Families to be given £20k payouts for fracking

Households will be given cash payments of up to £20,000 in compensation for fracking taking place in their neighbourhoods under plans unveiled by Prime Minister Theresa May.

A fracking exploration drilling site. Picture: Gareth Fuller/PA
A fracking exploration drilling site. Picture: Gareth Fuller/PA

A £1 billion shale wealth fund is already setting aside up to 10 per cent of the tax proceeds from fracking and Mrs May said this can go straight to residents in communities affected across the UK.

However, through its powers over planning the Scottish Government has imposed a moratorium on the technique for extracting shale gas from deep underground rocks.

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First Minister Nicola Sturgeon has said she is “highly sceptical” about the prospect of fracking ever being allowed north of the Border.

Ms Sturgeon’s political opponents and scientists urged ministers at Holyrood to adopt a more open-minded approach to the process following Mrs May’s announcement yesterday.

The new fund is expected to deliver as much as £10 million to each community where wells are situated. Downing Street declined to estimate how much payouts could be worth, but it is thought individual households could receive between £5,000 and £20,000.

Mrs May said: “The government I lead will always 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.”

Scotland’s Midland Valley is believed to hold up to 80 trillion cubic feet of shale gas, enough to meet the country’s gas needs for the next four decades. Grangemouth Owner Ineos wants exploit these reserves, which it says could be used to power its petrochemical plant for the manufacture

of plastics. The company has ­previously raised the prospect of payments to those affected.

Fracking is widespread in the US, where it has brought about a “shale revolution” that has resulted in the costs of energy falling. But there are concerns that it can lead to earthquakes and water contamination.

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A Scottish Government report has already found fracking can be carried out safely, but more research has been ordered and no fracking licences will be awarded in Scotland until a decision is reached.

Martin Livermore, director of the Scientific Alliance said: “The Scottish Government obviously has to balance up all the concerns but ultimately they’re representing people and trying to help Scotland be as prosperous as possible – and fracking has a lot of potential.

“The companies who have been granted licences are responsible companies and they have pretty stringent conditions under their licences so as they engage properly with the public, I would certainly prefer to see the government keep out of that debate.”

He insisted that any kind of mining or oil extraction carries risks.

“You’ve had land-based oil and gas extraction down in the south of England for many years with no problems from local communities,” he added.

A spokesman for the Scottish Conservatives said the potential of fracking in Scotland must be considered.

He said: “It could boost jobs for a struggling energy sector, and could even lead to lower household bills. Anything that brings that a step closer should be welcomed, including the possibility of this initiative.”

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Labour, the Liberal Democrats and Greens all want to see fracking banned. Yesterday’s announcement could go some way to counter resistance from residents.

But Greenpeace UK chief scientist Doug Parr said: “The government has tried to sweeten the fracking pill with cash payments before, and it didn’t work. Over the last two years, public opposition has soared and support for shale has tanked. People’s concerns about climate change and their local environment cannot be silenced with a wad of cash. You can’t put a price on the quality of the air you breathe, the water you drink, and the beauty of our countryside.”

Ken Cronin, chief executive of trade body UK Onshore Oil & Gas, 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. Recent estimates by National Grid are that, without shale, the UK could be importing over 90 per cent of its gas by 2040.”

Green Party MEP Molly Scott Cato said the proposed payments to individual households amounted to “little more than bribes”.

“This is bound to set household against household and can only exacerbate community tensions,” said Ms Scott Cato, who pointed to a recent poll suggesting just 19 per cent of people in the UK support fracking.”