Government won't shale out on fracking payments for a while

 
Hayley Kirton
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Application Approved To Frack Existing Gas Site In Ryedale
The proposed fund could be worth up to £1bn in total (Source: Getty)

Government won't have to fork out cash to those living near a shale gas exploration site for some time to come, a consultation document into the matter has revealed.

The Shale Wealth Fund consultation, which was launched today by the Treasury, revealed, because the Fund would be financed using tax revenues from sites developed for gas production, it is likely to not be in full swing until after the first community benefits funding provided by the industry.

This funding won't be paid out until after the first exploration wells are drilled to test the flow of gas.

Although no precise time scale was mooted by the consultation document, shale gas company Cuadrilla has previously said it would take at least five years of exploration before production could begin at large.

The consultation document also proposed pay outs for each community be capped at £10m.

Read more: Will sharing the proceeds of shale turbocharge the dash for gas?

The Shale Wealth Fund, which could be worth up to £1bn, is designed to benefit communities where fracking is due to take place and will pay out over the course of 25 years. Individual households could receive as much as £10,000.

"We are backing the safe development of shale gas because natural gas is absolutely vital to the economy, currently providing around one third of our energy supply," said Jane Ellison, financial secretary to the Treasury. "We’ve made safety and the environment our top priorities but we also want to ensure local people and communities see extra benefit, beyond the jobs and growth that the safe use of shale gas delivers."

Baroness Neville-Rolfe, energy minister, added: "It is right that local communities should benefit from this new industry and that they should have a say in how such money can be put to best use."

Read more: Government advisors warn of "uncertainties" around fracking in the UK

The consultation will run until October.

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