UK shale seeker Cuadrilla has made a start on drilling operations at its Lancashire site in England.
Permission for the scheme to drill up to four wells and frack for shale gas at Preston New Road, Fylde, was turned down by Lancashire County Council, but given the go-ahead last October by Communities Secretary Sajid Javid following an appeal.
The move by the Government was welcomed by business groups but provoked an angry reaction from environmentalists and local campaigners, who said it went against the wishes of residents and threatened the environment.
A spokesman for Cuadilla confirmed the drilling of a pilot well had begun on Thursday.
The energy company has also made a payment of £100,000 to an independent Community Benefit Fund which will distribute the money to community projects to be agreed with the community local to the Preston New Road shale gas exploration site.
This is in line with the UK Onshore Oil and Gas Community Engagement Charter and agreement with the Government and follows on from the commencement of exploration drilling at the Preston New Road site.
Francis Egan, chief executive of Cuadrilla, said: “Today is an important milestone for the energy industry in the UK as well as the community in Lancashire.
“In addition to the jobs created, and the nearly £3million of investment that Lancashire has received to date as a result of our shale gas exploration, the local community will now also directly benefit.
“Following on from this Community Benefit Fund payment a consultation will now start with the community to decide how best to distribute the payment to good causes in the area. We are very proud to be the first British onshore shale gas operator to make this happen.”
Local residents will soon receive a survey carried out by MES (Membership Engagement Services), an independent research, engagement and communications company.
Residents will be asked their views on which types of local community issues or projects the Community Benefit Fund for the first exploration well should be spent.
The Community Benefit Fund will be managed independently of Cuadrilla by the Community Foundation for Lancashire.
At the same time, local residents will also be consulted on whether they wish the funds for the other three wells Cuadrilla has planning consent to drill and hydraulically fracture to be paid into the independent Community Benefit Fund or directly to individual local households via a separate scheme.
Cuadrilla claim that if all three wells are drilled, this would total another £300,000.
When David Cameron was prime minister, he said the UK Government was going “all out for shale” to boost the economy, jobs and energy security – and soon after Theresa May took over as PM, she launched a consultation which could see homeowners receive individual payments for fracking wells drilled nearby.
But the process – in which liquid is pumped deep underground at high pressure to fracture shale rock and release gas – remains highly controversial, with many protesters turning out for the public inquiry into two schemes in Lancashire.
Scotland currently has a moratorium against the practice in place until further research into the consequences is studied.
Opponents of fracking fear it can cause earthquakes, pollute water, lead to damaging development in the countryside and hit house prices, and is not compatible with targets to cut the use of fossil fuels to tackle climate change.