Question

To ask the Secretary of State for Energy and Climate Change, what liabilities regime is in place to cover the costs of (a) drill site remediation and (b) post-closure contamination of local acquifers by companies drilling for shale gas using hydraulic fracturing in cases where the company goes bankrupt or otherwise ceases trading after closure of the fracking site.

When operations finish, the licensees are responsible for safe decommissioning of the well(s) and for restoring the well-site to its previous state or a suitable condition for re-use. The Environment Agency also requires a site condition report to be submitted by the operator, demonstrating that the site is in a satisfactory state before allowing the operator to surrender its environmental permit.

If environmental damage occurs then, in accordance with statutory requirements and government policy, remediation of the damage will be dealt with under the main regimes for dealing with contamination. These are Environmental Damage (Prevention and Remediation) Regulations 2009 and Part IIA of the Environmental Protection Act 1990. These regimes provide for the remediation of environmental damage and contaminated land (including water), and they apply to the extraction of both petroleum and deep geothermal energy.

The petroleum licence issued by DECC enables the Government to ensure that funds are available to discharge any liability for damage from activities under the licence. DECC accordingly assesses, before any petroleum licence is issued, whether a company has adequate financial capacity for its planned operations. DECC also checks at the drilling and, where relevant, production stage that the company has sufficient funding and appropriate insurance.