Local communities should be won over to shale gas fracking by rewarding them with more teachers in primary schools and more police officers on the beat, the chief executive of explorer IGas has said.
Andrew Austin said business rates from fracking firms should be spent entirely by local councils.
Andrew Austin said IGas, which produces oil and gas onshore in the UK and is planning to start shale exploration this summer, currently paid about Â£2.1m a year in business rates.
This money should be spent entirely by local councils instead of administered centrally, he said.
Mr Austin also said that planning permission for conventional oil and gas drilling onshore in the UK had become more difficult due to the controversy around shale gas, which is extracted by fracking.
The technique involves blasting water and chemicals into the ground to extract the gas trapped within the rock. It has provoked fierce local opposition amid concerns about its environmental impact, the possibility of earth tremors and disruption caused by the operations.
Ministers want to encourage the development of British shale gas, however, and believe it could provide a significant new source of domestic energy for the UK, helping reduce gas bills.
The Governmnent is already consulting with industry on a series of benefits for communities affected by fracking and are thought to be considering options such as lower energy bills or sports facilities.
Mr Austin, speaking in London at a debate on the future of shale gas in Britain, said that IGas already paid hundreds of thousands of pounds every year into independently-administered community funds which contributed â€œdirectly, parish by parishâ€, to the communities in which it operates.
But he called on government for further reform so that local councils retained the entire take of the business rates paid by fracking firms – going beyond recent changes that enable councils to keep a proportion of business rates revenues.
IGasâ€™s business rates account for 10pc of its Â£21m operating costs. â€œI would be the first to suggest they go directly to local communities,â€ Mr Austin said.
Companies could then â€œgo back to that community and say, as a consequence of shale gas development in this area… there are more bobbies on the beat, more teachers in the local primary school. That makes a difference,â€ he said.
IGas plans to drill two shale gas exploration wells this year and depending on the results may then apply for permission to frack the wells. Until more exploration is done companies do not know whether Britainâ€™s shale gas can be extracted.
â€œIf it doesnâ€™t work the rest of the conversation is entirely academic and we will have expended large amounts of hot air into the process,â€ Mr Austin said.
He said IGas â€œmay wellâ€ need to â€œflareâ€ – or burn off – some waste gas produced in the shale gas extraction process, but said this was a common practice already used in the UK.
Mr Austin also said that the controversy around shale gas had led to a â€œhigher level of scrutinyâ€ of all planning applications including for conventional oil and gas drilling, which has been occurring onshore in the UK for decades. However, IGas was â€œhappy to accept that level of scrutinyâ€ as its operations were safe.
Mr Austin was speaking alongside Lord Smith of Finsbury, chairman of the Environment Agency, who said that planning permission was currently the greatest uncertainty for potential shale gas explorers. Lord Smith said the Government â€œneeds to put some thought intoâ€ whether the current planning system is right.
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