Fracking: Insurance

Department for Business, Energy and Industrial Strategy written question – answered on 6th July 2017.

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Photo of Greg Knight Greg Knight Conservative, East Yorkshire

To ask the Secretary of State for Business, Energy and Industrial Strategy, if he will require shale gas exploration companies to (a) take out insurance, (b) enter into a bond or (c) take other steps to ensure that they are liable for any future costs associated with maintaining exhausted or abandoned shale gas wells.

Photo of Richard Harrington Richard Harrington Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

The central aim of the regulatory framework is to ensure wells are made safe so that they can be decommissioned with no need for on-going attention.

Each shale gas licensee (and there may be more than one for each licence) is responsible for the well. 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 operator is required to design and construct an oil and gas well with a view to its safe decommissioning. The operator is also required to provide a notification to the Health and Safety Executive (HSE) prior to decommissioning and abandonment of the well. The notification and subsequent weekly operations reports, submitted by the operator, allow HSE inspectors to scrutinise the activity to ensure that the well is being decommissioned and abandoned as required by the Offshore Installations and Wells (Design and Construction, etc.) Regulations 1996. This requires all oil and gas wells to be abandoned in such a way that there can be no escape of fluids from the well or from the reservoir associated with it, so far as is reasonably practicable.

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