Updated: Local people should have greater say in decisions – Government response on shale wealth fund

171109 KM Eddie Thornton

Third Energy’s KM8 site, 9 November 2017. Photo: Eddie Thornton

Updated 13 November 2017 with reaction to the shale wealth fund proposals

Communities should have greater control of the decisions that affect them, the government said today in its response to a consultation on the proposed shale wealth fund.

The response, compiled by the Treasury, said:

“The government believes in empowering local people, and wants to see communities and individuals have greater control of the decisions, assets, and services which affect them.

“The government believes that local people are best placed to understand the needs of their own communities. We also believe that local people should benefit first from decisions that affect them and that they should benefit from the proceeds of economic growth.”

The document does not propose giving people greater powers to decide whether shale gas developments should be allowed in their local area.

But it says local communities will decide how money in the shale wealth fund is spent.

The publication comes as Third Energy is waiting for the final go ahead to frack its site at Kirby Misperton in North Yorkshire.

The proposed fund would be drawn from 10% of any tax revenue arising from shale gas production.

The government has estimated that it could provide £1bn across UK shale gas areas over 25 years. But it conceded:

“The deployment of the Shale Wealth Fund depends both on production and the profitability of the industry, which will determine the level of tax that can be attributed to shale production and, therefore the Shale Wealth Fund.”

Today’s document comes more than a year after the closing date of a public consultation on the fund. The Treasury sets out what it thinks should be the principles:

  • Local communities will decide how money is spent, and the next steps for developing the details of how that process will operate
  • The fund should be administered in a transparent manner, and any administrative body ought to represent the views of the local community and be accountable to them
  • The fund could make payments to households, to be decided by communities
  • It should meet local needs and maximise benefits to local communities

The document suggests that the fund could improve access to public services and contribute to the local economy by providing training or improving infrastructures. It could invest in the local natural environment. It could also provide funding for community groups and the development of community assets, such as libraries and sports facilities.

But the Treasury says the fund should be additional to existing local government funding.

It says the fund should also be separate from the industry-operated community benefit scheme, which pays £100,000 per shale gas well site and 1% of production revenue.

The document does not define local community or propose how to decide which residents should benefit.

171009 km8 keith taylor

Keith Taylor, visiting objectors to the Kirby Misperton site last month. Photo: Keith Taylor

The Green Party MEP, Keith Taylor, said this morning:

“The Government has the temerity to claim the ‘wealth fund’ will ’empower’ the very communities who have had their local democratic opposition to fracking ridden roughshod over.

“Kickbacks won’t keep catastrophic climate change at bay and nor will they succeed in dividing and conquering communities united in their opposition to this environmentally destructive and dangerous process.”

“If the Tories were serious about financing community projects they would ditch their ideological attachment to a failed austerity project and take urgent action on a tax avoidance crisis that costs taxpayers’ around £11 billion a year.”

More reaction

Tim Thornton, retired GP from Ryedale

“When I use a word,” Humpty Dumpty said, in rather a scornful tone, “it means just what I choose it to mean—neither more nor less.”

“Communities – does that include a lone farmhouse, schoolchildren living further afield but exposed to air pollution, visitors like those at Flamingo Land, or the owners of the huge theme park? How near or far will the community be? There is usually a vagueness about community that might poison the benefits.

“Sites approved for clean extraction – what if, as we suspect, the extraction is neither safe nor clean? Disqualified by falling outside the qualifying requirements?

“Shale gas – I thought this bit was easy but…for years we believed our local well at kirby Misperton was drilled down to the shale so that they could extract shale gas from the shale layer. Indeed our driller John Dewar thought so too when I asked him as did his operations manager. His geologist however, insisted they were fracking ‘tight sand’, not shale. Never had I heard that time in all the discussions and debates in the District Council or County Council etc. Shale it seems is not a homogenous rock but contains areas of sand and other formations. By specifying ‘tight sand’ it may be interpreted as being a conventional source of gas and therefore sits outside the regulations governing fracking.

“It’s so tricky and fraught with confusion – perhaps deliberate. Don’t think your £150 – £2,000 is guaranteed. And don’t forget to compare your winnings with the  devaluation of your home by 10-20% and any other impacts you or your children and grandchildren may sustain.

“Just say No.”

No Fracking in Balcombe Society

The Treasury suggests that communities who accept shale drilling may be entitled to ‘up to 10% of tax revenues arising from shale gas production’.  A total give-away of £1 billion is mooted.

But that supposes that gas drillers will produce commercial quantities of gas, and manage to sell it at a profit, and will actually pay taxes – which is by no means sure, given the current gas glut worldwide, and the high costs of fracking shale.

Unlike the free-flowing wells of old, shale gas wells will flow only from the fractured sections of rock, so a very large number of wells would be drilled to extract shale gas across the North and Midlands.

The same goes for oil wells in the South East, where oil companies for the time being claim that they intend to acidise, not to frack.

Fracking will bring yet more air pollution, volumes of toxic waste and massive stress to communities across Britain. If the government thinks communities will roll over and sell their countryside and health, they are wrong.

Louise Somerville, Frack Free Somerset

“No amount of bribe money can clean our drinking water, no amount of bribe money can make polluted air safe to breathe, no amount of bribe money can protect us from the irreversible damage of fracking.  There is an extremely powerful and successful anti-fracking movement in the UK.  We’ve stopped this toxic industry from making any money for the last six years and we intend to continue. We will win our fight for a cleaner safer future.”

Professor Peter Strachan, Robert Gordon University

“No amount of cash can compensate for the environmental damage and diminishing quality of life that onshore #Fracking will bring to English communities.”

Who contributed to the consultation?

respondents breakdown

The consultation received 170 contributions, of which 115 were from individuals who were not identified in the response document.

Of the remaining 55, eight were from industry, eight from campaign groups and eight from funders/grant recipients. 27 local authorities responded, including councils in areas responsible for areas near active or proposed shale gas sites. Some contributions were from regions which have no exploration licences or are not considered to have shale gas prospects.

43 replies »

  1. Well, Kathryn, your vision of me could not be further from the truth. If you had read some of my previous posts you might have noticed I have worked in agriculture all my life, and my family have farmed, not only producing most of their own vegetables but also their own livestock for their own consumption. I no longer produce livestock, but certainly most of my own vegetables. However, I don’t enjoy the taste of turnips, and whilst my parents grew them, they were fed to the sheep. I much prefer parsnips.

    I did make some investment into one of your local companies, that is frequently labelled as a Ponzi scheme, and with the profit I made, acquired a nice new hybrid car (not a diesel that some of your group still puff around in), and the remainder furnished some nice veneers for my son’s choppers as he had inherited an enamel deficit gene from his Dad, and a holiday for the other son. And, because I made that investment within an ISA, guess what? No capital gains tax. Planning, not avoidance, not evasion. If I had not planned that, my son would not have his veneers. But it could have been solar panels, and the same would have applied. And, of course, it could have been a loss. Or, I could have tried the lottery.

    Don’t get too envious. The hybrid is leased! Don’t agree to being caught by the current horrendous depreciation on them. Planning and avoiding.

    Interesting, though, that people who disagree with the antis have to be labelled, and most of those labels are predictable and totally wrong. It is the “denier” principle, but equally wrong. You, in turn, could all be masking your business interests in selling wind turbines and generating a fog to enable that. That’s what makes the internet challenging. We just have to remember that the image we create around the people we are in conversation with, is just that.

  2. Meanwhile in the wider world:

    The political and oil and gas power plays in Lebanon (not Libya, as i said before, my apologies, thanks AI) Iran and Saudi Arabia and the Yemen are not only moving, they are literally being torn down and rebuilt in the name of the rapidly accelerating new Saudi regime, but it is by no means going well.

    What effect this will have on the oil prices and the former and increasingly endangered Saudi support of the USA and the moves towards China, remains to be seen. A rise in the oil price will certainly accelerate the moves to push for oil and gas production here, we may yet see a much harder crack down on protest to further promote “national interests” in such a situation, no matter how you see that.

    I suspect we haven’t seen the end of the growing enmity between The Lebanon, Iran and Saudi Arabia and The Yemen.

    ( https://www.youtube.com/watch?v=yq_LtbtvefM )

    ( https://www.youtube.com/watch?v=N4Wfhg_FuXY )

    ( https://www.youtube.com/watch?v=jan9MfnptYI )

    The links to those reports are inside the parentheses.

    When such major forces such as these start to destabilise and re-align, inevitably the knock on effects of that will be felt here, perhaps sooner than we think?

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