Is Fracking the Future?

The issue of fracking has received a huge amount of media attention and coverage in recent weeks and continues to divide the nation’s opinion. The process, which involves drilling into shale rock and pumping water, sand and chemicals into the ground, is opposed by many due to its supposed links with contamination of groundwater, pollution of air by leaking methane and seismic activity.  According to an independent government-commissioned report, two minor earthquakes in Blackpool back in 2011 were attributable to fracking, and this has served to antagonise opponents to fracking in the UK further.  

However, despite these concerns many others continue to advocate the process of fracking, claiming it to be a relatively robust and cost effective way of extracting natural fuel from the ground. The UK government continues to urge the country to ‘get behind fracking’ in a bid to ensure energy self-sufficiency for future decades.

So, how exactly does fracking work? At the most simplistic level, a mixture of water, sand and chemicals is pumped into ground. The subterranean rock then fractures under the increased pressure, allowing trapped gas to be released. The gas is then collected on the surface. The idea is not a new one and has existed in the US since the 1970s, yet has only recently been put into significant production due to technological advancements. As well as the UK, many other countries have also recently given fracking ventures permission to begin drilling in the search for the much-needed fuel we need to make our society function.

It appears that whichever technique is used, extracting fossil fuels from the land will always remain a contentious topic. Although we already have a number of current or approved fracking sites across Kent, Sussex, Staffordshire, Lancashire, Cheshire, Scotland and South Wales, as well as more in the pipeline, the future of fracking in the UK still remains uncertain. The South Downs National Park Authority recently successfully rejected drilling plans, so the presence of natural gas does not in itself point to the development of an imminent fracking site.

However, the unavoidable fact of the matter is that the need for an independent energy-supply is ever-increasing, particularly with fears growing of a Russian gas switch-off. Certainly, more research is needed to make fracking cleaner and safer and serious attention should once again be given to the development of new ways to harness renewable sources of energy.

Landmark Information Group’s Energy and Infrastructure report provides information on existing and planned energy developments, for further information email: helpdesk@landmark.co.uk

Author: Ben Furlong, Senior Consultant, Argyll Environmental

Mandatory energy surveys for all large businesses

The Government has recently issued its response to last year's consultation on the Energy Savings Opportunity Scheme (ESOS), together with regulations to enact the scheme and guidance for participants.  ESOS is being introduced as a result of Article 8(4) of the EU Energy Efficiency Directive which requires all non-SMEs to conduct energy audits by 5 December 2015 and every four years thereafter.  The official estimate, based on affected businesses reducing their energy consumption by a modest 0.7%, is that the net benefit to the UK over 16 years will be £1.6 billion.

Who is affected

ESOS applies to the private sector only.  Your business will have to comply if it is an undertaking carrying out business activity in the UK and at least one of the following applies:

•       It has 250 or more staff;
•       It has fewer than 250 staff but has an annual turnover exceeding €50m and a balance sheet exceeding €43m; or
•       It is part of a corporate group which includes an undertaking that meets either of the above criteria.

The timetable

ESOS runs in four year phases - any business/group that meets the above criteria on the qualification date for each phase has to participate in that phase.  The qualification date for Phase 1 is 31 December this year and participants have until fulfil their obligations by 5 December 2015.   All private sector organisations should therefore consider their size and group structure as at the end of this year and then, if they fall within the scope of ESOS, take steps to comply with the new requirements by the deadline.

ESOS obligations

There are four main obligations.  In each phase ESOS participants must:

• ·         Measure all their energy use for a continuous twelve month period;
• ·         Conduct audits covering all their main areas of energy consumption;
• ·         Report the fact that they have complied with the above by the compliance date; and
• ·         Maintain an ESOS evidence pack providing a full record of their compliance.

So far as it is reasonably practicable, an energy audit report must provide recommendations for any cost-effective energy efficiency measures that can be undertaken, and quantify the estimated costs

  

and benefits. There is no compulsion on the business to implement the recommendations but a director or equivalent has to confirm that they have been considered.

ESOS audits have to be (at the least) reviewed by a lead assessor whose name appears on an approved register indicating that he/she is suitably qualified and experienced.  An in-house lead assessor can be used, if available.  The BSI has just published a Publicly Available Specification on the competence of lead energy assessors.

There are alternative routes to compliance which will be relevant, in some circumstances, for businesses that operate certified energy management systems, or have had Green Deal assessments carried out, or Display Energy Certificates issued.  Also, ESOS-compliant audits that have been conducted since 6 December 2011 will count towards the Phase 1 requirements, so it may not be necessary to audit all of a business's main areas of energy consumption between now and December 2015.

Similarities with CRC

Many of the rules of ESOS bear some similarity with the CRC Energy Efficiency Scheme, which also runs in phases with a qualification date for each phase, but there are important differences.  This is particularly the case in the detailed rules concerning joint ventures, trusts, foreign-owned companies and group disaggregation.  Two important differences that will affect many ESOS participants are that transport energy usage has to be included, but landlords will be pleased to hear that they are not responsible under ESOS for metered supplies to their tenants. 

What this means

The Government expects that 9,400 large enterprises will have to comply with ESOS.  Many of these will already be carrying out regular energy audits across the key areas of their business, recognising that improving energy efficiency makes financial sense even in sectors that are not energy-intensive.  For these companies, the burden of compliance should not be too great.  The remainder have until early December next year to do what is necessary.  A good first step is to determine the boundary of the ESOS participant organisation by examining its corporate structure and then gather energy data for a 12 month period, remembering that the rules are different from those applying to the CRC scheme.  A tool such as Sustainability Sure is invaluable for such a task, and it will facilitate sharing the data with the ESOS assessor when the time comes too. 

Find out more about Sustainability Sure by contacting 

+44 (0)844 245 9958 or email sustainabilitysure@landmark.co.uk.

#FridayFun: The Fossil Fuel Four

You know a topic is high on the news agenda when it features in The Simpsons.   http://www.break.com/video/ugc/radioactive-man-killed-by-fracking-2562911 

Here 'Fracking Man' features alongside a number of other energy-related "super heroes"; all of whom are competing against one another to showcase which is the ultimate source of energy.

In all seriousness, fracking is an issue that we will be hearing much more about in the UK over the coming weeks and months due to Government releasing new proposals related to accessing land for shale oil and gas developments.

The new rules would essentially grant underground access rights that bypass the law of trespass for work that is 300 metres or more below the land’s surface.  The consultation period is open until 15 August – further information on proposals can be accessed from the Department of Energy & Climate Change website.  

For more details regarding Landmark’s Energy and Infrastructure Report, which includes details related to areas licensed for on-shore energy exploration and production, including those licensed for fracking, click here. 

Landmark Raises the Bar in the Sustainability Software Market

We're pleased to announce the launch of Sustainability Sure, a new platform brought to market via a strategic partnership with ManageCO2. An innovative environmental software development company whose mission is to make carbon, sustainability and energy management easy. 
 

Sustainability Sure is a new sustainability platform that meets the full requirements of the new (October 2013) mandatory carbon reporting for all UK incorporated and stock exchange listed companies. Uniquely, Sustainability Sure combines energy meter analytics, CRC compliance and reporting, GHG reporting and CSR in a single platform. It also conveniently enables companies to automate the data collection and data entry without any IT implementation. In addition the management information derived from Sustainability Sure delivers benefits beyond simply legislative compliance, such as enabling costs to be allocated to specific cost centres as opposed to rolling up to a general ‘catch all’ corporate pot. This platform therefore meets the needs of the Finance Director as well as the Head of Sustainability. Ultimately, Sustainability Sure is a comprehensive and highly intuitive sustainability platform.

We, as Landmark forged a reputation in the energy and sustainability market via their Carbon Counter product, launched in 2010, to help companies manage their emissions in light of the Carbon Reduction Commitment (CRC) legislation. Sustainability Sure now supersedes Carbon Counter.

Sustainability Sure is powered by the ManageCO2 software platform which is doubly accredited and independently tested by SGS, the world’s leading inspection, verification, testing and certification company, and the CDP (formerly known as the Carbon Disclosure Project). Thanks to this accreditation, Sustainability Sure is the only software solution that has been independently tested against, and meets, the international Greenhouse Gas Protocol and ISO 14064 (the international standard for environmental management) as well as DEFRA’s standards of 2012 and June 2013.

ManageCO2’s success stems from the fact that the software was purpose built to fit both the current legislative framework and also easily adapt to future legislation. This has resulted in a product that is seamless and straightforward in its day-to-day application.

David Mole, Business Development Director, Landmark Information Group comments:

“Sustainability Sure combines ManageCO2’s carbon, energy and sustainability software excellence with Landmark’s experience, highly regarded reputation, and excellent sales and marketing teams to offer a truly market leading product.”

Sustainability Sure has already helped a leading university better manage their emissions. As the platform automatically calculates certain exemptions which were valid in this case for the university, analysis showed that the university had in fact overpaid tax on its emissions.  This was flagged because of the way that Sustainability Sure works ensures that data is automatically entered and checked for errors, before generating an automatic report. This results in a far simpler and smoother process for the user.

Adrian Fleming, CEO and Founder of ManageCO2, said:

“Both Landmark and ManageCO2 have an aligned vision for the future of this sector, and this was a logical next step in the development of our relationship. It is a fantastic partnership, one which together makes us probably the largest global carbon and sustainability software provider in terms of client numbers, which currently is in excess of 200 companies with their 100,000 buildings stretching across all seven continents.”

Mandatory Carbon Reporting

By Victoria Joy, Consultant

The prospect of larger UK companies having to report their greenhouse gas (GHG) emissions has been on the cards for a while, but it has now become a lot more certain.  Draft legislation, the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013, was laid before Parliament on 10th June.  The regulations are subject to the affirmative resolution procedure, meaning that approval by both Houses of Parliament is required before they take effect, but this process is little more than a formality and is likely to be concluded soon. 

From 1st October this year, the new regulations will amend the existing directors' annual reporting requirements (as set out in the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008) to oblige UK quoted companies to include reporting on their GHG emissions.  This affects all UK incorporated companies listed on the LSE's main market as well as those listed on a market within the EEA or whose shares are traded on the NYSE or NASDAQ.  The requirement applies to each company starting from its annual report covering the financial year ending on or after 30th September 2013.

For the purposes of this new reporting requirement, GHG means the six Kyoto Protocol gases, namely carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride.  Emissions from activities for which a company is responsible and that are due to human activity must be reported, as tonnes of carbon dioxide equivalent.  The requirement applies only to emissions resulting from the combustion of fuel, the operation of the company's facilities and the purchase of electricity, heat, steam or cooling by the company for its own use, i.e. scope 1 and scope 2 emissions under the widely used GHG Protocol.  Transport emissions are caught (since they involve the combustion of fuel), but scope 3 emissions (such as those arising from supply chain activities and emissions from the company's products once they have been sold) are not. 

Any company that finds it is impractical to obtain the required information will not be in breach of the new regulations provided that its annual report states what information is not included and why. In practice, pressure from shareholders and other stakeholders is likely to make incomplete reporting under this "comply or explain" provision increasingly rare as time passes. 

There is no requirement for independent verification, but in an effort to eliminate "greenwashing" annual reports must state the methodologies used to calculate the emissions.  The company's auditors will have to carry out a very basic check on the reported information to assess it for consistency with the financial statements and their knowledge of the business.  Also, at least one intensity ratio must be included to express the company’s annual emissions in relation to its activities, such as tonnes of carbon dioxide equivalent per tonne of production, per 1,000 hours of operation or per £million of sales revenue.  This may make it easier to compare one company's performance with another's, as will the requirement that, after the first year's report, the previous year's figures must be included as well as the current year's. 

Defra updated its environmental reporting guidance this month (Environmental Reporting Guidelines: Including mandatory greenhouse gas emissions reporting guidance) to help UK companies subject to the new requirements as well as those organisations that wish to report voluntarily on their environmental performance.  It gives a single page corporate GHG report as an example, but companies are free to choose whatever format they like.  The guidance goes into detail on such matters as how to set about scoping the reporting requirement and deciding which methodology to use. 

Although the new regulations are made under the Companies Act 2006 and therefore only affect companies, some public bodies such as Government departments and local authorities are otherwise required, or are strongly encouraged, to report their GHG emissions.  There are overlaps too with existing emissions reporting requirements under the CRC, Climate Change Agreements and the EU Emissions Trading System.  The areas of overlap may increase in the future because, while only about 1,100 companies will be affected by the new reporting requirements for quoted companies from this autumn, the Government has stated that it will carry out a review after the first two years of reporting and then decide in 2016 whether to extend the requirements to all UK companies defined as "large", of which there are estimated to be between 17,000 and 31,000.