UK local bodies to get gas-drilling cash incentives

Local authorities in Britain will be given a multimillion pound cash incentive to approve planning permission for shale gas drilling, British prime minister David Cameron will say today.

Currently, local authorities can keep half of all business rates collected in their areas, but Mr Cameron is now offering them everything reaped from companies drilling for shale gas.

Drilling has already happened in Lancashire, though it was suspended there after it caused minor tremors, but the majority of locations are in the southeast of England.

However, the prospect of drilling is deeply unpopular with many in local communities, who fear groundwater contamination, extra truck traffic and tremors.

Today, Mr Cameron will tell local authorities that each drilling site – and there may be hundreds needed – could be worth up to £1.7 million annually in rates.

Saying that England and Wales are “going all out for shale”, Mr Cameron added: “It will mean more jobs and opportunities for people, and economic security.”

Shale gas
The British government has enviously watched the rapid growth of shale gas in the United States, where it has helped sharply to cut the US's dependence on foreign energy supplies.

Last year, the chancellor of the exchequer, George Osborne, offered drillers tax cuts, while the Environment Agency is now offering sharply reduced decision times for works permissions.

In a bid to win support, drilling companies last year offered local communities £100,000 for each well, along with 1 per cent of the revenues – which could be worth up £10 million a year for each.

Shale gas is found when underground wells are “fracked” using a high-pressure mix of water, sand and chemicals which breaks apart rock formations, letting gas seep out.

Backing
Exploration is backed strongly by a Conservative ministers, though their coalition colleagues in the Liberal Democrats are more wary.

Curiously, the Conservative support comes even though the majority of the sites targeted by drilling companies are in constituencies where the party dominates, even though local opinion is strongly against.

The Institute of Directors in London has argued that shale gas investment could reach £3.7 billion a year, supporting 74,000 jobs in energy, construction and chemicals.