U.K. to Pay Up To $3M a Well to Councils Allowing Shale GasKitty Donaldson
Prime Minister David Cameron will give millions of pounds to local authorities that allow shale gas developments to go ahead, part of a drive to create more jobs and encourage investment in the U.K.
Councils will be allowed to keep 100 percent of the business rates they collect from shale gas sites, double the current 50 percent figure, in a move that may be worth 1.7 million pounds ($2.8 million) per site in central government funding per year, according to figures released by Cameron’s office. Business rates are taxes to help pay for local services, charged on most non-domestic properties.
“That’s going to be quite a significant boost for that local council’s coffers,” Business Minister Michael Fallon told the BBC. “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.”
Research by business lobby group The Institute of Directors showed investment could reach 3.7 billion pounds a year and support 74,000 jobs in the oil, gas, construction, engineering and chemicals industries, Cameron’s office said. It also said the industry will make proposals today on how best to secure a role for British companies in the supply chain as shale gas production develops in the U.K.
“A key part of our long-term economic plan to secure Britain’s future is to back businesses with better infrastructure,” Cameron said in an e-mailed statement. “That’s why we’re going all out for shale. It will mean more jobs and opportunities for people and economic security for our country.”
Total SA today became the largest oil company to invest in U.K. shale gas through a $47 million deal to take stakes in two exploration areas in eastern England.
Europe’s third-biggest oil producer will acquire a 40 percent stake in licenses held by Dart Energy Ltd. and operated by IGas Energy Plc, the Paris-based company said in a statement.