Industry

Landowners accuse government of “major failing” over liability for fracking

pnr 170822 Ros Wills5

Cuadrilla’s Preston New Road shale gas site, 22 August 2017. Photo: Ros Wills

Landowners are demanding speedy action from the government about who should deal with the consequences if something goes wrong with fracking.

The Country Land & Business Association (CLA), which represents farmers, landowners and rural businesses, says the government has not made sufficient progress to tackle the risks of long-term liability.

CLA logoIn a letter to the Energy Minister, Richard Harrington, the CLA wants the government to give urgent reassurances over the risks of long-term costs to private landowners.

The CLA’s Deputy President, Tim Breitmeyer, said:

“Our members take a long-term view of land management and will continue to run businesses using land with shale gas developments on them long after an operator has left a site.

“It is critical that the right protections are in place to ensure the long-term integrity of well sites and remove any risk to future use of affected land.

“It is greatly concerning that despite the acknowledged risk, the Government continues to encourage the industry to increase the number of sites in development without an adequate solution to liabilities being in place.

“For a government whose stated objective is to establish a world leading shale gas industry in the UK, the lack of clarity on these important issues is a major failing.”

The CLA said it had consistently raised the concerns of liability for fracking operations with ministers, officials and the industry over the past four years.

The organisation said all had acknowledged the liability issue needed addressing. But it added:

“To date, no solution has been provided to private landowners despite the continued growth of the UK shale gas industry.”

The CLA says there is:

  • No clear mechanism to address the risk of operators becoming insolvent and not fulfilling licence obligations to abandon a well
  • No clear on-going mechanism for post-abandonment inspector or monitoring of wells to ensure well integrity is maintained

Frack Free Lancashire

Barbara Richardson, of Frack Free Lancashire, said:

“Farmers and landowners are quite right to be concerned about the long-term impacts of fracking on their land. They should be concerned about the short-term impacts too.

“So far, the government and the oil and gas industry have failed to reassure landowners and the general public that fracking is safe.

“Public opposition to this industry is growing daily as more and more communities are threatened with fracking. It is certainly not a foregone conclusion that fracking for shale gas will ever progress to full scale production. It is extremely costly to produce and has many environmental impacts.

“Farmers should certainly think twice before they sign up, as short-term gains may well be offset by long-term losses. Accidents can and do happen and who will pick up the bill?

25 replies »

  1. YES! This is of course the MOST VALID AND PRESSING concern. Liability and liability 2-100 years after the frackers or quasi-frackers depending on definition, are gone. Insurance policies need to be in place with multi-million pound coverage, just as other land developers are required to have, bonds need to be posted, and government needs to back (ie. mandatory market price for land/home without defects)
    any insolvent energy exploration company for years to come. There are also issues of which companie(s) to hold liable since the company that drills is not necessarily the company that treats chemicals, or provides them, or seals the well if disused. We don’t want a system where fingers are pointed but urgent compensation not delivered. Such as the case where thousands of people in Houston THOUGHT they were covered for flooding but did not take out extra hurricane coverage, and as such are now destitute. Addressing these concerns, in a guaranteed way where the coverage becomes an item on the deed and registered in the land registry, is of vital importants to ensure transferable title for future generations.

    Indeed, if there is nothing to worry about as these fly by night companies such as Angus Energy, UKOG and others like david leningas declare, then they will have NO PROBLEM providing comprehensive liability coverage for each location. If the liability risk is TOO HIGH, th en this is saying that a very high threat exists and perhaps drilling should be prohibited. This is the cost of doing business people.

    • Cindy

      I think a better comparison is between Macondo and fracking related insurance issues, than a natural phenomenon such as a hurricane, or just flooding from heavy rain.

      Another example would be UK coal industry damage ( subsidence ) and how that is being dealt with.

      Does anyone out there have any other comparators for industrial claims and how they were or were not resolved?

      So who paid out to whom for Buncefield I wonder?

  2. The answer for concerned landowners is to ‘Lock the Gate’ until they are sure that such issues have been satisfactorily dealt with. Of course, this doesn’t work too effectively if next door’s landowner is happy to take the O&G company money. This is what happened in Australia when farmers and landowners came to the conclusion that the damage from the industry would leave them and their children with nothing in the future. They ‘Locked the Gate’ and joined in an unlikely alliance with environmentalists and ordinary concerned people in sufficient numbers to overcome the combined industry, govt and police offensive. Unfortunately, much of the damage was already done, and seen to be done, before that reaction.
    Of course, it won’t happen here because we’ll have gold standard regulation, accidents and incompetence won’t happen, the industry won’t cut corners to save money and perhaps the DNA of the people involved will be different so they won’t be remotely mercenary.

  3. I assume that insurance policies will be for specified risks and will expire when the annual premium stops being paid? Pay-outs will also depend entirely on hard evidence and proof, which will be nigh on impossible to get, particularly when the source is securely fenced off and much of it between 0-2 miles underground. With that in mind, it’s most enlightening that both govt and industry, ably backed by planning authorities, appear to be very enthusiastic to avoid bonds, which would make sure the money was there in advance to deal with such eventualities. If the risks are so low and so well regulated, it makes you wonder why there is such reticence to insist on bonds.

  4. Cindy-you keep repeating fake news. There is no fracking intended by Angus, or other operators in the Weald.

    It has been explained to you repeatedly, yet you persist, so your motivation is clear.

    In terms of the sites where test fracking is planned there are perfectly adequate provisions to cover future liabilities. The industry has already stated if these test sites develop to further locations and companies, then further provision will be required and they are conscious of that, and will make the necessary provision, if and when it is required.

    Certainly one for the future, but not a big issue at the moment, even if the antis would like to make it so.

    Seems a bit odd that after all the speculation that this industry would not get off the ground as it would not be economic, there now seems to be an acceptance that it will. Positive step forward.

  5. Quite right that the landowners and small business should be making their voice heard. What about the homeowners who have had their property devalued because of this threat? Again, north of the London scene doesn’t seem to be of any concern to the powers that be. Come on you legal beagles (including ambulance chasers), as the drilling spreads across the country, more homeowners will be directly affected, there should be some rich pickings for you to take on this legal argument.

  6. Shouldn’t the landowner be factoring in the long-term risk in the rental s/he charges the fracking company?
    Or insisting on a restoration bond when granting access to the land.
    Sympathy with landowner only goes so far, given they are taking the frackers’ money to facilitate fracking in the first place!

  7. Robert-I think you have conveniently missed the point that as and when the drilling spreads across the country (another one admitting it will progress) the industry has made it quite clear they will deal with this element. I don’t suppose there will be cover for locals regarding the UK Spaceport just yet!

    • Martin, The problem of house devaluation near drilling /fracking sites is here now. Quadrilla don’t have a penny to their name, you say they will deal with this element. Tell them to get on with it because it’s already happened. We don’t need apologists trying to cover these companies with no collateral to pay for the damage they most certainly will do to the environment and property values.

  8. Take a look at Wytch Farm locality in terms of property values, Robert. Your statement is fake, using that as an example-the largest on shore oil field in Europe, and one of the most expensive property areas in the UK.

    It is the fear element at PNR that may temporary depress property values, and as it is the nonsense being spread by the antis., you are the ones who should put your hands in your pockets. Over recent months it is the antisocial activities of the antis that has created an adverse impact upon the local environment, and it is recorded.

    I think you will find Cuadrilla is paying money to the local community. Maybe they would see this as a priority for distribution, but then I have seen posts from some antis that this money should be rejected!

    • Martin, I am a local and a pensioner living near the preston new rd site, what is your profession and if I may also ask who do you work for? This information will help me understand your resoning.

    • Malcolm

      WYF is indeed a poor comparison to any plans to have a conventional CBM field in Somerset. Using the Frack word helps spook people, but that is not the big issue for CBM. Well density and water management are key concerns, you can bet cavitation with its ( as shown in a picture ) mini blowout is a definite no no in the UK.

Add a comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.