The announcement of the consultation on the new Shale Wealth Fund has led to some confusion. Jayne Watson has recently emailed a summary which will clarify the situation.
There are several potential funding streams available at different stages of shale gas development. Please note that as yet, there is no definition of ‘community’. It is not known if it will be Parish, District or County based.
1. Subject to gaining planning consent from Nottinghamshire County Council and when construction and drilling commences, the community would be eligible for grants from the IGas Community Fund. For each drilled lateral well over 200 metres in length, the community would be eligible for a voluntary one-off payment of £20,000 from the proposed Community Engagement Benefit as defined by UKOOG (UK Onshore Oil and Gas). This well does not have to been fracked. At Springs Road, these would be the only two sources of community funding at this stage of the exploratory phase.
2. UKOOG also states that £100,000 per site will be paid to the local community situated near to each exploratory well site where fracking has taken place.This will be paid by the operator, regardless of whether or not recoverable deposits are found.
In addition to this, 1% of production revenues will be paid to communities during the production stage, before the operator has accounted for their costs. Such funding would be some time in the future once further planning consents have been obtained by IGas, if the gas is recoverable and production is profitable.
3. The Shale Wealth Fund is a new funding proposal in addition to the above, that potentially offers funding from tax revenues arising from shale gas production for communities hosting shale gas wells. The Fund would have a maximum pay-out set for each community or region associated with an individual shale site over the lifetime of the site which may be 25 years or more. This would not be applicable until the wells are producing gas and in profit.
The consultation on the Shale gas Wealth Fund is open until 25 October and the link to the document is here if you wish to submit a response.
For more information contact Jayne through the contact form on this website.