While some people may feel that the shale gas industry, like many other industries, should be nationalised, it remains the case that if it was, the cost of exploration would have to come from taxpayers. Shale gas production requires a significant amount of expenditure ‘up front’ and in some cases, operators may find that it is not worth their while to press on and produce natural gas from shale. Therefore, this provides a risk. At the moment, private companies, not taxpayers, shoulder this risk.
While the shale gas industry is likely to remain in private ownership for the foreseeable future, it is nevertheless the case that the industry has committed to paying £100,000 to the local community living near to each exploratory well site where hydraulic fracturing takes place – whether or not recoverable deposits are found.
In addition, the industry has committed to paying communities 1% of the value of the shale gas that is produced – so communities can receive the benefits of shale gas production but will not be expected to pay up front for exploration costs.