It is just as Waverley Against Drilling (amongst others) has been saying for the last year to Surrey County Council – the Oil and Gas Authority says it does not have responsibility for securing planning restoration of oil and gas sites when they are decommissioned. The OGA says that IS the responsibility of the “Minerals Planning Authority” i.e. Surrey County Council in the case of Dunsfold.
The planning applicant at Dunsfold (UKOG 234) is just as or even more flaky than the company in the court case. We know from its accounts that UKOG 234 is technically insolvent and only avoids insolvency because it is supported financially by its parent company, UK Oil and Gas plc (which itself staggers on from one share dilution to another). So we say Surrey County Council will be failing in its duty to its residents if it doesn’t secure up front funds to restore this site if consent is granted.
However, according to Councillor Michael Goodman of SCC “in the context of the restoration, hydrocarbon development occupies a much smaller footprint than the more traditional and more extensive (by area) forms of mineral working, i.e. sand and gravel extraction. In view of the above context, the CPA does not consider there are exceptional circumstances to warrant a bond or security deposit, which is consistent with all existing hydrocarbon developments in Surrey. The CPA are satisfied that if there is a recommendation for approval, then the provision for the restoration of the site can be dealt with by condition, and the requirement of a detailed scheme, with no requirement for a financial bond. ” The CPA is the County Planning Authority, i.e. Surrey.
This is the completely the wrong test for exceptional circumstances. Even if it were the right test, Councillor Goodman’s answer makes no sense at all. Perhaps he isn’t aware that UKOG said in their application that they are relying on funds generated by sales from the site to pay for restoration. So if the site fails to produce (as we predict based on the existing technical evidence) and needs to be closed down at the end of three years, Councillor Goodman apparently expects the UKOG group to cough up a few hundred thousand pounds to cover its planning restoration obligations while at the same time its thousands of disappointed shareholders will be baying to get some money back from their failed investments. Really? In this case the obvious thing for UKOG to do is to liquidate the subsidiary to avoid its financial obligations passing upwards. If a company is bust it doesn’t matter what it is going to cost – the money isn’t there to do it – and Surrey’s position as a local authority won’t help it, it will be an unsecured creditor in any liquidation.
It seems that Councillor Goodman and his advisers still haven’t grasped what a financially insecure organisation he is dealing with …..but we predict his naivety (and potentially his negligence) will cost SCC dear if the Dunsfold site ever gets consent for exploration and SCC hasn’t seen sense and required some form of financial security.
It isn’t as if UKOG as a group has an unblemished record when it comes to restoring failed sites. After all, the South Downs National Park Authority had to start enforcement action to get another UKOG subsidiary to restore at the Markwells Wood site. https://www.southdowns.gov.uk/markwells-wood-enforcement-notice-issued/