Licensing

The UK Department for Energy and Climate Change (DECC) issues Petroleum Exploration and Development Licenses (PEDLs) across the whole of the UK, as aspects of energy policy are reserved to Westminster.

PEDLs cover onshore exploration and development of shale gas and coal bed methane and monitoring of seismic activity. CBM also requires permission from the Coal Authority for access to coal formations.

According to DECC ‘applicants must prove technical competence, awareness of environmental issues and financial capacity before offer of a PEDL will be made’.

The license is made up of three different stages:

  • an initial exploration term that lasts for 6 years;
  • followed by a development term of 5 years;
  • and finally the production phase, for which licenses last 20 years.

Unused or unsuccessfully explored licenses are ‘surrendered’ so DECC can issue them again in the next round. Companies have to demonstrate they have met the requirements of each stage of the licenses to move on to the next stage and avoid having to surrender it.

There are currently six live PEDLs issued in Scotland:

  1. PEDL 133 – covers large area at mouth of the Firth of Forth, falls within several Local Authority areas (Stirling, Clackmannanshire, Perth and Kinross, Fife, Falkirk and West Lothian). Issued to Dart Energy Ltd (formerly Composite Energy) outwith licensing rounds in 2004.
  2. PEDL 158 – covers long stretch of coastal area in Caithness, northeast Highlands. Issued to Reach Exploration (North Sea) Ltd in 12th round licensing in 2004, now owned by Trapoil Plc. It looks like this license has been acquired to locate facilities to enable development of offshore field, not for unconventional onshore oil and gas exploration.
  3. PEDL 159 – covers area along Scottish-English border, falls within Dumfries & Galloway Council. Issued to Greenpark Energy Ltd in 12th round licensing in 2004. Licenses recently taken on by Dart Energy.
  4. PEDL 161 – towards the east nuke of Fife, within Fife Council area. Issued to Dart Energy Ltd in 13th round licensing in 2008.
  5. PEDL 162 – covers a large area in central belt, falling largely into North Lanarkshire Council, but also extending into East Dunbartonshire, Falkirk and West Lothian. Issued to Reach Coal Seam Gas Ltd in 13th round of licensing in 2008.
  6. PEDL 163 – in west Fife, within Fife Council area, stretching into Perth & Kinross and Clackmannanshire. Issued to Dart Energy Ltd in 13th round licensing in 2008.

The 14th licensing round was due in late 2012, but has been delayed until early 2013, and consultation on the Strategic Environmental Assessment for DECC’s licensing plans has ended. A vast area of Scotland, including the whole central belt, could be licensed in this new round.

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