Surrey Council granted planning permission to the Horse Hill development in September 2019. The appellant, Sarah Finch, applied for judicial review of the decision on behalf of the Weald Action Group. Her claim was unsuccessful before the High Court and the Court of Appeal, and now goes to the Supreme Court.

Net zero challenge

Bracewell Partner John Gilbert noted the general rise in litigation relating to corporate net zero commitments, with Client Earth's failed attempt to bring a derivative action against oil and gas major Shell in the UK offering a counterpoint to the Hague District Court's May, 2021 judgment ordering Shell to reduce its CO2 emissions by 45% by 2030. Shell is appealing this.

In May this year the High Court of England refused permission for Client Earth's lawsuit against Shell's net zero strategy to proceed, saying its evidence did not support a prima facie case "that there is a universally accepted methodology as to the means by which Shell might be able to achieve the targeted reduction referred to in the ETS [Shell's energy transition strategy]".

"It is possible that, with different evidence, the court could have reached a different decision. But that seems unlikely at this stage," Gilbert said.

While the prospect for bringing derivative actions in the UK seemed limited for now, this could change over time "if greater consensus emerges over committing to science-based targets and the methodology for achieving them," Gilbert said.

Consequently, companies that fell behind the climate goal trajectory they had set for themselves, or fell behind what others were doing, would be more open to being challenged, he said.

"Many have suggested that some companies are already adjusting their net zero commitments and taking a step back from the commitments previously made," Gilbert said.