Britons living close to fracking wells could be paid some of the proceeds under proposals being considered by the U.K. government.

Prime Minister Theresa May has added an option to proposals to be consulted on this week that money from the fund set up to compensate areas hosting shale gas extraction sites be paid directly to residents , the government said in a statement. The Shale Wealth Fund was previously expected to share proceeds from revenues only with community trusts and local authorities.

May, her predecessor David Cameron, and newly appointed members of her cabinet including former Energy Secretary Amber Rudd have supported hydraulic fracturing of Britain’s shale rock to reduce the nation’s increasing dependence on natural gas imports. The proposal to pay affected households may be part of a strategy to overcome local opposition to the controversial practice after Britain gave its first approval for a fracking well in May following a five-year hiatus.

“It’s about making sure people personally benefit from economic decisions that are taken -- not just councils -- and putting them back in control over their lives,” the prime minister said in the statement. “We’ll be looking at applying this approach to other government programs in the future too.”

Communities could receive as much as 10 percent of tax revenue derived from shale exploration in their area to spend on priorities such as local infrastructure and skills training, the government said. The new fund could deliver up to 10 million pounds ($13.1 million) per eligible community.

Hydraulic fracturing injects water into rock to aid oil and gas extraction. Britain may have 26 trillion cubic feet (737 billion cubic meters) of natural gas in its shale basins, enough to meet domestic demand for a decade, according to government data.

Fracking caused tremors in the U.K. in 2011 after Cuadrilla Resources Ltd. unknowingly drilled into an area with a fault. A temporary moratorium was put in place as the government sought to address concerns that the technique is unsafe.

This week’s consultation comes during a national debate about fracking, gas supply, climate change and energy security. Plunging domestic production had caused Cameron’s administration to support the practice to shore up energy supplies and May, who voted in line with government policy against additional regulation on exploration companies, shows signs of following that strategy.

The government will publish its response to the review later this year.

Source:
courtesy of BLOOMBERG

by Scott Hamilton

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