Phase-Limited Planning Assessment in Hydrocarbon Exploration: Excluding Speculative Production Impacts

Introduction

Frack Free Balcombe Residents' Association v Secretary of State for Housing, Communities and Local Government & Ors ([2025] EWCA Civ 495) arose from an inspector’s decision to allow Angus Energy Weald Basin No. 3 Ltd. to carry out a 30-month hydrocarbon exploration and appraisal programme at the Lower Stumble site, within the High Weald Area of Outstanding Natural Beauty (AONB). The local mineral planning authority (West Sussex County Council) had refused permission on the ground that the scheme constituted “major development” in a protected landscape without exceptional circumstances. The residents’ association challenged the inspector’s decision by way of statutory review under section 288 of the Town and Country Planning Act 1990, and permission to appeal to the Court of Appeal was granted on four grounds concerning (1) the exclusion of future production harms, (2) policy selection (M7a vs M7b), (3) consideration of alternative sites, and (4) hydrological risk to Ardingly Reservoir.

Summary of the Judgment

The Court of Appeal (Patten, Singh & Holgate LJJ) dismissed the challenge. It held that:

The inspector lawfully confined his assessment to the exploration and appraisal phase and did not err by declining to weigh hypothetical harms from a future production phase.
Policy M7a (non-fracking development) applied because the application did not include hydraulic fracturing; Policy M7b was irrelevant.
The inspector properly applied the “exceptional circumstances” test in Policy M13 and the National Planning Policy Framework (NPPF) by assessing need, alternatives and environmental impact in the context of exploration only.
He did not err in fact or law over hydrological linkage to Ardingly Reservoir: there was no natural pathway and site-specific mitigation combined with regulatory permits eliminated any unacceptable pollution risk.

Analysis

Precedents Cited

Preston New Road Action Group v Secretary of State [2018] EWCA Civ 9: held that future production impacts may not be taken into account at the exploratory stage.
Europa Oil and Gas Ltd v Secretary of State [2014] EWCA Civ 825: confirmed distinct phases of exploration, appraisal and production in policy interpretation.
St Modwen Developments Ltd v Secretary of State [2017] EWCA Civ 1643: public law principles governing planning appeals.
E v Secretary of State for the Home Department [2004] EWCA Civ 49: established the test for an error of fact in judicial review.
Tesco Stores Ltd v Dundee City Council [2012] UKSC 13: principles on interpreting planning policy objectively.

Legal Reasoning

The court emphasised that planning appeals must be judged on the merits of the development before the inspector. Here:

The description of the proposal—exploration and appraisal with an extended well test—was precise and limited. Conditions forbade hydraulic fracturing, signalling that only non-fracking policy (M7a) applied.
National policy and the joint minerals local plan draw a clear line between “exploration/appraisal” and “production.” Following Preston New Road, future production phases remain hypothetical until the grant of separate permission.
The “exceptional circumstances” test for “major development” in an AONB requires an assessment of need, alternatives and environmental impact, but calibrated to the scope of the application. The inspector rationally concluded that alternatives outside the AONB were impracticable (the reservoir lay only in that area and prior capital expenditure made new drilling uneconomic).
On hydrology, the inspector relied on the hydrogeological risk assessment, the absence of a natural hydraulic link to Ardingly Reservoir, proposed containment measures, and the Environment Agency’s non-objection. Any indirect link via pumping from the River Ouse was purely theoretical and regulated under separate permits.

Impact

This ruling reaffirms and refines the principle that each phase of hydrocarbon development must be assessed on its own planning merits. It:

Clarifies that decision-makers need not speculate on the environmental harms of future production when considering exploration applications.
Confirms the proper application of local plan policies M7a versus M7b by reference to the operations described in the application, not to potential later developments.
Offers guidance on the “exceptional circumstances” assessment in protected landscapes, endorsing a flexible, context-sensitive approach to evaluating alternatives.
Reinforces the planning system’s deference to specialist environmental regulators on pollution control issues.

Complex Concepts Simplified

Statutory Review (s.288 TCPA 1990): A judicial review of a planning appeal decision by an inspector or Secretary of State.
Section 78 Appeal: The mechanism by which an applicant challenges a local planning authority’s refusal to grant planning permission.
Exploration, Appraisal, Production: Three distinct stages of onshore hydrocarbon development. Exploration locates a resource; appraisal tests its viability; production extracts it.
Major Development in an AONB: Triggers a high hurdle—permission only in “exceptional circumstances” and where in the public interest, requiring a three-point assessment under NPPF paragraph 177.
Policy M7a vs M7b: M7a covers non-fracking hydrocarbon development; M7b applies only where hydraulic fracturing is proposed.
Environmental Permitting Regime: Separate regulatory controls (Environment Agency, HSE) governing pollution and well integrity, assumed by planning decision-makers to function effectively.

Conclusion

The Court of Appeal’s decision in Frack Free Balcombe Residents’ Association solidifies the jurisprudential divide between exploratory/appraisal and production phases in hydrocarbon planning appeals. By confirming that only the benefits and harms of the applied-for phase fall to be weighed, the judgment ensures predictability and coherence in decision-making, prevents speculative harm assessments, and upholds the principle that planning permissions are phase-specific. It also underlines the importance of applying local plan policies strictly in accordance with the terms of an application and defers detailed pollution risk evaluation to specialist regulatory regimes. This precedent will guide both applicants and objectors in structuring future planning cases in protected landscapes.