Question

To ask the Secretary of State for Energy and Climate Change, what contingency plans his Department has in place for clean-up after fracking activity in the event that small fracking companies go bankrupt or refuse to take responsibility for any necessary cleaning.

Prior to awarding a licence, the Department of Energy and Climate Change (DECC) assesses whether a company has adequate financial capacity for its planned operations, including decommissioning. DECC further checks at the drilling and, where relevant, production stages that sufficient funding and appropriate insurance is in place.

If a company causes damage, harm, or pollution to the environment, companies can be required to remediate the effects and prevent further damage or pollution.

Environmental regulators and planning authorities have powers to require upfront financial bonds to address risks surrounding environmental damages, wherever they deem this necessary. In addition, DECC has been discussing with the industry’s trade body, UK Onshore Oil and Gas (UKOOG), industry arrangements to ensure that site restoration and aftercare will be ensured, even in the event that the operator goes out of business.