Legal

Court date set for legal challenge over oil and gas clean-up costs

fracking KM Eddie Thornton

Fracking equipment at Third Energy’s gas site at Kirby Misperton in North Yorkshire in Autumn 2017. Photo: Eddie Thornton

A legal challenge against the oil and gas industry regulator will be heard at the High Court next month (July 2020).

The case, brought by environmental campaigner, Eddie Thorton, alleges that the Oil & Gas Authority (OGA) failed to recognise its legal duty to protect the public from clean-up costs.

It centres on the way the OGA dealt in 2019 with Barclays’ sale of Third Energy, which operates gasfields in North Yorkshire, including the potential fracking site at Kirby Misperton.

A High Court judge will decide whether the OGA properly considered the risk to the taxpayer that clean-up costs would not be met by the new owner, York Energy.

The hearing is due to last two days, on 14 and 15 July 2020, and will be by video conference because of the Covid-19 outbreak.

Mr Thornton said:

“The evidence submitted by the Oil & Gas Authority shows the regulator thought it did not need to consider the risk to taxpayers, despite its clear legal duty to do so.

“We have been granted permission by the Court to use additional expert evidence which shows that the OGA did not properly assess the financial capacity of York Energy before allowing the takeover.”

Under the sale agreement, the new owners of Third Energy Onshore Limited received £12m to “meet its known liabilities and provide it working capital”. This “let Barclays off the hook for the clean-up costs”, Mr Thornton said.

“The new expert evidence also shows that there is a real risk that the directors of York Energy will simply take those millions offshore and let the company fail, leaving taxpayers to clean up the mess.

“Instead of using its powers to ensure that the terms of the sale wouldn’t allow this, the OGA says that it isn’t even required to review the sale under their rules. Our legal team say this is a clear legal error.”

  • Mr Thornton has raised more than £13,000 to fund his case.

Other DrillOrDrop reports about the challenge

Legal challenge to Third Energy sale gets go-ahead as emails reveal ministers intervened in deal

Weekend Long Read: Lawyers seek answers on Third Energy sale

Anti-fracking campaigner files High Court challenge over oil and gas clean-up costs

7 replies »

  1. Another example of “Gold Standard” and “World Class” regulation of onshore oil and gas exploration?

    • If you require examples of industries not meeting “gold standards” and “world class regulation”, by not meeting planning conditions before commencing development, submitting documents to the local Council and the Scottish Government that were misleading and polluting the local water supply. Take a look at the onshore wind industry.

      https://www.scotcourts.gov.uk/docs/default-source/cos-general-docs/pdf-docs-for-opinions/2020csih17.pdf?sfvrsn=0&fbclid=IwAR33mTmM8UcqWt2l2qFUtwkEkVXv-I217vSSfV0uc5L_yBAwkp1Bjd-p-EM

      • John,

        The “clue” is in the name of the company “Community”.

        We spent several years fighting Community Windpower in the Forest of Bowland AONB where they made three applications starting with 20 then 12 and finally 10 off 125m turbines on peat moorland, all of which were refused, they appealed, we fought the Appeals, they withdrew at the 11th hour and they were found to be liable for our costs which they paid. We enjoyed receiving their money and had a great party. Even their own staff realised the location was totally inappropriate but greed for ROCs (the old subsidy system) drove the owners on. We then had to fight them to remove the meteorological mast which they wanted leave – that came down finally and I keep a bit which I picked up from the trash they left as a memento. They tried the same in Cornwall in an AONB at Davidstow and lost there also. Finally they pulled ourt of England. I am sorry to learn that they are still active in Scotland.

  2. John Mager

    Maybe yes, or maybe no, depending on how the court case goes.

    But the case is not related to exploration for oil and gas. It relates to the decomissioning of existing facilities rather than the seeking of new reserves.

    • Hard to understand the difference between decommissioning existing wells and a power station and the results of unsuccessful exploration.
      The core issue is clean up costs and the lack of the provision made for this.

      • Jon Mager

        Yes..provision of cash to cover costs of exploration wells may be an issue. However, Tinkers Lane has done well, as have many othet restored well sites around where i live.

        But the case above is not about decomissioning unsuccessful wells. Its about the actions of the OGA and potential clean up costs for production plant, pipelines and wells.

  3. You did ask a question in your first post, Jon. Yet, by your second post the question had gone and a statement is made!

    Not sure Mystic Meg would do any better, with the case being heard in JULY.

    Perhaps if you want to look at poor provision for clean ups, you should look at the EXISTING situation where discarded wind turbine blades are being added to landfill? Then if you want to check environmental costs there are the remains of a forest in Germany, if Mr. Musk has not managed to clear it all. If you want to look at health issues regarding mineral extraction, then perhaps look at all the health issues in young children in DRC handling a known carcinogen to earn a pittance that comes from unscrupulous buyers of cobalt. There are many more-ask those in St. Keverne in Cornwall how they would be sacrificed to build a lagoon in Swansea, and then there is ocean mining! Clean up costs? Perhaps wind and solar should have to carry a clean up cost for the nuclear back-up? “Green” energy? LOL.

    For a relatively fledgling industry, alternative energy seems to have a great deal of issues that it criticises competitors for. Mind you, that is the way of fledgling industries. But, after a period they do have to deal with the same issues out in the open.

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.