UK Oil & Gas PLC (London AIM: UKOG) acknowledges today’s Supreme Court decision, where a three-to-two majority found that Surrey County Council (SCC) failed to request and consider an estimate of end-use carbon combustion emissions in its 2019 grant of planning consent for the Company’s oil production at Horse Hill.
The ruling now requires these emissions to be included in the development’s Environmental Impact Assessment (EIA) and assessed as part of the planning consent process.
As a result, the Company plans to work closely with SCC to promptly address this issue, either by amending the original 2018 planning application’s EIA or through a new retrospective planning submission, citing recent precedents in Surrey.
For a retrospective planning solution, the field’s historic and future expected production volumes would fall below the 500 tonnes/day (approximately 3,700 barrels/day) threshold that mandates an EIA for petroleum extraction developments.
It is important to note that the original 2018 planning submission and 2019 consent adhered to the 2017 Planning Act EIA Regulations and precedents, which SCC interpreted as requiring consideration of only emissions derived from the actual development. It was reasonably assumed that any end-use emissions would be regulated by other controls beyond the developer’s scope (e.g., at refineries or in-vehicle use).
This interpretation was upheld by several judges in prior hearings from 2020 to 2022, including Lord Justices Holgate (2020) and Lindblom (2021), and the Court of Appeal (2022).
The Company has consistently operated the field in full regulatory and legal compliance.
UKOG holds an 85.635% interest in Horse Hill and the surrounding PEDL137 license. Further updates will be provided in due course.
Stephen Sanderson, UKOG’s Chief Executive, commented:
“The Court’s rather perplexing retrospective ruling, which contradicts all prior judgments, highlights why the Company’s focus in recent years has shifted from oil and gas to developing strategic underground hydrogen storage, a crucial component of the UK’s future low-carbon energy system.
These projects have the potential to create significantly greater sustainable value for the Company and the UK than any small onshore field such as Horse Hill. They also contribute positively to Net Zero goals.
However, despite Horse Hill being a small part of our portfolio, it still plays a role in both the Company’s and the UK’s transitional energy mix. We look forward to collaborating with the local planning authority to address this retrospective change to EIA requirements.”
