The government has come in for criticism over fracking from an unexpected quarter this week. The Country Landowners Association (CLA) – a membership organisation for owners of land, property and businesses in rural England and Wales – has written to Energy Minister Richard Harrington MP, raising concerns about the lack of agreed protections for the owners of land where fracking occurs. The letter raises:
“… the insufficient progress that is being made to minimise the liabilities landowners will face as a result of shale gas operations taking place on their land. As shale gas moves towards commercial operations these risks will only increase…”
The CLA raise two particular concerns:
“First, there is no clear mechanism to properly address the risk of an operator becoming insolvent and being unable to fulfil its licence obligations to properly abandon a well. Although this risk may be small the consequences are significant as it would leave landowners facing significant costs to make a well safe to ensure it did not cause damage both to their land and wider environmental damage.
“The second concern is in regard to post abandonment and surrender of a licence when liability for the well falls to government. There does not seem to be any clear on-going mechanism for inspection or monitoring of wells in the longer term to ensure well integrity is maintained.”
Although the CLA adopts a conciliatory tone, it is likely that both of these concerns are greatly understated. In fact, it is very likely that fracking companies will fail – probably at very short notice – leaving landowners and taxpayers to clear up the mess. UK fracking appears to be following the same trend as the USA, where the amount of recoverable gas is greatly overstated in order to make the industry appear attractive to investors. However, outside a handful of sweet spots, companies only appear profitable if overhead costs (like safely decommissioning wells) are ignored.
The reason that government doesn’t have any mechanism for monitoring and inspection of abandoned wells is the usual one – nobody has thought about it. As has long been the case with abandoned mine working, central government will most likely pass the buck to local councils. In any case, by the time the full environmental costs of fracking are realised, someone else will be in government, so they can deal with it.
Perhaps when landowners realise just how high the risk from fracking really is, like so many schoolboys during the summer holidays, the fracking companies will be told to “GET OFF MY LAND.”