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Fracking: Lincolnshire County Council denies conflict of interest over pension scheme investment in Total

By Lincolnshire Echo  |  Posted: April 28, 2014

By Adrian Curtis

Lincolnshire County Council's offices, in Lincoln

Lincolnshire County Council's offices, in Lincoln

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Lincolnshire County Council has today denied there is any conflict of interest surrounding its £1.9 million investment in a French firm that is spearheading a fracking operation in the county.

The local authority's pension fund last traded shares in the French oil giant Total four years ago.

Total is now committed to ploughing £30 million into two sites in Lincolnshire, raising questions over future planning decisions concerning the energy extraction method.

But David Forbes, assistant director of resources at Lincolnshire County Council, said the pension fund operated independently from planning decisions.

He said: "The pension scheme operates within a set of clear investment principles and is overseen by a pension committee, which makes its decisions wholly independently from the county council.

"Councillors who sit on this committee do not sit on the planning committee, and so have no bearing over planning applications.

"The pension committee has a legal duty to achieve the best rate of return possible on investments. For this reason, the pension fund maintains a wide and varied portfolio, much of which is managed externally by fund managers who seek strong, sustainable companies with good all-round credentials."

The pension fund is currently worth around £1 billion and it has also invested in numerous other oil giants including Shell, BP and Gulf.

Total, which owns Lindsey Oil Refinery in North Killingholme, is the first major oil company to explore for UK shale gas.

The area covered by Total’s shale gas extraction is in the Gainsborough Through, which is a geological basin part of the Pendleian Shale in Lincolnshire.

By contrast, in France, hydraulic fracturing, or fracking, the process by which shale gas is released, is banned.

Chancellor George Osborne has argued that shale has the potential to reduce Britain's reliance on increasing expensive gas imports and create thousands of jobs.

But environmentalists say the fracking process – injecting water, sand and chemicals underground at high pressure into shale rock to release the oil and gas trapped inside – can contaminate groundwater and cause earthquakes.

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