'Carrot' dangled to fire shale revolution

Local authorities will be able to retain all of the business rates they collect from shale gas sites, under new government proposals to support the development of onshore oil and gas exploration

Currently, councils can keep only 50% of business rates. The government claims that doubling the amount authorities hosting shale gas operations can retain in business rates could be worth up to £1.7 million a year to them per site.

The onshore oil and gas industry has also agreed to re-examine how to share the money it has pledged to give local communities – £100,000 per test well and 1% of revenues if shale gas is extracted, which could be worth up to £10 million over the lifetime of a site.

In a further move to support the industry, whose activities (particularly hydraulic fracturing or “fracking”) have been widely criticised, the communities and local government department has said it intends to take forward proposals to reform the notification requirements for planning applications for underground oil and gas operations.

These will remove the requirement to serve notice on owners of land where underground operations may take place. In its response to the consultation on planning permission for shale gas operations, the department argues that, because extraction takes place over a significant underground area and involves multiple landowners and/or agricultural tenancies, it would be impractical to notify individual owners and tenants.

The Environment Agency has already streamlined the regulation of exploration activity, including developing a single application form for permits, and the government has now announced that the regulator aims to reduce permitting times for low-risk activities from 13 weeks to approximately two weeks.

Meanwhile, Cuadrilla, the first company to explore reserves of shale gas in the UK, has withdrawn applications for permits to frack in Lancashire. The move came after the agency said it would not grant radioactive substances licences until it was sure the wastewater from such activities – which will contain low levels of naturally-occurring radiation – will be disposed of safely. A spokesperson for Cuadrilla confirmed the company was preparing new permit applications with the necessary information.