My Lords, I am always grateful to the noble Lord, Lord Whitty, for trying to help out the Government. I have listened very carefully and of course I recognise his concerns and those raised by the noble Lord, Lord Judd. However, as my noble friend Lord Jenkin very eloquently put it, there is already a lot in place that addresses the concerns raised by the noble Lord, Lord Whitty. The existing regulatory system covering onshore oil and gas is robust. We already have more than 50 years’ experience of regulating the onshore oil and gas industry. There are controls and regulations in place to ensure on-site safety, prevent water contamination, mitigate seismic activity and minimise air emissions.
While the Government are keen for shale and geothermal exploration to go ahead, shale gas development must be safe and environmentally sound. I agree with noble Lords that we need to be sure that we are responding robustly to the perceived concerns that the public raise. One of the central aims of the current regulatory framework is to ensure that wells are appropriately designed and operated, and that when operations cease they are properly decommissioned.
A petroleum licensee cannot search for, bore for or get petroleum without a petroleum exploration and development licence, the terms of which are in the model clauses set out in secondary legislation. All drilling or production operations, and the abandonment of any well, require the consent of the Secretary of State. In addition, there are regulators and controls
that can be relied on to minimise risk and any impacts associated with oil and gas activities. Those controls include conditions attached to environmental permits issued under the Environmental Permitting Regulations 2010 in England and Wales and the equivalent regime in Scotland, as well as safety scrutiny by the Health and Safety Executive.
The current regime, as it applies to shale gas, includes the management of mining waste and naturally occurring radioactive minerals, the scrutiny of well design and construction, the suitable restoration of sites, the protection of habitats and 10 different EU directives addressing environmental concerns. In addition, the Environmental Protection Act 1990 and the domestic Environmental Damage (Prevention and Remediation) Regulations 2009 provide for the remediation of contaminated land and serious environmental damage. This regime, together with the operators’ responsibilities under their licences and permits, is sufficiently robust to ensure that operators are required to remediate any damage or pollution to the environment.
If, for any reason, these controls were not enough—we have no reason to think that this would be the case because the UK has a well developed and very strong regulatory regime—and if any damage were to occur, in accordance with statutory requirements and government policy, remediation of the damage would be dealt with under the main regimes for dealing with contamination. These regimes are sufficiently robust to ensure that, if a company causes damage, harm or pollution to the environment, operators can be required to remediate the effects and prevent further damage or pollution. This is the same approach that applies to other industries, and we believe that the existing law is robust.
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As noble Lords rightly highlighted, the environmental regulators have powers to require upfront financial guarantees to address this risk in circumstances where they deem this necessary. In addition, mineral planning authorities can require a financial guarantee to cover restoration and aftercare costs, although this will normally be justified only in exceptional cases. The Government have also been working with the industry’s trade body, UK Onshore Oil and Gas, to ensure the development of a mutual industry scheme that would, where necessary, step in and pay for necessary remedial action in the event that the liable company is unable to do so. My department has powers that can be exercised to require membership of such a scheme, where one exists, or the provision of equivalent security by other means. This range of financial securities, along with the statutory regime for dealing with damage or pollution, provides the reassurance that taxpayers or landowners will not be left to foot the bill for liabilities.
Since the noble Lord, Lord Whitty, raised these concerns in Grand Committee last month, I have given this issue particular consideration. While I am confident that we have a strong regulatory system for managing liabilities, I have heard concerns regarding unintended impacts of the right to use deep-level land on landowners, specifically, the situation whereby a landowner whose land is accessed through our proposed legislation might face claims from third parties for
damage done by the operator. I have reflected on that and intend to bring forward an amendment on that issue.
I hope I have been clear on other issues that the noble Lord has raised. Given the reassurance that we already have a very robust framework in place—