First NSIP refusal is successfully overturned as An Taisce appeals

This entry reports on the successful judicial review of the refusal of the Preesall gas storage project.

The Preesall judicial review is the third in a clutch of four judicial reviews of the first few decisions on nationally significant infrastructure project (NSIP) applications. This is the only application to be refused, although a couple have been rejected for examination.

The application was the first for a gas storage project, where salt caverns in Lancashire would be used to store gas. The panel of three inspectors recommended that it be granted, but the Secretary of State for Energy and Climate Change decided to refuse it back in April 2013.

The judicial review was launched by the promoters of the project Halite Energy (halite is the type of salt found in such caverns), on five grounds:

• the Secretary of State misunderstood the policy in National Policy Statement EN-4 on providing survey data;
• the SoS was wrong to be 'not persuaded' that Halite had complied with the NPS;
• the SoS was wrong to conclude that nothing or much less might be built;
• the decision was unfair to require geological information as a pre-requisite; and
• the SoS was irrational to conclude there was no convincing evidence on the size of the project that would be built, and hence its benefits.

On Monday, Mrs Justice Patterson, who also heard the Hinkley Point C nuclear power station challenge, issued her judgment. She decided that the Secretary of State had unfairly refused the application. The judgment can be found here, but here is a summary.

The judge agreed with the defendant, the Secretary of State for Energy of Climate Change on one thing: that there were really three grounds, as follows:

• was there a breach of natural justice in that Halite was treated unfairly?
• what is the proper interpretation of paragraph 2.8.9 of NPS EN-4?
• was the decision irrational?

Those aren't really grounds as such, but they can easily be converted into them.

On the first issue, it was about whether Halite had a 'fair crack of the whip' to rebut what the panel eventually concluded, and the judge decided that they didn't. The panel's report suggested three scenarios that each meant that less of the salt caverns would be able to be used, and between them reduced the available volume by over 50%, but Halite hadn't been given a chance to address them during the examination.

The panel also applied a test of 'beyond reasonable doubt' that the caverns were suitable, which didn't seem to come from anywhere. The judge concluded that this was the wrong standard of proof and it was unfair not to have a chance to comment on the reasoning that was adopted.

The Secretary of State's decision might have been able to correct the 'beyond reasonable doubt' test by saying it was wrong and didn't apply, but did not do so. Thus the decision was as unfair as the recommendation.

On paragraph 2.8.9 of EN-4, the second issue, both sides agreed that it says you must demonstrate the suitability of the storage areas for storing natural gas, but the SoS went on to argue it inclueds a requirement to assess the amount of gas that could be stored too. The judge disagreed with the last point, saying that capacity could be part of the assessment, but need not be. If the worry was the amount of visible surface infrastructure, this was already limited by the maxium number of caverns, and it had to be decommissioned if it turned out not to be needed.

On the third ground, the judge concluded that the decision was indeed irrational, noting that the SoS adopted the panel's (flawed) approach, yet reached the opposite conclusion, whereas surely this would have involved different reasoning.

The judgment doesn't say what happens next, which is an interesting question in itself. If the panel's recommendation was flawed as well as the Secretary of State's decision, does there have to be a new recommendation and a new decision? Does more evidence need to be gathered (e.g. Halite's rebuttal of the three scenarios the panel outlined) by re-opening the examination? We'll have to wait and see - first the Secretary of State will have to decide whether to appeal the judgment.

One for the record: the judge described the Planning Act examination thus: "The still relatively new examination process is both inquisitorial, iterative and learning."

When the first sentence on the first issue was "A central issue in the determination of the DCO was whether the benefit of the gas storage outweighed the visual impacts of the surface infrastructure" I thought 'whoa, that's not a great start', but in fact nothing turned on the apparent misstatement of the test in the Planning Act (it's all adverse impacts, not just visual ones).

Meanwhile, the Irish National Trust who launched the Hinkley Point C challenge have appealed Mrs Justice Patterson's judgment of their case to the Court of Appeal, lodging their claim on Christmas Eve (and so I'll forgive them for spelling 'affected' as 'effected', twice).

The appeal is on four grounds, all essentially that the interpretation of Article 7 of the Environmental Impact Assessment Directive (on transboundary effects) is sufficiently unclear on various points (e.g. does 'significant' include 'cannot be excluded'?) that reference should be made to the European Court of Justice to interpret it.

So progress of sorts is made on these two projects, but we're some way off being able to put a spade in the ground.