The Prime Minister has intervened in proposals for a shale wealth fund to include an option to make direct payments to people affected by fracking.
According to a statement from Downing Street, quoted widely in this morning’s papers, Theresa May wanted people to “personally benefit from economic decisions”.
Opponents of shale gas developments have described the idea as a bribe that would not work. (See Reaction)
A consultation on proposals for the shale wealth fund had been expected to propose that proceeds from shale revenues would be shared only with community trusts and local authorities.
But the details, due to be published tomorrow, will now include money being paid directly to local residents in shale areas.
No level of individual payment was included in the Downing Street statement. The Sun reported that people could get £10,000 and MailOnline said the figure could be £13,000. This is not expected to be a lump sum and there is no information about the length of time over which payments would be made, who would receive them or how the recipients would be chosen. DrillOrDrop will report on the consultation when it is published tomorrow.
The shale wealth fund was first proposed in last year’s autumn statement. The government then promised to put up to 10% of shale gas tax revenues into a fund which, it said, could deliver up to £1bn of investment in local communities hosting shale gas developments. There is no suggestion that the proportion of tax revenues has changed.
But today’s statement said the government had “changed the consultation to ensure a greater focus on control for local communities – including insisting on proposals to transfer funds directly to households rather than local authorities”.
The statement said: “The new fund could deliver up to £10m per eligible community”.
Mrs May is quoted:
“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”.
The government’s proposals are for payments from tax revenues and, therefore, rely on shale site operating companies making a profit and paying tax.
There is a separate scheme from the industry group, UK Onshore Oil and Gas, which proposes the operator will pay £100,000 per hydraulically fracked exploration site to the local community, regardless of production, revenue or profit. UKOOG also proposes to pay 1% of production revenues to communities before the operator has accounted for costs.
INEOS has said it will pay 6% of production revenues to local landowners and the community.
Reaction from environmental groups
Tony Bosworth, Energy Campaigner, Friends of the Earth
“Communities across the UK have made it clear that they don’t want fracking.
“A YouGov survey for the Sunday Times last year showed that, even where communities were offered £1 million, they still remained opposed to fracking taking place near them.
“Local people won’t suddenly be bribed into accepting this unpopular practice, which poses risks to people and the environment.”
Dr Doug Parr, UK chief scientist, Greenpeace
“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.
“If Theresa May wants to show the UK is open for business, she should reverse the policies that have harmed our vibrant clean energy sector and back the technologies that can supply cheap, homegrown energy for decades to come.”
Maureen Mills, Halsall Against Fracking
“We are undergoing a seismic survey in PEDL 164 and already at least one house sale that we know of has fallen through just because it showed up on the search.
“Theresa May says her government will be ‘driven by the interests of the many – ordinary families for whom life is harder than many people in politics realise.’
“Her government will be driven, as always, by ‘the powerful’ who stand to make billions out of inflicting fracking on communities. No amount of bribery, community or individual, will give her social license for fracking and she knows it.”
Pam Foster, Residents Action Against Fracking
“If Theresa May wants to give power back to the people why not uphold the democratic decision of their elected representatives, Lancashire County Council, who said no to fracking? Power is being transferred from the people of Lancashire to central government and the shale gas industry.”
Tina Rothery, anti-fracking campaigner
“The UK government is trying anything it can to enforce fracking on communities across UK – this will not work any better than all of their previous failed PR initiatives. We are not driven by greed – we are driven to defend our young.”
Mike Hill, anti-fracking campaigner, speaking on BBC News
“What Theresa May’s decided to do is preparing to overrule the council decisions [in Lancashire to reject fracking], overrule the local residents and individuals of Lancashire and impose fracking on them by what I can only describe as bribery, there is no other way to put it.
“It will be highly divisive of communities across the UK. It will put neighbour against neighbour and basically it is putting money at the centre of this argument instead of putting health and communities at the centre of this argument.”
Barbara Richardson, Roseacre Awareness Group, which opposes fracking plans by Cuadrilla
“As if ‘up to £10k’ could compensate us for what we would have to endure.
“We moved to the countryside for the peace, quiet and way of life it offers. We worked hard to afford it. Our home is not likely to sell at all with a 24 x 7 fracking site next door to it, so how this could ‘compensate for any disruption and impact on property prices’ is ridiculous.
“This tells me the government is desperate. They know there is huge and growing opposition and rightly so.”
Claire Stephenson, of Preston New Road Action Group, which opposes fracking plans by Cuadrilla
“I think it’s unreservedly outrageous that what is in effect, a bribe, is now due for a government consultation on how to force communities to accept fracking. The headlines are stating cash for ‘communities affected by fracking’. Is this finally an admission that we WILL be affected by fracking?
“The reporting on this release from the mainstream media is flawed and fanciful and contains so many inaccuracies about the fracking process. We will scrutinise this consultation when it is released tomorrow to see how they are imagining they can administrate it in their fairyland of fracking.
“Theresa May stated again yesterday: “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.” I think that basically translates as we’re actually thinking about the ‘big calls’ whilst trying to keep you, the little insignificant people, mollified and controlled.
“Our opposition to fracking isn’t about money – it’s about our health, our children, our safety, the quality of the air that we breathe and the cleanliness of the water that we drink. You can’t buy that and you can’t buy us.
“Communities are furious that this is now turning into a cash bribe and it will only serve to reinforce our opposition and strengthen our resolve. We said no to fracking. No amount of dirty money will change that.”
Backing fracking group
Sue Gough, Kirby Misperton, where Third Energy has permission to frack an existing well
“This is a cynical attempt by the Tories to bribe local people to accept fracking by offering them hard cash.
“People need to know that by accepting this money they are selling their communities down the river and condemning them to industrialisation and ruination by the frackers, who have no respect for our environment, our livelihoods or health.
“If Third Energy is allowed to frack in Ryedale it will open up the floodgates to all the other companies who are waiting in the wings to move into North Yorkshire and will bring about the widespread industrialisation of the county – we need to continue to oppose the industry and persuade people to see through this blatant bribe”.
Cllr Di Keal, Liberal Democrat member, Ryedale District Council
“This is such an obvious ploy by the Tory party, led by pro-fracker Theresa May, to try and buy support for this hugely damaging industry.
“This move smacks of desperation from a Tory government that is losing the democratic argument on fracking.
“In the current economic climate people, when many people are struggling financially, the offer of £10,000 might seem appealing, but it is little compensation for the risk to the environment, our health and well-being and the wrecking of the countryside that the industry will bring.
“While the money may sound attractive to some hard pressed families it will not even scrape the surface in terms of the compensating for the huge fall in house prices that would follow in the wake of fracking.
“All local people in the vicinity of exploited wells will also face the damage and disruption caused by lorry journeys associated with the process, the pollution risks and damage to agriculture and tourism.
“North Yorkshire is a beautiful county that relies heavily on tourism and agriculture, both of which face irreparable damage if fracking is allowed to go ahead”.
Richard Howarth, Frack Free East Yorkshire
“The public are overwhelmingly rejecting fracking, and this cash is a sign of government desperation to get fracking accepted – but it won’t work.
“Households will ask themselves, ‘How much money is worth risking my family becoming ill?’ Studies now show that if you live close to unconventional gas wells in Pennsylvania, you’re much more likely to be admitted to hospital for a whole range of conditions, and babies are more likely to be born prematurely, underweight, and suffer complications.
“Residents near West Newton gas well in Holderness suffered noxious smells, sore throats and headaches for weeks on end when a mini-frack was attempted there, and residents have struggled to sell their properties because of the well site.
“A few thousand pounds, in the future, if a well actually produces, won’t be enough to convince people to suffer the wide range of ongoing impacts over a wide area, from pollution to traffic to earthquakes that damage the well.
“Most seriously of all, it’s economically and environmentally reckless. Pursuing yet more fossil fuels will irresponsibly amass a huge carbon debt, and condemn our children and grandchildren to the devastating costs and impacts of climate change.”
Jon and Val Mager, anti-fracking campaigners in East Yorkshire
“The government has never proposed compensation for communities living next to onshore wind turbines, nuclear power stations or solar arrays.
“Apart from the fact this is only an “option” for consultation – and the proposal depends on full production and a profit which can be taxed before any payment is made – the idea of compensation to local communities proves that fracking is far more potentially dangerous disruptive than the alternatives and this before a successful exploration well in the UK let alone a full on production site.
“The question to ask is what does the Government know which makes it important to provide compensation for this source of energy compared to all others?”
“Third Energy, which has been producing gas and energy safely and securely in North Yorkshire for over 20 years, is a firm believer that the local community should benefit from any unconventional gas production in the local area.
“We welcome a consultation on the proposal for a shale gas wealth fund, which would be in addition to the community benefits and community charter agreed by the onshore oil and gas industry, and look forward to a successful test frack at KM8, which should lead to an expansion in gas production in North Yorkshire which in turn would deliver revenues to make any fund viable.”
Lorraine Allanson, owner of a bed and breakfast and holiday cottage business
Quoted by BBC News: The money would: “go into the homes of families and people who are less well off”. Shale gas exploration could be done “very safely, very quietly” and would boost local economies, and she accused those who opposed fracking of using “doomsday scenarios”.
Ken Cronin, UK Onshore Oil and Gas
“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, at a cost to this country of around £10 million a day. Recent estimates by National Grid are that, without shale, the UK could be importing over 90% of its gas by 2040.”
Keith Taylor, Green Party MEP South East England
“Of all the measures the new Prime Minister should be undertaking to tackle catastrophic climate change, it is astounding that Theresa May has rested on this wrong-headed policy – just days after climate experts warned that Britain, and the world, is on course to miss key climate targets
“The British public will not be swayed by a naked attempt at using bribery to divide and conquer communities. It is time for the Government to stop circumventing democracy and, finally, listen to the public.”
Updated 08/08/16-11/08/16 with additional reaction