Onshore oil and gas industry welcomes consultation on Shale Wealth Fund

8 August 2016

UKOOG, the trade body for the onshore oil and gas industry, welcomes today's publication of a consultation by Government on the proposed shale gas wealth fund and confirms it will be providing a submission.

Ken Cronin, chief executive of UKOOG, said:

"The onshore oil and gas industry in the UK continues to believe that local people should share in the success of our industry and be rewarded for hosting sites on behalf of others in the country. That is why we launched the industry's community benefits scheme and community engagement charter in 2013. These are additional to the proposed Shale Wealth Fund.

"The overarching objectives of secure, affordable and low carbon energy continue to be a driving force for our industry. Just 12 years ago, Britain was a net exporter of gas, but imports now make up nearly half of our gas demand, at a cost to this country of around £10 million a day. Recent estimates by National Grid are that, without shale, the UK could be importing over 90% of its gas by 2040."


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Notes to editors:

Community Engagement Charter

In June 2013 UKOOG announced an industry community engagement charter which included community benefits. All UKOOG member companies that use high volume hydraulic fracturing will run two Community Benefit Schemes: Exploration (before money is made from gas/oil at the site) and Production (once money is made).

In Exploration £100,000 per site will be paid directly into a Community Fund and the community will decide how to spend it.

In Production, Community Benefits will be made up of a percentage of money made by that site. UKOOG member companies have guaranteed 1% of the site revenue.

Both industry schemes are in addition to the Government's proposed shale gas wealth fund.

Pilot Exploration Sites

UKOOG has already announced that, subject to planning permission being granted, the industry will be piloting an initial exploration community benefits scheme in Yorkshire and in Lancashire. Both schemes will be administered by the local Community Foundation, a part of the national charity UK Community Foundations.

The operator of each site has reached agreement with the Community Foundation who will work alongside those local communities. As part of that process the Foundation will create a community panel and assist them with understanding the community requirements and what the community would like to do. The Community Foundation as part of the scheme will also work with the local operator and the community on defining the extent of the local community; this learning will then be brought forward to the next schemes.

Once site operations have started the money will be distributed to the local community via the Foundation.

UKOOG has investigated other community schemes in similar sectors, including renewables, to find the most successful projects. Early community benefit funds are often used to fund short term projects in the community such as village halls, playgrounds or local transport for the elderly. But later, larger projects are chosen which aim to increase the long term legacy of these community benefit funds.

These include a fuel poverty fund, an energy and advice centre, recycling facilities, bike tracks, habitat enhancement schemes, a local energy discount scheme and community based renewable energy projects.

About UKOOG:

UKOOG is the representative body for the UK onshore oil and gas industry, including exploration, production and storage. The organisation's objectives are to enhance the profile of the onshore industry, promote better and more open dialogue with key stakeholders, deliver industry wide initiatives and programmes and to ensure standards in safety, the environment and operations are maintained to the highest possible level. Membership is open to all companies active in the onshore industry including those involved in the supply chain. www.ukoog.org.uk