A company which supports the shale industry has proposed that proceeds from fracking should be used to makes homes more energy efficient and to pay for household renewable energy schemes.
The idea by Remsol, which has worked on fracking waste treatment, was published on Wednesday (10/08/2016) with little attention.
In a policy paper the company proposed using revenues from fracking for solar panels, heat pumps, double glazing and loft and cavity wall insulation.
The source of the money would be separate from the government’s shale wealth fund, which dominated headlines earlier this week with the suggestion of direct payments to people in shale areas.
The government payments would be from tax receipts on shale revenues. The Remsol idea is to spend money from a voluntary industry community benefit scheme comprising 1% of revenues from shale gas production.
Remsol, which describes itself as a sustainability consultancy, claims its ideas, if adopted, could give owner-occupiers direct and indirect benefits of more than £41,000. There would also, Remsol said, be cuts in climate change emissions.
Lee Petts, managing director of Remsol: said.
“Until now, there hasn’t really been a great deal of discussion about just how the 1% of revenues could be spent. With our policy paper, we wanted to show that it’s possible for substantial numbers of local people to benefit directly from hosting shale gas in their communities.
“Opponents of shale gas regularly say that it will reduce investment in renewables, and lead to increased emissions but, as our paper shows, it’s possible to use the industry’s community benefit payments to actually boost renewables deployment and create climate change benefits.”
“Improvements to 260+ homes”
Remsol estimates shale gas revenues from a typical site would be enough to improve the energy performance of more than 260 local homes over 20 years.
The figures assume a maximum spend of £12,000 per property and revenues from shale gas based on forecasts in a 2013 report by the Institute of Directors. This predicted that a shale gas pad with 10 vertical wells and 40 horizontals would produce 128bn cubic feet of gas over 20 years.
Based on this year’s gas prices, Remsol estimated this would generate revenues of about £395 million per pad and, at 1%, £3.95 million for the community benefit scheme.
If all the £3.95 million were used it would pay for the energy improvement work Remsol suggested. But the paper says the industry scheme proposes to give two-thirds of the 1% to the local community. The remaining one-third would be distributed at a county level.
“£41,000 direct and indirect benefits”
Remsol estimated that investment in renewable energy and energy efficiency would result in more than £41,000 for owner occupiers living near shale gas sites over 20 years.
The company said this figure was made up of:
- £12,000 installation costs per household
- £13,700 energy savings, assuming a 50% reduction in energy bills
- £16,000 house price increase, assuming energy improvements resulted in a rise in value of 14%-38%
Lee Petts said:
“Evidence from a study in 2013 shows that homes with better energy efficiency ratings attract higher property valuations, which would hopefully go some way toward allaying fears about potential falls in house prices.”
Remsol said people must feel they would benefit directly from community benefit scheme. Distribution of money should be targeted and straightforward and the money should leave a lasting legacy, it said.
The company argued that its proposals would result in:
- Local jobs for installers
- Cheaper energy long-term
- Lower carbon emissions
- Higher house prices
- Both owner-occupiers and tenants benefiting from reductions in energy costs
It recommended the government match the contribution from operators to extend scheme to twice as many local homes. It also called for special tax arrangements so that qualifying residents don’t have an additional tax burden.
PDF download: Remsol A Blueprint for Shale Gas Community Benefits
- Remsol commissioned a public opinion poll about fracking and community benefit schemes from the research company, ComRes. DrillOrDrop will be reporting on this separately