David Cameron has said he favours cash payments to individual households in compensation for inconvenience caused by shale gas drilling near their properties.
The idea is under consideration as part of a package of financial incentives to encourage communities to accept a new wave of “fracking” wells, which Mr Cameron said could supply Britain’s gas needs for the next 30 years and create 74,000 jobs.
The Prime Minister said that shale gas represents a “real opportunity” for the UK, and accused some opponents of being driven by an “irrational” reluctance to see any new carbon-based energy technology succeed.
He said that he was resisting pressure to set a carbon reduction target for 2030 because he believes that advances in technologies like carbon capture and storage (CCS) may cut emissions from fossil fuels like shale gas – something which he acknowledged had caused friction with Liberal Democrat coalition partners, who were more “gung-ho” on the issue.
The Prime Minister has announced plans to allow local authorities to retain 100% of any business rates from shale gas developments, as part of a package to allay resistance to wells. Local communities are also set to be offered £100,000 when a well is dug, along with 1% of revenues over its lifetime – potentially £7-£10 million.
Answering questions from senior MPs on the House of Commons Liaison Committee, Mr Cameron said that there would be “a serious amount of money” going into communities which accept shale gas wells, though it had not yet been decided how it should be split between county, district and parish councils.
And he said the Government was also considering “whether, because of the disturbance in the early part of a well being dug, there should be cash payments to householders and I’m quite in favour of that… Actually saying to people ’there’s going to be this small well drilling for shale gas and in order to make up for any inconvenience here is a cash payment’.”
Describing himself as “a supporter” of shale gas, Mr Cameron told the committee: “I think if there is an opportunity to extract clean, low-cost gas from shale in the UK, we would be making a great mistake if we didn’t enable this industry to grow.”
He accepted that there would be local arguments over the impact of wells on communities, but said that they should be “properly informed by what the potential of this industry is”. Some of the “myths” about the negative impact of fracking had not been borne out by experience in the US, he said.
“There are some people who I think are opposing shale because they simply can’t bear the thought of another carbon-based fuel being used in our energy mix,” said Mr Cameron.
“I think that is irrational because it is surely better for us to be extracting shale safely from our own country, rather than haying a high price for having it imported from around the world.
“Some people are so religiously opposed to it because they don’t want to see any carbon-based energy work, but I don’t think that’s helpful.”
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