Industry

“Fracking will struggle if it doesn’t solve landowner liability for clean-up”

190404 WEETF Tom Barosak-Harlow (2).jpg

The shale gas industry was warned today it must tackle the problem of who pays for decommissioning if the operator goes out of business.

The Country Land and Business Association (CLA) told an industry seminar that landowners would continue to have misgivings about fracking until the issue of liability for costs was resolved.

The CLA’s director of external affairs, Tom Bartosak-Harlow, said:

“As the industry does grow, they are going to struggle without finding a solution to this problem.

“The industry needs friends such as landowners.

“This will work much easier and much quicker if landowners are on side.

“Without a reassurance across the board that in all circumstances all costs will be covered, landowners will continue to have reservations about their involvement in fracking.”

Mr Bartosak-Harlow said the government had acknowledged that landowners could be liable for costs by default. The Department of Business, Energy and Industrial Strategy recently reported to a Public Accounts Committee investigation that regulators could pursue landowners for costs.

Mr Bartosak-Harlow said:

“I have sat in countless meetings with people in government and from the industry to discuss and to try and find a way forward with ministers and civil servants.

“We are yet to see a solution brought forward.”,

He said landowners thought in much longer terms than many businesses. They didn’t want their grandchildren to have problems that were the consequence of decisions taken today, he said.

But he added that many landowners saw business opportunities from renting land for shale gas development. He said:

“With the right protection in place, a greater number of landowners will be willing to take part in the future as the industry grows providing business opportunities for them and also providing shale gas operators with more sites and the industry will grow.”

  • Bartosak-Harlow was speaking at the Westminster Energy, Environment & Transport Forum keynote seminar on Unconventional oil and gas market in the UK – planning changes, environmental regulation and tackling the scale-up challenges

Reporting from this event was made possible by individual donations from DrillOrDrop readers

37 replies »

  1. The cost of land is not expensive when you consider that industry supporters state that it would cost £300,000,000 to bring just 1 multi well site on line. Yet the industry is leasing land. Either the industry is trying to save money by making poor offerings to lease or they don’t want to be responsible for long term environmental damage.

    • A landowner in Lancashire who was approached by the industry told me that what was offered was very little when considered against the short and long term value of his business and property. It didn’t take him long to decline their offer. Landowners are shrewd business people.

    • £300,000,000 – total rubbish – we’ll get costs down to less than £10,000,000 and possibly as low as £5,000,000

        • Industry says £333,000,000 whilst anti antis say £5,000,000.

          You really should get together and try and get on the same page.

          • I think Judith overlooked the multi-well bit. 5-10m per well sounds about right – for medium lateral wells. As they’re talking now about making 30-40 well pads, and if they’re super-laterals 2-4 miles long each – as suggested by our old sparring partner Fibonacci (who morphed into ‘let-them-eat-kale’ because he probably didn’t like being called Fibs) … then, along with all the plant and pipelines, the upper figures look about right too.

            • Hands up – I admit that I though he was talking about one well. The value of super laterals is still open to debate. The service companies like them because it makes them more money but I’ve seen figures suggesting that going over around 1.5 km goes is beyond the point of diminishing returns. Indeed, a few years ago a famous fracker from the states told me that often 70% of the production comes from the fracks closest to the heal but that may have changed.

              • “Hands up – I admit that I though he was talking about one well”

                I wrote,.

                “£300,000,000 to bring just 1 multi well site on line”

                So you are now trying to suggest that you thought I meant £300,000,000 per well meaning the PNR site would cost £1200,000,000 or a 10 well pad would cost £3000,000,000.

                I presume you must have been familiar with the EY report. Everyone else was.

                • Refraktion – I’m very much a detailed person when details make a big difference. One certainly doesn’t get paid as well as I do without being good at details when I need to be.

          • That breakdown looks interesting John – it shows it (that £333m costing) for a 10 well pad. The diagram shows insanely short laterals as if it all happens directly beneath the pad(s).

            • Phillip, there is no way that costs will be £330 million for a ten well pad – you could drill ten wells offshore for that.

            • De-Refraktion John: You like Jono are very angry people, You are so interested in who you really are nonsense, you tried it with me.
              Come on do a Batman and unveil yourself!

              • LOL – Your pals know exactly who I am. I make no secret of it, but I’ll tell you what – I’ll show you mine if you’ll show me yours.

                You first if you aren’t scared. Off you go.

                • So why the De-fracktion?, Do to know its actually rather funny .
                  A Refrac is a process once a well is underperforming and requires stimulation there is a promising avenue to enhancing recovery, and of improving PROFITABILITY of shale oil and gas resources, its called a Refrac!! We could rename it a Refraction!

                • Not keen on saying who you really are then?

                  Of course I know what a “refrac” is. It would be HILARIOUS to call one a “Refracktion” wouldn’t it? Oh no , hang on …

                • Defunction:

                  Oh of course you do know what a Refrac is!!!, Im sorry thought with your extreme experience in the Oil and Gas Industry, as I’m sure your are very aware they Refrac all the time, its called getting the most out of your investment without having to drill more wells. Production = Employment = Tax = A safe environment to live in. What would you do without energy,
                  What exactly are your professional qualifications in this industry?

                • Eli-Goth:

                  Just call me Batman, because Robin knows who I am!

                  The funny world of the super hero. Oh, sometimes I do feel old.

  2. One thing is for sure, it should not be the tax payer. If landowners willingly enter into a contract with a fracking company for financial gain then either companies should provide a significant bond upfront paid into an escrow account or similar to cover the risk of going bust and for long term monitoring and future problems or the landowner must be held liable. Liability must rest with the parties to the contract and pass to successors in title. Those entering into contract with a fracking company should, as with all interests in land, consider the long term implications.

    • Quite right KatT. It certainly shouldn’t be the tax payers that pay. The CLA’s Mr Bartosak-Harlow said the BEIS had recently reported to a Public Accounts Committee investigation that Regulators could pursue owners for costs.
      Failing costs being recovered from the companies or their insurers, the landowners would be the only ones who should pay. Otherwise the Regulators who are, in effect, employed by the tax payers, would be claiming from themselves.
      On a further point. At present, landowners do have some choice on whether they wish to participate in this industry. If commercial scale fracking becomes an NSIP, their land could be acquired compulsorily. It would then be very unfair for them to become liable for costs if things went wrong. But would it be the case that because the government had made the sites an NSIP, it could be argued that the government, or rather the tax payer, was morally liable and thus let the companies off the hook?

      • But don’t the tax payers pay the local constabulary and hence they control and have to put up with rebellion activists! Am a a Tax Payer and i don’t agree with outright aggressive and vile slow walkers, truck surfers and fanatically called peaceful protesters. But we pay for it, please tell me what the difference is paying for clean up or the control of a ‘peaceful protest’!

        • Eli-Goth whether you like it or not, the right to protest peacefully is thankfully still a legal human right and as such the police have a duty to facilitate this. Cleaning up a contaminated or desecrated environment should a fracking company not do so, for whatever reason, is not the duty of the tax payer.

  3. Landowners are generally pretty astute and can obtain plenty of contract advice where required.

    Certainly this is an issue that needs focus upon. Equally, rewards for landowners will need the same if/once they become clear. Pretty difficult to finalise the overall picture until risk/reward can be detailed to the landowner. Royalties have been spoken of and if they develop, may become part of the mix. Sirius Minerals seem to have recognised the value of that for local engagement and it would be surprising if the frackers don’t, once they have facts to offer.

    • “Landowners are generally pretty astute and can obtain plenty of contract advice where required.”

      Er quite Martian – I think that is the point being made

  4. You think, therefore it is!

    You thought it was a good bit of advice to go for a diesel. Strange how reality has a habit of getting in the way.

    As I stated the other day when some nasty comments were being made about a lady and her qualifications, I am just old fashioned enough to evaluate competence by content. Was there any? Oh yes-“certainly this is an issue that needs focus upon.” Good job someone is making a point.

    • Well what do YOU think was the point there then Matron?

      The diesel thing is getting a tad boring now.

      If we are supposed to evaluate competence by content what on earth should we make of your Collywibble 😂

  5. I shall leave that to others to judge reaction.

    Question mark rather than an emoji. Come on, do it as well as dictate it. Oops, back to the diesel.

    But you are not alone. Interesting comments regarding that from the hauliers recently targeted by the “magnificent” seven. So, it may be boring to you, but others find it quite revealing. Same scrutiny even back to the Newbury bypass fracas. Only surprising thing is how often that scrutiny reveals-well, what it reveals.

  6. Good to hear that you’re paid to troll these sites on behalf of the fracking industry, Judith. Your comments will be therefore taken as spin from the pro-fracking lobby.

    • Ellie – typical of anti-frackers – anyone who has a different opinion to themselves must be paid to have that opinion. As a matter of fact, the reason I join this debate is that I don’t want to see fracking go the same way as GM goods – stopped simply because people who have no background in science think it’s a danger when clearly it’s not

Leave a Reply

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.