Swiss-based chemicals multinational INEOS Group Limited has announced it will give 6% of its shale gas revenues to communities, landowners and homeowners in the United Kingdom who live directly above its shale gas operations.
INEOS, which expects to become a major shale gas industry operator, estimates that over the life of its business it will be giving away £2.5 billion ($4.05 billion).
According to INEOS, it is common practice in the United States to share shale gas profits. It believes the gesture will encourage people to support shale gas production in their neighborhoods.
INEOS founder and chairman, Jim Ratcliffe, said:
“We think this is a game changer for Britain. Giving 6% of the revenues to those living above our Shale gas operations will give them a real stake in the success of the venture and encourage the development of the whole Shale gas industry.”
Sharing shale gas income is a game changer, Jim Ratcliffe believes.
As an example, INEOS says that people living in a 100 square-kilometer shale gas community would share about £375 million.
Landowners and homeowners directly above the wells would share about £250 million in a 100 square kilometer shale gas community.
The remaining people in the shale gas community would split £125 million between them, which could be used towards community centers, parks, new schools, and even hospitals.
During a single well’s lifetime, land and home owners would receive more than £1.3 million, while the community would get about £600,000.
Mr. Ratcliffe added:
“Giving 6% of revenues to those directly above Shale gas wells means the rewards are fairly shared by everyone. It’s what they do in the USA and we think it is right to do this here. It democratises the Shale gas revolution.”
INEOS says it is one of the few companies able to use shale gas as both a fuel and a feedstock in its manufacturing facilities. It currently spends hundreds of millions of pounds importing shale gas from the United States to its Grangemouth plant in Scotland.
Mr. Radcliffe believes the UK shale gas industry has the potential to create tens of thousands of direct and indirect new jobs.