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Fracking communities should get incentives, says minister Fracking communities should get incentives, says minister
(6 months later)
Communities near shale gas fracking sites should be given handouts to accept drilling in their area, a government minister has said.Communities near shale gas fracking sites should be given handouts to accept drilling in their area, a government minister has said.
The suggestion is markedly similar to a proposal made by the fracking company Cuadrilla in a letter to the energy minister John Hayes, released to the Guardian under the Freedom of Information Act, for taxpayers' money to be offered as a "quid pro quo" to help communities accept wells on their doorstep.The suggestion is markedly similar to a proposal made by the fracking company Cuadrilla in a letter to the energy minister John Hayes, released to the Guardian under the Freedom of Information Act, for taxpayers' money to be offered as a "quid pro quo" to help communities accept wells on their doorstep.
In the 11-page letter to Hayes in November last year, the Cuadrilla chief executive, Francis Egan, wrote: "There is a certain inconvenience that the local population bears in hosting development of this industry … We consider that there should be financial benefits [to the local population] in the form of a share of the tax take." He suggests further conversations to discuss the details.In the 11-page letter to Hayes in November last year, the Cuadrilla chief executive, Francis Egan, wrote: "There is a certain inconvenience that the local population bears in hosting development of this industry … We consider that there should be financial benefits [to the local population] in the form of a share of the tax take." He suggests further conversations to discuss the details.
Hayes told the Guardian it was "absolutely" right for communities to expect incentives, pointing to similar proposals for people living near windfarms and nuclear reactors.Hayes told the Guardian it was "absolutely" right for communities to expect incentives, pointing to similar proposals for people living near windfarms and nuclear reactors.
"[Shale] should be safe and secure and the community thoroughly engaged. We certainly need to think more about the benefits to communities and I want us to have a whole range of technologies – nuclear, wind, shale – all will receive benefits as appropriate," he said."[Shale] should be safe and secure and the community thoroughly engaged. We certainly need to think more about the benefits to communities and I want us to have a whole range of technologies – nuclear, wind, shale – all will receive benefits as appropriate," he said.
Hayes would not say whether such benefits should come from the taxpayer or companies involved in fracking. An environment ministry spokesman said incentives would be offered but the form they would take and who would pay for them had yet to be decided. Officials did not comment on whether the ministry's move was prompted by Egan's letter.Hayes would not say whether such benefits should come from the taxpayer or companies involved in fracking. An environment ministry spokesman said incentives would be offered but the form they would take and who would pay for them had yet to be decided. Officials did not comment on whether the ministry's move was prompted by Egan's letter.
Fracking, or hydraulic fracturing, involves pumping water, sand and chemicals into deep wells at high pressure to open up fissures in shale rock, enabling trapped gas to be extracted. Concerns have been raised about pollution and small earth tremors linked to the method.Fracking, or hydraulic fracturing, involves pumping water, sand and chemicals into deep wells at high pressure to open up fissures in shale rock, enabling trapped gas to be extracted. Concerns have been raised about pollution and small earth tremors linked to the method.
Andrew Pendleton, head of campaigns at Friends of the Earth, said: "This is an outrageous suggestion. The minister should send a very clear no to Cuadrilla. It's extremely cheeky of them to ask for this – it sounds like they're asking for extremely scarce taxpayers' money in order to do what they think will be a very profitable activity.Andrew Pendleton, head of campaigns at Friends of the Earth, said: "This is an outrageous suggestion. The minister should send a very clear no to Cuadrilla. It's extremely cheeky of them to ask for this – it sounds like they're asking for extremely scarce taxpayers' money in order to do what they think will be a very profitable activity.
"People are hugely concerned about not just the short-term effects of fracking on them but also about what it will do to climate change. The reality is that there will not be community benefits in the way there are with renewable energy, which people can own and benefit from in the long term. Fracking means big, often foreign-owned companies coming in, making a mess, maybe failing to clean up properly, and leaving long-term damage.""People are hugely concerned about not just the short-term effects of fracking on them but also about what it will do to climate change. The reality is that there will not be community benefits in the way there are with renewable energy, which people can own and benefit from in the long term. Fracking means big, often foreign-owned companies coming in, making a mess, maybe failing to clean up properly, and leaving long-term damage."
Hayes said it could be more than a decade before fracking took place on any serious scale in the UK, even if companies poured resources into it.Hayes said it could be more than a decade before fracking took place on any serious scale in the UK, even if companies poured resources into it.
Cuadrilla halted work at one of its three drilling sites, at Anna's Road in Lancashire, after deciding to undertake a new environmental assessment. The setback, disclosed last week, means no fracking or drilling of shale gas wells is currently taking place in the UK, though Cuadrilla could resume exploration this year or next.Cuadrilla halted work at one of its three drilling sites, at Anna's Road in Lancashire, after deciding to undertake a new environmental assessment. The setback, disclosed last week, means no fracking or drilling of shale gas wells is currently taking place in the UK, though Cuadrilla could resume exploration this year or next.
Residents near proposed fracking sites in Lancashire, Sussex and the West Country have formed groups opposing the drilling, citing concerns over earth tremors, possible contamination of water supplies, gas leaks and other environmental damage.Residents near proposed fracking sites in Lancashire, Sussex and the West Country have formed groups opposing the drilling, citing concerns over earth tremors, possible contamination of water supplies, gas leaks and other environmental damage.
A Cuadrilla spokesperson said: "In the long term, local communities must reap benefits from our activities. In consultation with these communities, we will develop a community benefit scheme which allows them to share in the success of future gas production sites."A Cuadrilla spokesperson said: "In the long term, local communities must reap benefits from our activities. In consultation with these communities, we will develop a community benefit scheme which allows them to share in the success of future gas production sites."
Cuadrilla has suffered a series of setbacks, having invested £100m in the UK with no result so far. Its first fracking attempts in April and May 2011 caused two small earthquakes and a deformation of one of its wells. The company called off operations in May 2011 pending an investigation, and the moratorium was only lifted last December, with stringent new conditions placed on its operations.Cuadrilla has suffered a series of setbacks, having invested £100m in the UK with no result so far. Its first fracking attempts in April and May 2011 caused two small earthquakes and a deformation of one of its wells. The company called off operations in May 2011 pending an investigation, and the moratorium was only lifted last December, with stringent new conditions placed on its operations.
Lord Browne, chairman of the company and a managing partner at its venture capital backer Riverstone Holdings, told the Guardian he would do "whatever it takes" to make fracking a success in the UK, comparing the opportunity to North Sea gas. He said the required investment was likely to run to the "low hundreds of millions" in the next few years, and potentially billions in the next decade.Lord Browne, chairman of the company and a managing partner at its venture capital backer Riverstone Holdings, told the Guardian he would do "whatever it takes" to make fracking a success in the UK, comparing the opportunity to North Sea gas. He said the required investment was likely to run to the "low hundreds of millions" in the next few years, and potentially billions in the next decade.
Hayes said it could take years for shale gas fracking to be explored on a broad scale in the UK. "I don't think we should assume it will transform our energy market in 12 years. There are many variables we don't know about."Hayes said it could take years for shale gas fracking to be explored on a broad scale in the UK. "I don't think we should assume it will transform our energy market in 12 years. There are many variables we don't know about."
He said the government would be "monitoring activities very closely", chiefly through the new Office for Unconventional Gas and Oil (Ofugo), which is to be headed by a former environment ministry civil servant, Duarte Figueira, who was previously focused on offshore renewable energy.He said the government would be "monitoring activities very closely", chiefly through the new Office for Unconventional Gas and Oil (Ofugo), which is to be headed by a former environment ministry civil servant, Duarte Figueira, who was previously focused on offshore renewable energy.
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