U.K. to Pay Residents to Speed up Shale Gas Revolution

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The new U.K. Prime Minister Theresa May is hoping to revitalise ambitious shale gas plans by offering to pay local residents a share of the profits.

A scheme called the Shale Wealth Fund will aim to spread the benefits of shale gas extraction to local residents affected in host areas. This will include higher payments--believed to be in the region of £10,000 ($13,100) per household--or up to £10 million ($13.1 million) per community affected. When the fund was first mooted in 2014, payments were only going to be paid to community trusts and local authorities. A consultation will be launched in the coming week.

A British Geological Survey (BGS) study of shale gas across the north of England estimated a total shale gas resource of 1,300 trillion cubic feet. This compares to the current U.K. annual gas consumption of around 2.5 trillion cubic feet. The country's North Sea oil and gas resources are continuing to decline and coal-fired power is being phased out. The government wants shale gas to save some of its domestic gas industry and help support the rapid shift to renewable energy.

Speaking ahead of the consultation launch, Prime Minister May said: "The government I lead will be 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. 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."

Shale gas company Cuadrilla Resources (Lichfield, England) was awarded the first fracking licence in the U.K. back in 2011 but has spent years struggling to get operations up and running due to delays from local authorities and protesters. Francis Egan, chief executive officer welcomed the new consultation: This public consultation gives control to local communities to say exactly where they would like this money to go," he told Kallanish Energy.

However, he ridiculed the impending delivery of the first U.S. shale gas imports to the U.K.

"We are in the ridiculous situation where this month or next month Ineos is going to have their first shipment. They are taking ethane, turning it into a liquid, transporting it across the sea in a container, turning it back into a gas and then pumping it into [its plant at] Grangemouth. Just beneath Grangemouth are deposits of shale gas the Scottish Government is saying you can't touch."

Industrial Info reported in June on the first new fracking licence to be awarded in the U.K. since 2011. For additional information, see June 8, 2016, article -- Shale Gas Fracking Gets U.K. Boost.

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