Wednesday 18 December 2013
Large swathes of UK to be opened up for shale drilling, with communities where fracking takes place to receive £100,000, even if no gas is produced
By Emily Gosden, Energy Editor
7:00AM GMT 10 Dec 20
large swathes of Britain will be opened up for shale gas drilling under plans due to be announced next week, with local communities promised £100,000 in benefits for every well subjected to fracking – even if no gas is produced.
Ministers are preparing to identify thousands of square miles of land across the country that they believe are rich in shale and should be explored by gas companies.
Michael Fallon, the energy minister, will say the government is “widening the search for shale” and has warned that households “right across the south” should prepare for fracking near their homes.
The identification of provisional “licensing areas” is likely to reignite controversy over fracking, the process of pumping water, sand and chemicals into the ground at high pressure to extract gas trapped in rocks.
The Government will today attempt to smooth the way for the plans by confirming a package of benefits for local communities, including the £100,000 upfront payment for any fracking – even if the process is unsuccessful and no gas is produced.
If fracking is successful, communities will then be handed one per cent of revenues the company makes from selling gas – which could see them reap benefits of up to £10 million.
Ministers hope the benefits will help assuage fears of Conservative MPs with constituencies in the south of England who are worried at public hostility to fracking, amid concerns about the impact on the landscape and environment.
The Treasury will on Tuesday publish draft legislation to introduce tax breaks for shale gas companies – announced in the Autumn Statement last week – in an attempt to entice international gas companies to fund drilling in the UK.
“The UK is sitting on significant amounts of shale and the potential prize for energy security and investment is huge. This gives companies the huge incentive to step up the search for shale and find out what is recoverable,” Mr Fallon said.
“Recent reports have tackled public concerns about water contamination and usage, as well as confirming that the risks to public health are low. We have robust regulation in place and now is the the time to press ahead.”
The Chancellor last week said that shale gas could bring “thousands of jobs, billions of pounds of business investment, and lower energy bills”.
However, only a relatively small proportion of Britain – about 7,300 square miles – has so far been licensed for oil and gas drilling. This includes parts of Cheshire, Lancashire, Yorkshire, Surrey and Sussex, where drilling for oil at Balcombe by Cuadrilla this summer caused fierce protests.
In May ministers commissioned consultants AMEC to carry out a “strategic environment assessment” of a huge area of Britain to help the Government assess which other areas are suitable to open up for drilling.
Campaign group Greenpeace, which opposes fracking, says that the areas being assessed cover some 32,000 square miles.
The plans set out this month will drastically increase the area available for potential fracking.
Oil and gas companies will then compete for rights to drill in the areas in a “licensing round” next year.
Once they have drilling rights from the government, companies would still then have to seek a further series of permits from government as well as access from landowners and planning permission before any fracking could take place.
A British Geological Survey study earlier this year revealed that shale gas trapped in the rocks under northern England and Wales alone could be enough to fuel the UK for more than 40 years. However, much of this area cannot be explored because it has not yet been licensed for drilling.