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UK households to get fracking payments under new government plans

08 August 2016

UK Prime Minister Theresa May has intervened to allow people who live near sites used for shale gas exploration to be given cash payments so that they personally benefit from the developments. In rewriting the previous government’s plans, she has extended the planned payments from community trusts and councils to private individuals.

Speaking ahead of the launch of the Shale Wealth Fund, May said: “The government I lead will be driven by the interests of the many – ordinary families for whom life is harder than many people in politics realise. As I said on my first night as prime minister: when we take the big calls, we’ll think not of the powerful but of you.

“This announcement is an example of putting those principles into action. It’s about making sure people personally benefit from economic decisions that are taken – not just councils – and putting them back in control over their lives. We’ll be looking at applying this approach to other government programmes in the future too, as we press on with the work of building a country that works for everyone.”

Under the original plans, communities were to receive up to 10% of tax revenues derived from shale exploration in their area to spend on priorities such as local infrastructure and skills training with up to £10m available for every eligible community.

A British Geological Survey study of shale gas across northern England estimated a shale gas resource of 1,300 trillion cubic feet. This compares with current UK annual gas consumption of around 2.5 trillion cubic feet.

In July, UK-based petrochemical group Ineos said it would accelerate shale gas development by lodging up to 30 planning applications across the country in the coming months. It hopes to start drilling in northern England early next year and is expected to begin extracting gas in about 18 months.

UKOOG, the trade body for the onshore oil and gas industry, welcomed the Government’s consultation on the proposed shale gas wealth fund and confirmed it would be providing a submission.

Ken Cronin, chief executive of UKOOG, said: "The onshore oil and gas industry in the UK continues to believe that local people should share in the success of our industry and be rewarded for hosting sites on behalf of others in the country. That is why we launched the industry's community benefits scheme and community engagement charter in 2013. These are additional to the proposed Shale Wealth Fund.

"The overarching objectives of secure, affordable and low carbon energy continue to be a driving force for our industry. Just 12 years ago, Britain was a net exporter of gas, but imports now make up nearly half of our gas demand, at a cost to this country of around £10 million a day. Recent estimates by National Grid are that, without shale, the UK could be importing over 90% of its gas by 2040."

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