Regulation

Council agrees £160,000 restoration fund for Kirby Misperton fracking site – “deeply worrying” say campaigners

1711 KM2 KMPC.jpg

Drone picture of Third Energy’s Kirby Misperton fracking site in North Yorkshire. Photo: Kirby Misperton Protection Camp

Opponents of Third Energy’s plans to frack in North Yorkshire have criticised a site restoration fund as inadequate.

The fund, agreed between Third Energy UK Gas Ltd and North Yorkshire County Council, has been set at £160,000. It is designed to pay for the restoration and after care of the site at Kirby Misperton if Third Energy went out of business.

North Yorkshire County Council said in a statement:

“The monies seek to secure the works identified within the approved Restoration Plan which is available to view by clicking here.

“The works identified are considered to be reasonably covered by the monies secured by legal agreement for the purpose of securing the proper restoration of the site to original condition as existed prior to the development being undertaken.

“The bond does not cover the sub surface issues as these are matters for other agencies.

“Restoration does not fall to local residents. We have the bond in our account now and it will remain there in the event of a problem with restoration on site.”

The campaign group, Frack Free Ryedale, described the level of the fund as “deeply worrying”.

The Third Energy group is 97% owned by Barclays Bank. But the financial status of Third Energy UK Gas Ltd is unknown because the company is more than two months late with filing its accounts for 2016. The most recent publicly-available figures showed a loss of £3.8m. DrillOrDrop report

The company is currently waiting for approval from the Energy Secretary, Greg Clark, to frack the KM8 well.

Russell Scott, of Frack Free Ryedale said:

“The news that North Yorkshire County Council has allowed Third Energy to frack at Kirby Misperton and the only safety net in place should they go bust is a deposit worth a minute £160,000 is deeply worrying.

“Yet again NYCC has allowed Third Energy to ride roughshod over our community and have failed to put in place adequate safeguards should Third Energy go out of business.

“The financial stability of Third Energy is yet unproven because the fracking firm has failed to publish its company accounts on time (yet again) and with their parent company based in the offshore tax haven of the Cayman Islands there is genuine concerns that if something did go wrong at KM8 the local residents could end up dealing with the clean-up should Third Energy disappear.

“As it stands now £160,000 probably wouldn’t cover the cost to repair the potholes in the road caused by Third Energy’s HGV’s let alone a contaminated well site.”

Mr Scott added:

“We urge the Energy Secretary, Greg Clark, to step in and refuse fracking consent until Third Energy can prove it is financially stable and adequate safeguards are in place.”

Legal agreement

KM8 Third Energy aftercare deposit

Extract from legal agreement on fund for restoration and after care

The arrangements for the restoration fund are set out in a legal agreement, known as a Section 106. (Link to pdf file here)  The agreement requires Third Energy to pay £160,000 to the county council not less than five working days before the start of development.

The council will hold the money, known as a deposit, as a financial commitment required as a condition of the planning permission granted in May 2016.

The amount of the deposit will be reviewed under the agreement every five years.

The council will repay the money 12 months after the completion of the restoration works.

“Failure to secure long-term protection”

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Campaigners outside the HIgh Court for the judicial review hearing in November 2016. Photo: DrillOrDrop

A year ago, Frack Free Ryedale and Friends of the Earth argued at the High Court that North Yorkshire County Council should have required Third Energy to pay a bond, as opposed to a deposit, as part of the planning permission.

Their barrister, David Wolfe, said the council had failed to secure long-term protection against environmental damage.

But North Yorkshire County Council and Third Energy said a bond could not be required of the company in these circumstances.

Nathalie Lieven, for Third Energy, told the court the risk that Third Energy would not be able to deal with a pollution problem was “infinitesimal”.

The council’s barrister, Sasha White, told the court the deposit scheme would address the concerns of objectors.

He said the level of financial commitment would be a planning judgement for the council and would depend on the detailed scheme for restoration.

The judge at the case, Mrs Justice Lang, suggested: “This will not give anyone much comfort.”

She said the planning application had been subjected to detailed scrutiny through a public consultation but there would be no scrutiny by the public of the documents, such as the detailed restoration scheme, submitted to satisfy the planning conditions.

  • The Section 106 agreement is on the North Yorkshire County Council website (link here). There is also a letter from the council to Third Energy’s consultant which confirms that the negotiation of the agreement has not been made public because it is “non-disclosable under legal privilege”.

10 replies »

  1. This is, in terms of contaminated land, a heavily contaminated site. The cost of remediation relates to the standard of intended future use. So it follows, it is more expensive to clean a contaminated site to allow say residential development compared to a clean up for an industrial development. To restore this land to future agricultural use will require a high standard of remediation and £160,000 is a wholly inadequate sum. This begs the question who will be responsible and who will ensure the land is appropriately cleaned up? If Third Energy are only on the hook for £160,000 the landowner should be liable, not the tax payer. This goes to the very heart of the long term liability of having these wells in situ in perpetuity. This is why the CLA is very concerned. Not only is there the issue of remediation but also these wells may leak in the future and may require long term monitoring. It is interesting how this may affect the continued agricultural use of the land, the desirability of the land and therefore capital value. Then there is the scale. Third Energy, just one operator, has stated they would like to drill up to 400 wells in their licence area. This will result in significant long term implications for landowners. Even with the provisions in the Infrastructure Act, contamination issues, whether from the point of view of remediation or damage to adjoining landowners, will not be permitted to go untreated or unresolved. I predict the courts will be busy and will face some complex legal headaches.

  2. You see the problem is when you overuse certain language it begins to fade to nothing. The antis are definitely drowned out now.

    • What a poor and meaningless post. Do you really think that means anything, or contributes to the argument? Do you really think this enhances your standing as a commentator on this site????

      • I quite agree Mr Tootill, this is an enormous problem for landowners. The fact that the subsurface is not even included, when latent defects could occur many years after the site has been abandoned, is a disgrace. This is an issue that must be brought to public attention and the government lobbied to leave them in no doubt the tax payer will not pick up the tab. The government is very sadly mistaken if it thinks that the tax payer will pick up any clean up costs, as they have done with offshore. There is enormous opposition to fracking and overwhelming support for renewables, so subsidising this industry will not be acceptable.

  3. KatT raises some very valid points. Perhaps GBK could meaningfully address those specific issues. £160k would buy you a very small house in Ryedale. Are TE and NYCC seriously suggesting that a paltry sum like that is sufficient to: restore a substantial brownfield site, highly likely to be contaminated with both known and unknown contaminants from the fracking process; remove all traces of concrete and whatever else the wellpad is constructed of to return it to agricultural use; provide for any future costs incurred from leaking wells in the form of gas or frack fluid for the next couple of hundred years? Perhaps they would like to share the evidence for this amount being sufficient in the form a hard costings? After all, this is a bond to provide for the ‘just in case it happens’ scenario – before the usual suspects start ranting about it being ‘impossible to happen’. If that were the case, why has a bond been agreed in the first place? Talking of evidence, perhaps someone could explain how a company that repeatedly finds itself unable to meet reasonable deadlines for submitting annual accounts and is tangled in a web of tax haven based shell companies can guarantee to still be alive, kicking and solvent if things go wrong? I can’t imagine that £160k stretching too far, should the worst actually happen.

  4. Moan n groan all you like, fracking is coming to a doorstep near you very soon.
    And don’t worry it won’t bring the area down anymore than it already is.

  5. And that’s all the “argument” that GBK has to offer. Zero. S/he should at least be congratulated for boosting the anti-frackers’ case, I suppose.

  6. 160,000, astonishing, not even equivalent to the average house price in the uk!! gbk writes provocatively, with no empathy for people’s concerns, only trying to bait and upset people who care!! We see this behaviour in school playgrounds!!

  7. A year or two ago, I went to a talk given by John Humphrys, doyen of the R4 Today programme. I asked him this question: It’s 0815 and I’m just suffering another bout of ‘Today tourettes’, shouting at the radio ‘answer the question’ (or pehaps something more impolite) and thinking ‘there’s another 10 minutes of my life I’ll never get back’. Do you get frustrated John when all efforts to elicit an answer from yet another slippery govt minister fails miserably? He answered in the negative, adding that If the audience is intelligent and informed enough, they will read enough into the act of avoiding the question, or answering their own question instead to speak volumes.
    GBK’s response (and the silence from the other regular industry shills that miss no opportunity to comment) reminded me of that occasion.
    GBK’s comment ‘And don’t worry it won’t bring the area down anymore than it already is’ also needs expanding on. Please provide the evidence that a fully formed fracking industry in Ryedale and beyond will not severly depress the housing market and therefore prices (it already is in the vicinity of KM8), and that it will not damage the existing major industries of agriculture, tourism and horse racing. What evidence do you have GBK that the area is already down? It would appear you know little of the area, but do please enlighten us.

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