Today, we launched our latest policy paper “A Blueprint For Shale Gas Community Benefits” in which we set out proposals for how theÂ 1% of revenues that the industry has pledged to share could best be used by local communities that play host to shale gas extraction, alongside the Shale Wealth Fund.
Community benefit schemes are a common feature of modern onshore energy developments in the UK, including in wind and nuclear power.
Shale gas is no different, and in 2013, the trade association UK Onshore Oil and Gas (UKOOG) announced an industry pledge to share 1% of future production revenues with local communities. In the 2014 Autumn Statement, theÂ government announced it would also create aÂ Shale Wealth Fund.
Since then, whilst the wider debate about shale gas has rumbled on, there has been relatively little in the way of discussion about how the industry-funded community benefit paymentsÂ could actually be spent. In our policy paper, we seek to address thisÂ by providing an outline of how the monies could be usedÂ in order to maximise the social, economic and environmental benefits of shale gas extraction as part of a diverse UK energy mix.
Ever since we first entered the debate about shale gas in 2011, we’ve worked hard to play our part in making sure it is delivered safely and sustainably. For instance, we’ve promotedÂ the idea of using recycled waters from other industries as a more environmentally sustainable alternative to fresh water in the hydraulic fracturing process. When it came toÂ finding a way of treating and disposing of the flowback wastewater that’s generated, we focused on solutions that would enable it to be returned back to the natural environment to become part of the water cycle again. And we’ve consistently said that local businesses should be first in line for supply chain opportunities and that local residents should share in the benefits. This latest policy paper is an extension of that thinking.
Spent wisely, the industry-funded community benefit payments could:
Deliver direct and indirect financial benefits of over Â£41,000 for nearby owner-occupiers
Act as an enabler of renewables and create jobs, whilst helping to cut climate change emissions
Boost house prices in areas that host shale gas sites
Research commissioned by Remsol and undertaken independently by ComRes, a member of the British Polling Council, examined people’s opinions when presented withÂ a range of potential community benefit schemes for major onshore energy developments, including shale gas, and the outcomes that those schemes could lead to. Amongst other findings, the research shows that payments to local councils is the least favoured way of administering community benefits. It’s a point that’s obviously recognised by the new Prime Minister: the Shale Wealth Fund, due to be formally consulted upon this week, was previously expected to share proceeds from shale revenues only with community trusts and local authorities, but the consultation has been changed by Theresa MayÂ to include the option of money being paid directly to local residents in host areas.
Ken Cronin, chief executive of United Kingdom Onshore Oil and Gas (UKOOG) said: “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. We believe strongly that the UK needs to have a balanced home-grown energy mix including renewables, nuclear and gas and oil to combat rising imports, costs and climate change issues. This paper illustrates a novel way of doing so.â€
Speaking about its research, ComRes Chairman, Andrew Hawkins, said: “These results clearly show that if there was to be a major energy development in their local area, British adults are by far the most interested in seeing local homes benefit from reduced energy bills. Conversely they are least likely to think the community should benefit via payment to local councils to allocate to projects in the area. It is clear that the impact of a scheme to help local homes become more energy efficient is seen as positive, with British adults identifying a range of benefits as important, from lower energy bills for residents to reduced carbon emissions from homes.â€