UK “going all out for shale” with 40 fracking sites in pipeline
Last updated on 15 January 2014, 10:56 am
Prime Minister David Cameron has announced financial incentives for local communities who welcome fracking industry
The UK could drill up to 40 shale oil and gas wells over the next few years as the government on Monday promised more tax breaks for councils that back fracking.
At the same time, French energy giant Total said it would invest £30 million in exploration in Lincolnshire.
Environmental groups said the government was trying “bribe” local authorities in a bid to rush through approvals for the development of a shale gas industry despite concerns about pollution, earthquakes and that the growth of domestic reserves will thwart the UK’s future climate targets.
“We expect 20 to 40 wells to be drilled in exploration over the next couple of years and I think it’s very important that local communities see some of the benefit,” said Britain’s energy minister Michael Fallon.
Fallon told BBC Radio that there’s much more shale gas in the UK than previously thought and that development wouldn’t take place unless it’s “absolutely safe”.
Under the plans local authorities in England would receive all the business rates collected from shale gas projects rather than the usual 50%. Councils could earn up to £1.7 million a year from each wellhead.
The announcement of increased sweeteners for the shale industry – which the government thinks could create 74,000 jobs and cut energy bills – came on the same day that French oil and gas producer Total said it would invest £30 million in drilling sites in Lincolnshire in northeastern England.
In a statement Prime Minister Cameron said: “we’re going all out for shale. It will mean more jobs and opportunities for people, and economic security for our country.”
Green groups said that giving local councils more of the proceeds from fracking could make it less likely that applications to drill and produce shale gas were rejected.
“This move raises potentially serious concerns about conflicts of interest, if councils that benefit from this money are also the ones who decide on planning applications from fracking firms in the first place,” Friends of the Earth said.
However lawyers who specialise in the legal impact of fracking in the UK said planning laws would prevent skewed decision making.
“The planning system has been designed to provide protection against any such risk (whether the level of benefit is set at 50% or 100%),” said David Ross, an associate with London-based Pinsent Masons.
“It will not just be local authorities who decide whether a shale gas development goes ahead,” Ross said, adding that applications would also need to get the go-ahead from the Environment Agency, and any other stakeholders including the local community.
He added: “Giving undue weight to a particular factor or failing properly to take into account the views of any relevant stakeholder could lead to any resultant planning permission being judicially reviewed and ultimately quashed.
The British Geological Survey says there may be 1,300 trillion cubic feet of shale gas present in the north of England, and the UK has lobbied strongly for the use of shale gas in its future energy mix.
The UK opposes a binding renewables target in the EU’s climate and energy package to be published on 22 January, arguing that renewables and new gas-fired power stations should be part of a more flexible approach to cutting carbon emissions and weaning the country off coal.
Total joins other energy majors who have invested in shale in the UK.
Last year British utility Centrica took a 25% stake in Cuadrilla, which is exploring for shale gas in northwestern England but had to abandon drilling for oil in southern England last year in response to protests at the site by anti-fracking campaigners.
Another shale gas explorer, IGas, is drilling sites near Salford, Greater Manchester, while French energy company GDF Suez also has plans to explore for fuel deposits in UK shale.