Fracking giant Cuadrilla offers funds to communities if ban is lifted

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A scientific review of fracking was ordered by the Government amid calls for the ban to be scrapped to ease the cost of living crisis - Jane Barlow
A scientific review of fracking was ordered by the Government amid calls for the ban to be scrapped to ease the cost of living crisis - Jane Barlow

An energy firm lobbying for the fracking ban to be lifted will offer payments worth up to hundreds of millions of pounds to communities in areas from which it extracts shale gas, if the moratorium is brought to an end by ministers.

Speaking as scientists finalised a government-commissioned review of fracking, Francis Egan, Cuadrilla's chief executive, said the firm had decided to put six per cent of its shale gas revenue into "local community funds" to "help ease the cost of living crisis".

He claimed the payments would "run into hundreds of millions of pounds for each producing site and benefit thousands of households."

The proposal mirrors similar funds put in place by wind farm developers to encourage local consent for turbines. Ministers have suggested the funds could be put towards reducing energy bills for those in the area.

The announcement will be designed to heap pressure on Boris Johnson and Kwasi Kwarteng, the Business Secretary, who are expected to make a decision on whether to lift the ban following a review being conducted by the British Geological Survey (BGS).

Kwasi Kwarteng, the Business Secretary, is expected to make a decision on whether to lift the ban following a review - Kirsty Wigglesworth
Kwasi Kwarteng, the Business Secretary, is expected to make a decision on whether to lift the ban following a review - Kirsty Wigglesworth

The BGS's findings are currently being peer-reviewed by scientists in the US and are expected to be submitted to Mr Kwarteng within days.

Mr Kwarteng ordered the review amid pressure from many Tory parliamentarians and some ministers to lift the ban as part of efforts to increase Britain's homegrown energy supply.

Craig Mackinlay, who chairs the Net Zero Scrutiny Group of Conservative MPs and has been a prominent advocate for the return of fracking, said: "It's vital that communities which host shale gas wells know exactly what they're getting. This industry-wide offer is a very generous one, and it will ensure that wherever sites are situated, it will be the local residents who see the greatest benefits.

"I am hopeful that we are about to see an outbreak of common sense from the Government, and an end to the pointless moratorium on shale gas extraction. This would allow us to explore the potential of an exciting technology to deliver much-needed energy security and get bills down."

Cuadrilla's offer appears to match a similar announcement by Ineos, the petrochemicals giant, which pledged to give six per cent of its production revenue to landowners and communities in a 2014 announcement.

Potential to bring 'over 70,000 jobs'

Mr Egan said: “The UK’s shale gas potential extends right across the north of England and it’s only right that these regions should receive a fair share of the revenue.

“This is why we plan to follow the example of others in the industry and offer six per cent of all shale gas revenue as a local community fund, to help ease the cost of living crisis. But we can only do this, and communities can only start to get the benefits, if the moratorium is lifted and shale gas production is allowed to commence.

“Shale gas also has the potential to bring over 70,000 jobs to towns across the north and midlands, along with billions of pounds of investment, let’s get this opportunity moving in the right direction.”

Cuadrilla has calculated that one successful shale gas site, roughly the size of a football pitch, could generate £285 million of "community funds" at today’s wholesale gas prices.

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