The Government has renewed its push to promote "fracking" for shale gas, as French energy giant Total confirmed it was investing in the industry in the UK. Conservative Prime Minister David Cameron announced that local authorities in England would receive 100% of the business rates collected from shale gas schemes, rather than the usual 50%.
It is the latest move by the Government to promote the exploitation of unconventional gas in the UK, which the Prime Minister claimed could bring the UK 74,000 jobs, more than £3 billion of investment and cheaper and more secure energy.
On a visit to a site near Gainsborough, Lincolnshire, in the area Total will be looking to develop shale gas wells, Mr. Cameron defended the plans to push ahead with fracking, saying environmental concerns would be assuaged once people saw the benefits. He said:
"We have the strongest environmental controls in this country. Nothing would go ahead if there were environmental dangers. I think people can be reassured by that.
"But I actually believe it's when these wells go ahead, when people start to see the benefit, when people see there aren't environmental concerns, they will see that it is quite right that this is part of our long-term economic plan."
Officials said the commitment on business rates would mean councils hanging on to up to £1.7 million extra a year from each fracking site.
The industry has already pledged to give local communities £100,000 for each test drilling - and a further 1% of the revenues if shale gas is discovered and today it was announced that the industry would further consult on how to deliver the money to communities, with options including direct cash payments to people living near the site or setting up of local funds directly managed by local communities.
Conservative Energy Minister Michael Fallon said the 100% business rates incentive on offer was the same as for renewable technologies, such as wind farms and solar energy.
Sir Edward Leigh, the Member of Parliament for Gainsborough, welcomed the Prime Minister’s announcement of new incentives for communities that allow shale gas extraction in their area. David Cameron’s speech in Beckingham came as French energy firm Total made it known they intend to invest £12 million into shale gas extraction in Lincolnshire.
“So long as local planning committees have the final authority on whether to allow them or not, I am in favour of shale gas extraction,” Sir Edward said. “Luckily most of the kinks of fracking have been worked out abroad, where the procedure has been used for over sixty years. The incentives the Prime Minister announced here in Lincolnshire this week will allow local authorities to keep all business rates incurred through fracking, which should provide a welcome boost to local coffers.
“We have an opportunity to release a massive new energy resource for Britain, to reduce people’s monthly costs and help balance the books a little,” the MP continued. “We’d be foolish not to explore it further, but ultimately it’s local residents who must have the final word on whether they go through.”
Total today announced that the company has taken a 40% share in two gas exploration licences for drilling in the Gainsborough Trough, in an area between Doncaster and Lincoln. Total, which is already involved in shale gas projects in the US, China, Australia, Argentina, Poland and Denmark, described the move as an important milestone for the company in the UK.
The initial exploration will be conducted by partner IGas, and Total will take over operations as the project develops.
The project is part of £1.2 billion annual investments in oil and gas production by Total E&P, which is set to make it the largest oil and gas producer in this country by 2015.