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British Gov`t promises city halls that approve share exploitation to keep all taxes

Bogdan Tudorache

David Cameron has sought to quell unrest in Conservative heartlands about the impact of fracking by promising a business rates windfall to councils that approve shale gas projects, according to Financial Times. The pledge, made on Monday, coincides with an announcement by France’s Total that it will spend about $50m on exploring for shale gas in the East Midlands, making it the first oil major to invest in the UK’s fledgling sector. The prime minister said that local authorities will be able to keep 100 per cent of rates they collect from shale sites – up from the usual 50 per cent – amounting to an estimated £1.7m for a 12-well site.

“That’s going to be quite a significant boost for that local council’s coffers,” Michael Fallon, energy minister, told the BBC on Monday.

“We want local councils and local people to benefit from this exploration. We expect 20-40 wells to be drilled in exploration over the next couple of years.”

Cameron said that the UK’s governing coalition is “going all out for shale” because it will bring jobs and economic security for Britain. But it is likely to face strong opposition from grassroots campaigners who worry about the environmental impact.

Critics of fracking – hydraulic fracturing – which involves pumping chemicals, sand and water deep underground at high pressure to shatter shale rock and release oil and gas trapped inside, say it can contaminate groundwater and cause earthquakes.

Rural communities also worry about the effects large-scale fracking operations will have on air quality and local infrastructure, such as roads.

Jane Thomas, of environmental group Friends of the Earth, said the rates move “highlights the depth of local opposition to fracking and the desperate lengths ministers are prepared to go to overcome it”.

“This move raises potentially serious concerns about conflicts of interest, if councils that benefit from this money are also the ones who decide on planning applications from fracking firms in the first place,” she added.

Shale gas explorer Cuadrilla Resources faced angry protests last summer when it tried to drill for oil near the Sussex village of Balcombe, in the constituency of Tory cabinet minister Francis Maude.

Last summer, the industry announced that local communities would receive £100,000 when a test well is fracked – with a further 1 per cent of revenues if shale gas is discovered.

That could be worth £5m-£10m for a typical site, with the money likely to be distributed through direct cash payments and the creation of local funds to pay for community facilities.

Yet Conservative MPs have urged ministers to raise that 1 per cent figure in order to galvanise community support.




Autor: Bogdan Tudorache

Active in the economic and business press for the past 26 years, Bogdan graduated Law and then attended intensive courses in Economics and Business English. He went up to the position of editor-in-chief since 2006 and has provided management and editorial policy for numerous economic publications dedicated especially to the community of foreign investors in Romania. From 2003 to 2013 he was active mainly in the financial-banking sector. He started freelancing for Energynomics in 2013, notable for his advanced knowledge of markets, business communities and a mature editorial style, both in Romanian and English.

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