Town and country planning – Environment – Environmental impact assessment – Appellant applying for judicial review of respondent’s decision to grant permission to retain and expand existing oil well site and drill new oil wells to produce hydrocarbons – Application and appeal dismissed – Appellant appealing – Whether respondent required to consider effects of downstream emission of greenhouse gases from end use by consumers – Appeal allowed (by a majority)
The respondent local authority granted planning permission to the first interested party, on the Horse Hill Well Site at Hookwood, Horley, Surrey, to retain and expand the site (including two existing wells), and drill four new wells, for the production of hydrocarbons over a 25-year period.
An environmental statement assessed the greenhouse gases (GHG) that would be produced from the operation of the development, but did not assess the GHG that would be emitted when the crude oil produced from the site was used by consumers, typically as fuel for motor vehicles, after having been refined elsewhere.
The appellant applied for judicial review of the respondent’s decision contending that, under the Town and Country Planning Environmental Impact Assessment) Regulations 2017 (the EIA Regulations), which implemented Directive 92/11/EU (the EIA Directive) in the UK, the respondent should have carried out an assessment of the impact of GHG resulting from the eventual use of the fuel made from the oil extracted from the site.
The judge dismissed the application, holding that the combustion emissions were not within the legal scope of the EIA Directive and 2017 Regulations; alternatively, whether to assess the emissions was an evaluative judgment for the respondent, which had given legally valid reasons for its decision not to do so: [2020] EWHC 3566; [2020] PLSCS 234. The Court of Appeal upheld that decision (by a majority): [2022] EWCA Civ 187; [2022] EGLR 18. The appellant appealed.
Held: The appeal was allowed (Lord Sales and Lord Richards dissenting).
(1) The object of an EIA was to ensure the environmental impact of a project was exposed to public debate and considered in the decision-making process. The legislation did not prevent the competent authority from giving development consent for projects which would cause significant harm to the environment. But it aimed to ensure that, if such consent was given, it was given with full knowledge of the environmental cost.
Article 3(1) of the EIA Directive required the EIA to assess both the “direct and indirect” effects of a project on the specified environmental factors, one of which was climate. The express requirement to assess indirect as well as direct effects was clearly intended to emphasise the wide causal reach of the required assessment.
(2) No case law had been cited which sought to define “direct” and “indirect” effects. A natural way to understand the distinction was to define a direct effect of one event on another event as an effect which was not mediated by one or more variables. An indirect effect, by contrast, was one which depended on one or more variable intermediate factors that might alter the total effect observed. On that definition, combustion emissions were direct effects of the extraction of oil because they were almost entirely independent of any intermediate variables.
The EIA Directive did not impose any geographical limit on the scope of the environmental effects of a project which had to be identified, described and assessed when an EIA was required. In principle, all likely significant effects of the project had to be assessed, irrespective of where (or when) those effects would be generated or felt. There was no justification for limiting the scope of the assessment to effects which were expected to occur at or near the site of the project. The fact that an environmental impact would occur or have its immediate source at a location away from the project site was not a reason to exclude it from assessment.
(3) The fact the combustion emissions would emanate from activities beyond the well site boundary which were not themselves part of the project was not a valid reason to exclude them. An impact was not precluded from being an effect of a project by the fact that its immediate source was another activity that occurred away from the project site. It was in the very nature of “indirect” effects that they might occur as a result of a complex pathway involving intermediate activities away from the place where the project was located.
The process of refining crude oil did not alter the basic nature and intended use of the commodity. Given that the process of refining the oil was always expected and intended that the oil would undergo, it was unreasonable to regard it as breaking the causal connection between the extraction of the oil and its use.
(4) But that was not the position here. The oil produced from the well site would not be used in the creation of a different type of object, in the way that a component part was incorporated in manufacturing a motor vehicle or aircraft. Refining the oil was simply a process that it inevitably underwent on the pathway from extraction to combustion. Nor was there any element of conjecture or speculation about what would ultimately happen to the oil. It would inevitably be burnt as fuel. And a reasonable estimate could readily be made of the quantity of GHGs which would be released when that happened.
The project under consideration involved the extraction of oil for commercial purposes for a period estimated at 20 years in quantities sufficient to make an EIA mandatory. Further, it was not merely likely, but inevitable, that the oil extracted would be sent to refineries and that the refined oil would eventually undergo combustion, which would produce GHG emissions. Those emissions, which could easily be quantified, would have a significant impact on climate. The combustion emissions were plainly effects of the project.
(5) The fact the crude oil produced from the well site would need to be refined before it was used as fuel was not a valid ground for excluding the combustion emissions from the scope of the EIA. Still less did the need to process the oil at a refinery justify the conclusion that the combustion emissions could not as a matter of law count as effects of the project.
Accordingly, the respondent’s decision to grant planning permission for this project to extract petroleum was unlawful because the emissions that would occur when the oil produced was burnt as fuel were within the scope of the EIA required by law.
Marc Willers KC, Estelle Dehon KC and Ruchi Parekh (instructed by Leigh Day) appeared for the appellant; Harriet Townsend and Alex Williams (instructed by Surrey County Council) appeared for the first respondent; David Elvin QC and Matthew Fraser (instructed by Hill Dickinson LLP, of Manchester) appeared for the second respondent; Richard Moules KC and Nick Grant (instructed by the Government Legal Department) appeared for the third respondent; Paul Brown KC and Nina Pindham (instructed by Richard Buxton Solicitors, of Cambridge) made written submissions for Friends of the Earth Ltd, intervening; Ruth Crawford KC, Richard Harwood KC and David Welsh (instructed by Harper Macleod LLP, of Edinburgh) made written submissions for Greenpeace UK, intervening; Stephen Tromans KC and Ruth Keating (instructed by the Head of Litigation and Casework) made written submissions for the Office for Environmental Protection, intervening; Gregory Jones KC and Alexander Greaves (instructed by Ward Hadaway, of Newcastle Upon Tyne) made written submissions for West Cumbria Mining Ltd, intervening.
Eileen O’Grady, barrister
Click here to read a transcript of R (on the application of Finch) v Surrey County Council
